In 2019, experience trumps product. Retail outlets are retooling their spaces to make the experience of shopping, the so-called ‘retail journey’, as attractive to the consumer as the items they hold in their arms as they leave the shop. Many media companies are attempting to emulate Time Out’s food market success and transition into events and experience businesses, the better to appeal to the Millennials and cash-rich Boomers who prioritise making memories.
A lot of that is driven by the rise of consumer technology that enables brand new experiences, from portable 3D printers that let you take away a physical model of your own face at the end, to venues dedicated entirely to esports, to the ever more interactive experiences offered by theme parks. Many savvy media companies and retailers
Global esports revenues are expected to hit $1.1bn this year. Over $155 million in prize money was awarded in nearly 3,500 esports tournaments last year, playing games like Dota 2, League of Legends and Counter-Strike: Global Offense. $11.47m of this prize money went to just one team: OG, a European professional team which is famed for playing Valve’s Dota 2. With teams like Team Liquid racking up overall earnings of over $26m, and global esports viewers projected to total 453.8m this year (representing a year on year growth of +15%), competitive gaming is becoming a money-making phenomenon for both players and investors. So where is the money coming from, who is investing and what’s in it for them?
Esports is still in its infancy, comparatively, so the medium represents a new, current and exciting opportunity for traditional investors, looking for growing areas, to maximise return on
In the UK, visits to museums are decreasing year on year across all categories, including a 6.9% decrease in educational visits and on-site activities for under-18s. Meanwhile, technology and the internet are playing a rapidly increasing role in our lives. A superficial reading of this would suggest
What would you spend to win an Oscar?
This year’s list of Oscar nominations for best film is notable for a number of reasons – but primarily for the inclusion of two new entrants to the category: Marvel Studios for Black Panther, and Netflix for Roma. But the two illustrate very different business models.
Black Panther – nominated for seven Oscars – cost an estimated $200m to make, and has taken $1.3bn so far at the box office. That’s an earnings ratio of 6.5x (excluding marketing and distribution costs). This is good, even by Marvel’s money-making standards: the previous five Marvel films had average budgets of $250m, and takings of $925m (3.7x budget).
Roma cost $15m and took, er, $217,000 in a limited cinema release, an earnings ratio of 0.014x production costs – or, more straightforwardly, a loss of $14.8m. It is estimated that Netflix has spent an additional $25m on promoting the film ensure an Oscar or two. Clearly, Netflix has a different ambition in mind rather than profit: it wants to be taken seriously as a filmmaker, and it wants
Broadcast is changing fast – but not necessarily in ways we might have expected a couple of years ago. Here are three trends to watch for in 2019.
VOD apes traditional media
Streaming services are working hard to steal eyeballs from traditional broadcasters – and they certainly seem to be succeeding. Netflix obliterated analysts’ expectations by adding 7 million new subscribers during the third quarter of 2018. And it is willing to spend some serious money to continue that trajectory.
It is no secret by now that the reason Netflix, Hulu, etc. are investing so heavily in original content is that the studios are looking to withdraw their proprietary content from these platforms in order to launch their own services (eg ‘Disneyflix’). Netflix have indicated that they are allocating 85% of their new spending on original productions, according to Variety.
They will also be looking to capture the heart-of-the-nation market from linear broadcasters – think ‘Great British Bake Off’ or ‘The Bodyguard’ (the latter of which they own the international rights to). There has certainly
The most recent statistics from the Entertainment Retailer’s Association reveal that the UK video games industry outperforms the music and video industries by a significant margin. Combined physical and digital sales of games reached £3.86bn for the year, a significant improvement on last year, where physical and digital sales for music and video achieved £1.33bn and £2.34bn respectively. That effectively means that games are responsible for over half of all UK home entertainment sales for 2018, a testament to the increasing numbers of the public who have grown up with games as a medium.
Monetisation opportunities around games have similarly increased as technology has enabled more ways for consumers to support game developers and publishers. Where once one-off purchases were the only way to support a game, the rise of free-to-play (F2P) games and paid-for downloadable content (DLC) have paved the way for many other models. Despite publishers being ever-more hungry for sources of incidental revenue from their titles, one potential form of revenue – in-game advertising – has never really taken off in the West. But that could be about to change.
China’s games industry is experiencing its slowest growth in at least a decade and a half, despite evidence that the country’s gamers are spending more of their time playing games (see graph below). The world’s largest games market, worth some $32.5bn a year, is in the midst of a huge shake-up. Beijing has sought to limit the industry, alluding to growing concerns
For some time now, commentators have been noting the wave of change finally brought around regarding female representation in the creative industries, including us in our blog on #metoo. On our screens, this has been playing out with the notable increase in women in prominent roles: Claudia Winkleman and Tess Daly made the first prime time female presenting duo in 2014, and this year Jodie Whittaker became our first female Doctor Who.
This change is starting to be seen behind the scenes as well. Of 201 men who have lost their jobs following accusations of sexual harassment in the past year, 43% of those who have been replaced have been replaced by women. The NYT has put together a handy list. But has enough been done? How far do we still have to go?
Well, only 36% of jobs in the creative sector are currently filled by women. At a senior level women are even less represented, making up only 11% of Creative Directors or equivalent across the sector. In TV, only 17% of output in a recent survey was helmed by female directors. This
According to the headlines (and backed up by recent studies) millennials are killing industries: the divorce industry, the diamond industry, and the oil industry, to name a few. For young consumers, it is appears that ethics trumps other concerns when looking for brands to support. This impacts where they invest, what they watch and where they work, with 14% of millennials saying they would not want to work in the oil and gas industry, the highest of any sector.
Nike’s Colin Kaepernick campaign saw a 3% dip in its share price, which would initially appear to be a red flag for the brand. However, a closer look reveals
On Sunday 18th March 2018 a 49 year old woman in Arizona was killed by an autonomous Uber car, which struck her as she pushed her bicycle along the roadside. The death was blamed on defective software. Two years prior to this, the first of multiple Tesla driver deaths occurred. There is significant evidence
The entrepreneurs behind the imaginatively-named NewTV, Jeffrey Katzenberg and Meg Whitman, will be feeling encouraged by their recent round of investment having closed at $1bn. The service promises entertainment providers an avenue onto the world’s billions of smartphones, being specifically designed for mobile use with short-form series of 10-minute episodes. And it seems they have Hollywood and Wall Street convinced, according to Variety:
“Backers include a who’s who of Hollywood studios: Disney, 21st Century Fox, NBCUniversal, Sony Pictures Entertainment, Viacom, AT&T’s WarnerMedia (formerly Time Warner Inc.), Lionsgate, MGM, ITV and Entertainment One. Tech investors include Chinese internet giant Alibaba Group; strategic investors include VC firm Madrone Capital Partners, which led the round, along with Goldman Sachs, JPMorgan Chase & Co. and John Malone’s Liberty Global. The funding officially closed July 31.”
Encouraging, sure. But will it really be enough for to penetrate an already saturated market where similar offerings have since failed? Securing $1 billion from such famous brands is no mean feat but
If you’re not a fan of Drake… well, bad luck, because you can’t get away from him. In an overly-zealous attempt to promote his new album, Scorpion, Spotify chose to include Drake in every single one of its discover playlists over the launch period. This sparked a backlash from music fans, the likes of which haven’t been seen since iTunes snuck a copy of U2’s Songs of Innocence into its users libraries, with Spotify users demanding refunds for the sudden omnipresence of Drake in their lives.
As the BBC pointed out, Spotify’s promotion of Scorpion was undeniably over-egged, with songs from the Canadian-born musician appearing on playlists titled ‘Best of British’ and every genre known to man. As a result some subscribers to the paid-for Spotify Premium, which boasts a lack of ads as a feature, considered that they were being served advertisements for a single artist with the relentlessness of the T-1000.
While the controversy is perhaps overblown – unlike the Songs of Innocence debacle, which necessitated bespoke software to be developed to remove the album from users’ libraries – it actually reveals quite a lot about Spotify’s business model and, in turn, the business models of the artists whose oeuvre appears on the platform.
The outgoing President of the CBI has caused a small storm by saying that parts of British industry could become “extinct” unless a proper Brexit deal – including membership of the customs union, the CBI’s preferred approach – is negotiated.
This has attracted the usual binary comments in the media: the ‘we told you so’ from the Remain camp, and the tedious charges of treason from Leave supporters.
But Paul Drechsler’s interview was actually quite nuanced. There was very little that people of either viewpoint could disagree with: he contended that the debates had been ruled by politics rather than economics; that the uncertainty in government was having a knock-on effect to business, making it difficult to make investment decisions; and that the UK’s economy is growing slower than most of its competitors as a result.
These are pretty much incontestable observations. Growth in the British economy is
Every year, the Electronic Entertainment Expo (E3) churns out enough news, analysis and memes to keep the content-hungry gaming press happy for at least the next quarter. 2018’s conference was no different, with strong showings for games like Cyberpunk 2077, Devil May Cry V, Super Smash Bros. Ultimate and tons more.
But underpinning all those flashy reveal trailers and lengthy gameplay demos are some trends that demonstrate where game devs and publishers believe the future of the industry lies. Not just in the genres they think are going to be popular, but in where the money to support multi-million dollar game development is likely to come. Here are a few of those trends:
With PlayStation and Nintendo holding most of the cards when it comes to popular video game exclusives, people have not only been questioning the worth of owning an Xbox, but whether there was any point in Microsoft making another one. So, all eyes were on Microsoft’s E3 conference last night. Some considered it a do or die
By now we’ve all breathed a sigh of relief at the recent news that movie mogul and serial molester, Harvey Weinstein, has been arrested… and recovered from the disappointment of learning he was promptly released on a bail charge. We’ll also have heard about Benjamin Brafman’s legal defence: his client, he insists, ‘didn’t invent the casting couch.’ Hardly a perceptive observation. The concept of the casting couch is as old as Hollywood itself. But every industry is implicated in this post-Weinstein reckoning, as the viral hashtags #Timesup and #MeToo have demonstrated. We simply cannot
Everyone knows by now that the broadcast business model has been fundamentally altered by the rise of digital streaming. Digital ad-spend has overtaken TV ad-spend in the US and UK, and by many accounts US television ad-spend is in a state of permanent recession (it is expected to bounce back slightly in the UK).
More than that, though, over-the-top (OTT) services have disassembled the bundles upon which lucrative television deals were built. Sports content, for instance, was once the foundation upon which most cable and satellite bundles were built, in what Stratechery’s Ben Thompson called last year as “the last pillar to crumble” in the traditional pay-TV model.
But OTT services, and people’s expectations about on-demand media, have finally reached that pillar: Among all the many skinny bundles that don’t include sports, there are individual subscription services like the WWE Network, and even efforts to create the ‘Netflix for sports’. The Guardian reports:
We have long argued that the games industry should be treated as seriously as those other pillars of the entertainment business, film and music. Government seems to be getting the message, and – as we reported last month – the figures certainly stack up.
But perhaps the BBC is still struggling with the idea of games as a grown-up industry in its own right. When the industry does get coverage (on the Today show, for example), the presenters are typically as well informed as, say, a US senator facing a Facebook Chief Executive.
And then there was last week’s broadcast of the BAFTA Games Awards ceremony. If there is one thing
Last week it was reported that Rupert Murdoch, as part of his attempt to buy 100% of Sky, may attempt to sell Sky News to Disney in order to keep regulators happy. It has subsequently emerged that Disney may have to bid for the entirety of Sky if the Competition and Markets Authority quashes Murdoch’s bid. While the debate in this country has focused predominantly on Murdoch’s endgame, relatively little attention has been paid to what Disney would be looking to gain here.
Disney’s ambitions highlight several trends within the wider TV sector; they appear to be realising the hitherto missed tricks of traditional broadcasters when staving off the ‘threat’ of SVOD providers such as Netflix and Amazon. And they have plenty of reason to do so.
During the first quarter of this year, FierceCable reported, “Disney’s media networks operating income fell 12% to $1.2 billion due to sagging performance by Hulu [reported as equity], A+E and the broadcasting segment.” Pay-TV has generally found itself lagging behind
Modern media, to some extent, is just a series of stunts and marketing materials.
News publishers have to compete with digital outlets who, by nature of the race to scale, sell their content with hyperbole and screaming rhetoric of the sort we used to call ‘clickbait’. Even BuzzFeed, whose news wing is consistently breaking some of the biggest stories of any given week, used to indulge in this.
Consequently even the legacy publishers find themselves dragged further towards that hysterical drive to be noticed. Take The Atlantic, the US-based publication whose work and business model other publishers look upon with envy. Last month, it appointed the arch-conservative columnist Kevin Williamson, as a stunt intended to broaden its appeal, though it was dressed up as an attempt to provide balanced coverage. Unsurprisingly,
Earlier this year The Stage reported on an arts council report which stated “BAME and disabled staff still ‘significantly underrepresented’ in theatre.” In 2016 The Guardian reported on another arts council report with the headline ‘Number of BAME arts workers must improve.’
So why is this still a problem?
Theatre has a history of pushing boundaries and opening doors. Broadway’s hit musical Hamilton casts black, rapping performers into the role of one of America’s founding fathers, the white Alexander Hamilton. Graeae Theatre Company champion the inclusion
In a recent blog, we looked at the threat Brexit represents to the future of the UK creative industries, focusing mainly on the games industry – and for a very good reason: the UK games retail market is now a £3.35bn industry, its sales now almost equal to that of home sales for music and video combined.
But this blog perhaps missed the wider, refreshingly positive story about the state of the entertainment market as a whole. For many years, reports have suggested
Last week, it was reported that there are more unfilled job vacancies than ever before in the British economy. As of November 2017, there were 810,000 unfilled vacancies in the UK – an increase of 60,000 on the previous year.
For all employers, that deserves a moment of reflection. But for employers of highly skilled workers, such as programmers, the current situation threatens to become a crisis as uncertainty over the direction of Brexit creeps in.
The challenge of attracting talent to the UK is underlined by the latest Global Talent Competitiveness Index (GTCI), which shows the UK has dropped from 3rd place in 2017, to 8th place this year. The rumours and uncertainty surrounding our future relationship with the European union are evidently making the UK a less attractive place to work.
Viagogo’s decision this week to snub the culture committee’s hearing into secondary ticketing was misguided and likely to imperil efforts at self-regulation.
The secondary ticketing market, which includes online marketplace sites like Viagogo and GetMeIn!, is worth an estimated $8bn a year.
While useful to genuine fans, these sites also make it very easy for touts to sell tickets at hugely inflated prices – and that, in part, is one of reasons why the committee was keen to take a look at the industry.
In my last blog on gaming consoles, I asked whether anyone would be brave enough to launch a new Nintendo magazine in light of the projected success of the Nintendo Switch console. Well, it turns out they have been…
Just days after I wrote that piece, SwitchPlayer magazine received a limited release after funds were raise for its launch through crowdsourcing platform Patreon.
Since the release of its Game and Watch in 1980, Nintendo has dominated the handheld console market. The Game Boy and Nintendo DS are remembered fondly by people who played them in their youth while latest Nintendo 3DS had sold around 60m units by June 2016.
What’s more, a national survey in the 1990s found that Nintendo’s character, Mario, was ‘more recognizable to American children than Mickey Mouse’.
When it comes to home consoles, however, it’s a different story.
The media industry is still too white.
Back in 2001, Greg Dyke said that the BBC was ‘hideously white’ . That was fifteen years ago and was indicative of our industry at that time.
The issue of race and gender diversity in the workplace is not a new one, yet it is still one that needs to be discussed because little is changing and it’s not changing quickly enough.
Earlier this year, the overall value of the UK games market ‘soared’ past £4.1bn for the first time – so we are overdue a look at how publishers and developers achieve growth in the face of a prosperous secondary games market.
For the uninitiated, the secondary market covers the resale of second-hand games and trade-in (often for store credit). Retailers including Amazon, GAME, and HMV re-sell and, historically, this has been considered to the detriment of developers and publishers.