Movies and Entertainment Market Report 2024 (Global Edition)

Factors Affecting the growth of the Movies and Entertainment market

The rise in the number of streaming services is boosting the growth of the movies and entertainment market.

In recent years, the entertainment landscape has undergone a significant transformation with the rise of streaming platforms. During the COVID-19 lockdown, theatres and all entertainment mediums were closed compelling people across the world to stay at home for their entertainment which became the reason for the emergence of new streaming video services. such as Disney+, Universal, and Warner Bros. joining with Netflix and Amazon. Traditional television and film distribution models have been disrupted, making way for a new era of on-demand content consumption. The convenience and accessibility offered by streaming platforms have significantly influenced consumer behaviour. With access to streaming platforms, viewers are no longer bound by fixed schedules and limited choices as it was with traditional broadcast networks. 

Consumers are now having the freedom to create their own entertainment experiences because of a wide range of content access at their fingertips. Binge-watching entire seasons of shows has become a cultural phenomenon, enabling viewers to immerse themselves fully in their favourite stories. One of the driving forces behind the success and preference of streaming platforms is their investment in original content. With a desire to outcast themselves and pool subscribers, platforms like Netflix, Amazon Prime Video and Disney+ have been investing resources into producing high-quality original series and films. This shift has given rise to a golden age of content creation offering unique storytelling opportunities and giving a platform to diverse voices. Streaming services have been able to explore controversial topics, and portray complex characters because of fewer restrictions and regulations compared to traditional broadcast networks. For instance, Netflix is now leading in the video streaming service with nearly 260.28 million subscribers which showed a significant increase of 5.3% from 2023 and nearly 13% growth year over year.

Streaming platforms have also played a significant role in breaking up the boundaries in terms of content and challenging societal norms. Also, these platforms have made entertainment more accessible and convenient for people with affordable subscription plans and the availability of content on multiple devices. For instance, in 2021, the United States was the largest filmed entertainment market worldwide, with a revenue of almost 24 billion U.S. dollars. The reason is the video streaming market which is currently dominated by Netflix, with a wide range of original content and a large subscriber base. Also, the Over-the-top (OTT) video revenue was reported to reach 154 billion U.S. dollars, with the United States accounting for the largest share of revenue worldwide. 

Furthermore, it is clear streaming services have achieved a strong presence in American homes, as nearly 99% of U.S. households hold subscriptions to at least one or more streaming services, with Netflix, Amazon Prime Video, and Apple TV+ topping the charts. 
(Source: https://www.forbes.com/home-improvement/internet/streaming-stats/) 

Also, 54% of US internet users subscribe to four or more over-the-top (OTT) video services, while 20% subscribe to 8 or more services. (Source: https://tinuiti.com/blog/ott-ads/streaming-video-statistics/) 

Overall, 1.1 billion subscriptions to online video streaming services worldwide. As of 2023, that figure is closer to 1.8 billion. User penetration sits at around 17% in 2023. By 2027, the figure is expected to reach 20.7%. In 2024, brands spent $30.10 billion on streaming advertisements, compared to $60.56 billion on traditional TV ads.
(Source: https://explodingtopics.com/blog/video-streaming-stats)

The continuous rise in the cost of production and the rising competition in the industry putting pressure on profitability.

The cost of producing and marketing movies and TV shows has been continuously increasing, putting pressure on profitability. Changing consumer preferences and rising competition demands continuous innovation and creativity in the film and entertainment area. The changing preferences compel companies and service providers to bring out innovation like using new technologies and animation factor in latest movies which is increasing the cost of production in the overall market. 

Competition on the side, has always been a major factor that affects the number and composition of product offerings irrespective of industry and the film industry battles intense competition from other entertainment forms, including video games, social media, and sports. The gaming industry has broken all the parameters of providing an exclusive entertaining platform to experience virtual reality concept-based gaming however, the increasing competition is becoming a barrier for companies.

The film industry is a massive company, with global box office revenue hitting a record $42.5 billion in 2019. However, this large amount does not imply that all films made are profitable; some end up losing money. Furthermore, the average cost of creating a big studio film has been approximately $65 million, excluding distribution and marketing expenditures, which, if added, will boost the overall costs by $35 million, bringing the entire cost of producing and promoting a movie to average $100 million. Movie costs can normally be broken down into some broad categories, including script and development, licensing, and salaries of the big-name players, which usually include the producer, the director, and the big-name actors or actresses however, the actual production cost also includes the ongoing salaries of all the people required to make the production happen, hence it can be said that the production costs consume nearly 25% of total movie budget.
(Source: https://www.investopedia.com/financial-edge/0611/why-movies-cost-so-much-to-make.aspx#:~:text=The%20average%20cost%20to%20produce,to%20right%20about%20%24100%20million) 

The expansion of the streaming services along with the 5G network can bring a new ray of opportunities to transform the movie and entertainment experience.

5G technology, a new global wireless standard after 1G, 2G, 3G, and 4G networks. It enables a new kind of network that is designed to connect virtually everyone and everything together including machines, objects, and devices. The emergence of 5G technology has brought about significant advancements in various industries including movies and entertainment. The speed, low latency, and high capacity of 5G networks are set to revolutionize the way people consume and create entertainment content.

The capacity to support high-quality streaming and downloading of large files, including video and audio is one of the most appealing and significant benefits of the 5G technology in the entertainment industry which means that users can freely enjoy seamless streaming of their favourite TV shows and movies without buffering while downloading content at lightning-fast speeds on the other side. This higher capacity of 5G networks will enable more people to access streaming services simultaneously without experiencing any lag or latency issues. For instance, 75% of survey respondents say that video streaming quality is important to them, while 68% of respondents said they would switch to a better provider for a higher-quality experience.

Furthermore, 5G technology is also transforming the craze in the gaming industry, enabling faster and more immersive experiences. Online gaming requires low latency and high bandwidth which is very much possible with 5G networks. Now, gamers can expect faster response times and improved graphics, making gaming more realistic and enjoyable. This can lead the movie and entertainment industry to a different level of era. For instance, During the year 2022, almost 45% of all the U.S. mobile connections have adopted the 5G networks of its benefits and exposure.

Another combination of cloud computing and 5G bridges the gap between broadcast and broadband. This combination holds huge promise for the delivery of real-time data and live streaming via OTT networks. With live sports traditionally being a stronghold of TC broadcasters, 5G will enable OTT platforms to draw in more viewers and get a bigger slice of the pie. Also, 5G can empower virtual reality and augmented reality applications in streaming. Many such applications are currently limited by the processing power of 4G which often results in glitchy and slow-to-load experiences. With the advancement in 5G networks, viewers will be able to have seamless immersive experiences within their favourite shows and movies using VR and AR and this is one of the main reasons consumers started preferring 5G networks. For instance, 29% of consumers would pay a premium if 5G provided “better quality video” on mobile devices and “decreased buffering while streaming video.
(Source: https://intive.com/insights/how-5g-will-change-the-ott-game) 

How did COVID–19 Impact the Movies and Entertainment Market?

Like every other sector, the COVID-19 pandemic also harmed the movies and entertainment market. Because of the lockdown, almost all the cinemas and theatres were closed and numerous film releases were postponed or canceled which had a direct impact on the industry. The global box office dropped by billions of dollars. As per records, the Chinese film industry lost around US $ 2 billion by March 2020 because of the shutting of theatres and the cancelation of upcoming big-budget movies. For instance, Consumer spending on movie tickets across the U.S. declined by nearly 80% between 2019 and 2020.

During the lockdown phase in 2020, the global pandemic has immensely impacted theatrical and home/mobile entertainment, as movie theatres and production studios were closed temporarily. For instance, in 2020, the entire global theatrical & home/mobile entertainment market reached $80.8 billion, the lowest figure and a decline of 18% compared to 2019. The sharpest decline was in theatrical revenue which dropped from $42.3 billion in 2019 to $12 billion in 2020. Theatrical entertainment accounted for only 15% of the total global entertainment revenue, compared to 43% in 2019.

Millions of people being quarantined, viewers were compelled to stay at home for their entertainment which became the reason for the emergence of new streaming video services.  Such as Disney+, Universal, and Warner Bros. joining Netflix and Amazon. This availed people sitting at home, theatre level experience of premium TV and high-quality movies across various screens and providers. This trend towards digital entertainment was accelerated in 2020 as revenue climbed to $61.8 billion, an increase of 31%. As of 2021, there were around 1.1 billion online video subscribers worldwide, an increase of 26% compared to 2019.

Thus, it can be said that COVID-19 has almost broken the theatrical entertainment industry which is now recovering however, it has also given rise to a new world of video streaming, and gaming which is becoming a new trend. 
(Source: https://www.forbes.com/sites/bradadgate/2021/04/13/the-impact-covid-19-had-on-the-entertainment-industry-in-2020/)

Recent Developments

• Rise of Streaming Platforms: Streaming services like Netflix, and Amazon Prime have revolutionized the traditional film industry, offering the convenience of enjoying TV shows and movies at home.??
• Technological Advancements: Technology advancements in the industry like virtual reality, augmented reality, 5G networks, and 3D cinema are significantly elevating the movie-going experiences.
• During the year 2023, Sony Pictures Entertainment (SPE) signed a partnership with the UK newspaper, The Guardian. This collaboration will give Sony Pictures Entertainment exclusive first-look rights to the Guardian’s global journalism.
• Streaming giant Netflix and film production and distribution company Yash Raj Films announce a multi-year partnership to produce films and series for global audiences. 
• In 2021, one of the Indian film industry’s biggest collaborations took place when Bhushan Kumar’s T-series, one of the largest music labels in India, joined hands with Reliance Entertainment, a leading media and entertainment company, to provide more than 10 films together.
• In the year 2020, Comcast Corporation acquired XUMO, an online platform company offering TV channels and movies.
• In November 2023, Disney announced it would buy Comcast's remaining third of the total shares of Hulu for around $8.6 billion, making it the sole owner of the streaming service after already owning a 60-percent stake due to its acquisition of 21st Century Fox in 2019.
• In the year 2022, Netflix announced the acquisition of world-leading independent animation studio Animal Logic to support Netflix’s ambitious animated film slate.

With the help of the above study about the Movies and Entertainment Market, it can be concluded that the market for Movies and Entertainment worldwide is expected to develop significantly soon. From the report, one can understand and infer the market dynamics, segmentations, status and trends, and key players in the market. It provides data regarding various topics such as market dimensions, prevailing trends, competitive landscape, and the outlook for prospective expansion. This allows the reader to understand and access reliable data about the market and industry.

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