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The State of Media and Entertainment
Read on to discover:
- The current state of the media & entertainment industry
- How today’s consumers are evaluating their media spending
- Tools for media brands to maintain their real-time consumer data
Imagine that it’s 1999, you are eight years old and looking forward to a movie and pizza night with your best friend. You convince your parents to take you to Blockbuster so that you can rent “10 Things I Hate About You” and buy some jolly rancher lollipops with a liter of Sprite.
As you browse the bright yellow walls of the “new release” section with Blockbuster card in hand, your eyes lock onto the last VHS copy of the new Heath Ledger flick. You casually lift your hand to grab the tape, but another shopper swoops it up before you can think. You resign yourself to renting “Notting Hill” instead and pick up some extra buttery popcorn to blunt the blow.
There were roughly six thousand Blockbuster video rental stores nationwide in 1999, an impressive feat for any retail company. However, as the next decade went by, Blockbuster failed to adapt to their customers’ changing needs and preferences, a task that Reed Hastings delivered on with his new company, Netflix. With Netflix, Hastings abolished late fees, sent DVDs directly to customer’s homes, and charged a flat monthly fee. In 2021, we know how things worked out for Blockbuster. The video store giant is now down to one location in Bend, OR, that attracts thousands of nostalgic tourists every year while Netflix not only streams movies and shows they also create them for their 207 million viewers.
The Media and Entertainment industry is continually evolving, becoming faster, more accessible, more customized, and more addicting than ever before. The movie night of 1999 is now streaming the latest Netflix original movie at home with no need for a video player. In 2021, everyone with a subscription has access to movies and shows for as long as they remain subscribed. This transformation of consumption patterns happened in just a few decades. The question now is, what’s next?
Changing Consumer Behavior
Early on, one of the most noticeable benefits of streaming content on platforms like Netflix or Hulu was that it eliminated the need for cable TV. A cable TV subscription could cost hundreds of dollars per month with forced yearly contracts, you were limited to the channels they offered, and you had to suffer through all those pesky advertisements. With streaming, you paid less than $10 per month with no contract, had more choices, and didn’t have to deal with any annoying ads, on Netflix at least. However, this honeymoon period couldn’t stick around forever, and as customers across the nation “cut the cord,” media companies took note, each branching out into their own entertainment platform.
As of July 2021, there are 200 streaming services and counting. Netflix, Amazon Prime Video, Disney+, Funimation, Hulu, HBO Max, and Peacock are among the most popular, offering a unique mix of original and licensed content. With so many choices, how can customers possibly choose where to spend their money? As it turns out, most consumers like variety. According to Forbes, “The average American subscriber watches 3.4 services. For each one, they pay an average $8.53 per month.”
Although there are hundreds of streaming platforms to choose from, Americans still love going to the movies, a love that suffered greatly as the COVID-19 pandemic shut down theaters across the country. In 2020, with production companies like Disney unable to release films like Mulan to theaters, they decided to bring the theater into the home, charging Disney+ subscribers $30 on top of their subscription fee for access to the new movie. This gamble paid off, with Disney netting a total of $35.5 million on Mulan’s opening weekend from Disney+ subscribers.
The Decision Matrix
When evaluating their entertainment choices, today’s customers are forced to navigate a decision matrix that balances provider, content, device, and price. For example, perhaps there is a new movie out that your friend is raving about, and you want to check it out. How do you find the film? What makes you decide to watch it or not? This is an overview of what the decision process might look like.
Your friend wants you to watch a new movie that is already getting Oscar buzz. You have some time, so you hop on your Roku and search for it. You watch the trailer and decide that it looks like something you’d enjoy.
The film you are searching for is available on Amazon Prime and HBO Max. You’ll have to see if it’s free or not to decide.
You click on Amazon Prime and discover that it is $5.99 to rent the movie for 48 hours. You exit Prime and head on over to HBO Max to see what they are charging.
You discover that the movie is free on that platform, but you are not a subscriber yet, so you cannot access it. A subscription to HBO Max is $14.99. You already belong to a few other streaming services, so the $5.99 price seems like the better deal. Or is it? HBO Max has other movies you really want to see. Maybe you should ditch Netflix?
You think about how HBO Max just launched on Roku, which makes it more appealing because you couldn’t even download it just months ago. You decide to try it out for a month with their free trial. You can always cancel later, right?
The above matrix is a common dilemma in households across America as streaming expands and adapts to the twists and turns of a global pandemic, consumer demand, and inflation, among other factors.
What Are Fuel Cycle Brands Doing?
Pre-COVID, most entertainment brands were tracking consumer behavior on some level. However, the pandemic highlighted the need for continuous customer tracking as what viewers were watching and how they were watching changed almost weekly. Brands had to determine if their customers wanted pandemic-themed movies one week or romantic comedies the next, with precision and accuracy to stay above the fray.
Even as the pandemic winds down, the need for real-time data isn’t gone, it’s heightened as we all try to determine what post-pandemic life will look like. The Media and Entertainment Industry needs to scale its research and aggregate a consistent stream of customer feedback into an actionable decision-making process. This is accomplished through online communities, panels, and custom research solutions catered to fit the needs of the Media and Entertainment industry.
Learn more about the state of entertainment and media with our webinar, “Predicting the Future of Media”.