Reports: Netflix

Social media has steadily integrated music, and music creation tools have steadily become more social. These trends are converging, accelerated by shifts in consumer behaviour and artificial intelligence (AI). The result could be a new set of music creation and re-creation tools, integrated within social platforms and geared towards casual consumers.

This report deep dives into the themes identified in MIDiA’s 2023 predictions report. These themes will drive innovation in the digital entertainment landscape in 2023 across music, video, games, audio, cultural trends, and the creator economy. Expect 2023 to be a of period significant disruption and innovation forced upon the digital entertainment industry, as nearly two decades of uninterrupted growth makes way for consumer-led disruption that is driven by a reduction in discretionary spending, attention, and willingness to make do with tired old formats.

Podcasts are breaking out of traditional audio and entering the video space, as nearly a quarter of consumers now watch podcast videos monthly. Visual elements for podcasts are becoming a crucial tool to reach new audiences and engage current listeners.

Group watching television with family and friends is being consigned to a bygone era. Algorithms are forcing entertainment consumers into silos through an endless stream of personally recommended content and the fallout is a relentless battle for audience engagement across a myriad of devices.

Coronavirus pandemic work patterns are now ingrained in the United States, where 42% of consumers work from home and a fifth are hybrid workers. In the ‘new normal’, home workers spend less time on both digital and in-person entertainment compared to those who commute.

Audience engagement with subscription video on demand (SVOD) services is sliding, with multi-tasking on social media often relegating shows to background viewing. Social media is the threat, but also the catalyst for a radical recalibration of the SVOD viewing experience that will help these services claw back what is lost.

The history of social media has long been defined by continual evolution and iteration, but now shifts across the value chain are becoming more substantive, heralding a new era. Social platforms themselves are changing, and so too are the attitudes, expectations, and behaviours of their users, with audiences’ appetites for carefully curated, heavily edited posts turning sour, and their thirst for authentic, participatory content growing stronger.

In this report, MIDiA Research analysts present their predictions for what will be the big trends in digital media and tech across music, video, games, marketing, audio and cultural trends in 2023 and beyond. Themes for 2023: Cost-of-living crunch: Entertainment spending will weaken, but some formats will fare better than others Perceived value will be king: As economic conditions worsen, consumers will seek out better value for money, not just ways to reduce spend The end of disruption: Following two decades of disruption, consumer tech is entering a ‘holding’ phase, accentuated by the economic downturn Scarcity revival: The post-lockdown thirst for ‘in real life’ (IRL) experiences will combine with digital fatigue to place a new premium on scarce, IRL experiences in 2023 Community repurposed: The value of community will come to the fore in 2023, as entertainment increasingly becomes scene-led The rise of the moment: The immediacy of ‘now’ will find its fullest expression in social and music fusion in 2023 The forking of culture: Cultural intermediaries will provide access to subscenes for larger audiences The authenticity crisis: In an era of replication, authenticity will stand out The decoupling of global distribution: A changing geo-political landscape is turning back the clock on a vision for global markets in entertainment.

Audiences are becoming ever-more creative and this proclivity will come into its own over the coming period of economic, social, and political turbulence. To reconnect with each other while conserving their financial resources, these audiences will increasingly employ their digital-savvy pandemic learnings in the way that they consume entertainment itself.

DSPs have long been able to grow their subscriber bases despite all offering essentially the same experience. Yet the freemium model is reaching a saturation point, putting slow but steady pressure on DSPs to find new ways to grow subscribers and revenue.

Investments from major audience platforms in audio infrastructure, such as hosting platforms and advertising, kickstarted the growth of the podcast market. With the basic infrastructure now in place, it is time for the major platforms to focus on growing the format by expanding listenership and user experience.

Streaming TV is now the default way to consume TV content. However, the streaming TV era is now the friction TV era, due to the fragmented nature of the direct-to-consumer (D2C) siloed, competing brands. Consumers require multiple services with different user experiences to engage in the full range of TV content previously available in one ecosystem.

The Covid-19 entertainment boom is over; we are now in a highly competitive attention recession characterised largely by the attention inflation driven from accelerating rates of multitasking. This is compounded by serious global events and a cost-of-living crisis which will reduce the money audiences have available to spend on digital entertainment.

The world is facing a period of change and disruption that is unprecedented in modern times. With so many interconnected dynamics across consumer spending, economic cycles, the climate, and even geo-politics, consumer behaviours and spending will undoubtedly be impacted.

Entertainment hours are up, but consumption is becoming diluted and losing focus, and is increasingly in the background of other activities. Audiences want to consume more but have no more time to allocate; increased multitasking is the result. Consequently, attention / focus is split between more propositions.

Entertainment consumption is increasingly shaped by context, as consumers are driven by attention saturation to overlap behaviours as well as choose between them. Different forms of entertainment are better suited to different contexts, with some lending themselves to more social behaviours than others.

The combined effects of market saturation for subscription video on demand (SVOD) alongside a growing cost-of-living crisis are forcing pureplay SVOD services to modify their ad-free propositions. Disney-owned Hulu has demonstrated the viability of an ad-supported SVOD basic plan, which now offers a blueprint for Disney+ and Netflix.

Streaming first democratised the means of consumption, then distribution, and now production. Though the promise of the long tail may not have materialised quite as expected, long-tail and mid-tail creators are now a central component of the digital-entertainment economy.

With the attention recession in full swing following the lockdown boom, video isalready feeling the pinch as evidenced by Netflix’s declining subscriber count.The mainstreaming of subscription video on demand (SVOD) pulled TV into the digital entertainment sphere, placing it at risk of further disruption from the attentionrecession.

Music rightsholders are keen to leverage artist IP in an increasingly competitive direct-to-consumer video landscape, where appealing to silver streamers is a strategic play to minimise churn in an era of peak video subscriptions. The monetisable emerging long tail of video streaming, combined with the transformation of music IP into a content asset, has created the opportunity for the leveraging non-music IP for video audiences to build a new revenue stream that is free from the pre-digital constraints of the music industry.