Lederer and Brownlo ‘s article titled A World of Differences looks at the ever-changing role of Entertainment and Media Companies (E&M) where as the market continues to evolve, E&M Companies are now battling issues of declining price power, disinflation, and the trend toward free media that is proving to be challenging for the media market. Despite economic growth being stable for the past year, the $1.7 trillion business is unlikely to continue to hold its ground through to 2020, yet this dynamic, diverse industry is ensuring countries flourish with in this landscape that is “multi-shifitng” today where E&M spending is growing more rapidly than GDP.
The article begins to dissect the revenue across E&M that is steadily shifting from publishing business to video and Internet business. The figures show direct consumer spending models remain strong whilst spending on Internet access, including mobile data rivals advertising. These transitions that come under the bracket of powerful macroeconomic, technological, and social trends intend to produce “counterintuitive shifts” with the biggest of these shifts occurring in five dimensions of the global E&M landscape.
(i) Demography – the study of statistics such as births, deaths, income, or the incidence of disease, which illustrate the changing structure of human populations. Younger consumers adopt new consumption behaviours and their startling ability to multitask in different media. These same attributes allow them to lead the way in setting trends and driving consumption in E&M markets around the world.
(ii) Competition – The reinvigoration of a mantra from the 1990s “content is king,” in an important yet widely overlooked shift, the duo believe that content will reign supreme as platforms seek to differentiate and expand internationally.
(iii) Consumption – The rise of subscription content streaming services has been a major feature of E&M companies with Netflix and other OTT’s growing by 33.8% in 2014. The rapid growth in on-demand streaming revenues is starting from a very low base, and even today on- demand streaming accounts for little more than 2 per- cent of global consumer E&M revenue.
(iv) Geography – The result was that a company might have one strategy for developed markets, and another, some- what generic strategy for developing markets. But the dynamics are shifting rapidly. In 2017, for example, when China overtakes the U.S. in box office revenue, it will mark the first time the U.S. has not held the leading position in an E&M segment. In addition to understanding the where and how of growth by country, companies must grasp the im- portance of a third factor: regulation. In China, companies may face significant obstacles due to regulation. Yet China remains one of the most robust markets for E&M growth in terms of absolute dollars.
(v) Business models – In many areas, the growth of technology and digitisation acts as a powerful centrifugal force — breaking up existing relation- ships; pushing large, generalist entities to give way to smaller specialists; and allowing smaller, nimble competitors to beat out incumbents. But the reality is that the historic shifts now under way are forging the creation of new business models, and perhaps even new industries.