2024 media and entertainment outlook

Through social media, user-generated content (UGC) has helped redefine video entertainment, disrupt its creation, change the focus of advertising, and break open the guarded walls of celebrity. With UGC leading the way in smartphone content consumption and rapidly gaining traction with users watching on television sets, we expect to see streaming services adapt to try and retain market share in the coming year.

Streaming services and studios seem to have realized that SVOD is a more difficult and expensive business than they may have expected. These companies are under pressure to improve their ad platform’s ability to target specific subscribers, help make their ad platform more transparent and valuable to advertisers, and power sharper content recommendations to subscribers. As SVOD services work to scale their advertising solutions, social UGC platforms have around twenty years of data and algorithmic advancements already behind them—and they offer brands access to recognized creators and influencers.

Streaming services should embrace the new reality that premium “TV-like” entertainment is no longer dominant and now exists in competition with a seemingly endless stream of user-generated content. They should also understand that the emerging media landscape is often built on networks of affinity and less on massive centralized production and distribution businesses. In the coming 12 months, social UGC platforms are expected to continue to set the tone, while streaming services and studios work—and spend—to try and catch up.

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The early capabilities of public Generative Artificial Intelligence (GenAI) models appear magical, sparking experimentation to discern where they can be applied to use cases and business models. Press and pundits believe it to be a game changer—or the latest hype—with breathless speculation about what it will or won’t do in the future. At the same time, there’s uncertainty about how much the models can grow past current capabilities and when the economic value will be large enough to offset the capital intensity necessary to train, run, and grow them.

Media and entertainment (M&E) companies may see GenAI both as a threat and as a potential way to amplify creativity, derive insights from complex data, and do more with less. User-generated content creators are already publishing synthetic media to social media sites, experimenting with its capabilities, and testing audience acceptance. Yet consumers have shown mixed emotions and confusion as they engage with the sudden arrival of synthetic media. Within this maelstrom, the biggest public-facing GenAI services may be reshaping M&E in unexpected ways.

This 2024 media and entertainment outlook explores the relative maturity of Generative AI tools and the capabilities and use cases they can enable for M&E companies and creators alike. We’ll explore the growing status of public-facing GenAI services seeking more relationships with media, as well as the implications of GenAI on content creation, recommendation systems, creativity, and trust. Generative AI appears to be broadly disruptive, though it remains early in its growth. It’s likely to unfold quickly, but how and where remain unclear. What should companies be thinking about as GenAI becomes a larger part of their planning? What capabilities are available now to everyone, and what are possible when combined with existing tools and leading-edge innovations? What factors could slow adoption and challenge executives?

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It may not be far off when video games are barely distinguishable from real life. Or, perhaps, the only sign of hyper-realism could be how far they transport us into other realms so obviously beyond the usual. Designers, storytellers, and communities are all using video games to create and participate in vast and persistent worlds that are becoming bigger than the biggest cinematic experiences and as social as any town square, concert, or stadium.

In Deloitte’s 2024 Digital Media Trends survey of US consumers, 85% of Gen Z, 78% of millennials, 60% of Gen X, and 35% of boomers surveyed are regularly playing video games. Mobile games have enabled many more non-gamers to enter the market, particularly among older generations, but the video game industry seems to be shaped and celebrated by massive hyper-realistic game worlds and enduring multiplayer services. Although the most successful games can enjoy engagement and stickiness, it’s often harder for new games to stand out and endure—and more expensive to develop and market them.

In the year ahead, the largest game companies and publishers may feel pressured to take fewer and more calculated risks. This could lead to fewer new releases from major studios and more investment in already successful properties. At the same time, there may be more games than ever entering the market. While the largest players reckon with high costs of major releases, smaller game studios may be more empowered to develop and market compelling and innovative games while cultivating communities and fandoms around them. Whether gaming, TV, or film—or merchandise and beyond—media and entertainment executives should be thinking about the entire life cycle of their IP and franchises, how these relate to fandoms, and how they can be engaged and delighted for many years.

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