US Entertainment Industry Trends
Trends in the United States entertainment industry include (a) the dominance of television shows and movies over other entertainment forms, (b) consumers' use of multiple subscriptions to customize their entertainment experience, (c) the reaggregation of entertainment services, (d) the convergence of telecommunication and entertainment content providers, and (e) the emergence of new and immersive entertainment media.
TREND 1: DOMINANCE OF TELEVISION SHOWS AND MOVIES OVER OTHER ENTERTAINMENT FORMS
- Consumers in the United States are preferring television shows and movies over music, video games, and other entertainment forms. The biggest portion of the hours Americans spent on entertainment in 2018 was spent watching television shows and movies. While 27% of these hours were spent watching television shows and movies, only 19% were spent listening to music, and only 16% were spent playing video games.
- The rest of the hours were spent on other activities such as social networking and reading.
- Even though live television, digitally-recorded video, and pay television on-demand content accounted for almost 50% of the hours spent watching television shows and movies, subscription video on-demand (SVOD) providers such as Netflix, Amazon Prime, and Hulu are gaining traction. According to Kathi Chandler-Payatt, an analyst for the media entertainment industry at NPD, "while video content topped Americans’ entertainment choices last year, their viewing continued to shift toward subscription video and other digital forms of viewing."
- In 2018, over 50% of consumers in the United States streamed video content through subscription services. Moreover, 22% of viewing hours were accounted for by SVOD providers.
- The preference for watching television and movies is being driven by the proliferation of digital options for viewing video content.
TREND 2: CONSUMERS' USE OF MULTIPLE SUBSCRIPTIONS TO CUSTOMIZE THEIR ENTERTAINMENT EXPERIENCE
- Consumers in the United States are carefully selecting which streaming video, television, gaming, and music services to subscribe to. It is no longer uncommon for consumers to subscribe to multiple entertainment services.
- Of consumers in the United States in 2018, 69% had streaming video service subscriptions, 65% had pay television subscriptions, 41% had streaming music service subscriptions, and 30% had gaming subscriptions.
- Forty-three percent of households in the United States have subscriptions to both streaming video and pay television services.
- On average, consumers in the United States subscribe to three paid services for streaming video. Consumers willingly pay for these services mostly to access original video content (57%) and avoid ads (44%).
- Popular entertainment subscription services include Netflix, Hulu, Amazon Prime Video for television and films, Spotify and Apple Music for music, and PlayStation Now for gaming.
- This trend of subscribing to multiple services is being driven by the need of consumers to take charge of their entertainment experience and to tailor the entertainment experience to their own preferences.
TREND 3: REAGGREGATION OF ENTERTAINMENT SERVICES
- It should not be overlooked, however, that more and more consumers are finding the entertainment service selection process frustrating. The growth in the number of entertainment services available has made the process more complex. As a result, signs of reaggregation have been observed in the country's entertainment industry.
- For example, Apple is on track to launch its streaming service Apple TV+, which will allow users to watch video content from multiple networks including Starz and HBO and incorporate news and gaming subscriptions.
- Spotify is also partnering with Hulu to offer consumers a discounted streaming music and video package.
- It appears this reaggregation is happening to prevent costs from going up. As studios and networks (e.g., Disney and ESPN) pull content from competitors and build their own streaming services, content costs may unnecessarily increase. To counter this, some players in the entertainment industry decide to reaggregate.
- The number of viewers in the United States who feel positive about the increase in the number of options had significantly dropped from 46% in 2017 to 29% in 2018.
TREND 4: CONVERGENCE OF TELECOMMUNICATION AND ENTERTAINMENT CONTENT PROVIDERS
- Content providers and telecommunication providers continue to converge.
- To illustrate, T-Mobile US, having acquired Layer 3 recently, is looking to offer pay television. AT&T is also incorporating Time Warner assets in its own entertainment offerings.
- Verizon, which is set to offer 5G, is partnering with Apple and YouTube to offer consumers a network and content bundle.
- With subscription streaming services becoming mainstream and consumers seeking original content, telecommunication networks are facing increased pressure to include digital content in their product and service portfolios.
- To remain competitive, telecommunication networks are increasingly finding it necessary to own content and monetize it over their mobile and fixed networks.
TREND 5: EMERGENCE OF NEW AND IMMERSIVE ENTERTAINMENT MEDIA
- New and immersive media will scale up in the next decade as 5G networks emerge.
- 5G networks will bring about numerous revenue opportunities for the entertainment industry in the United States. It is expected that revenue opportunities worth $1.3 trillion will open up for the industry in the next decade.
- Gaming service Hatch is one example of a company taking advantage of the rise of 5G networks. Hatch, in partnership with Samsung, is introducing 5G cloud gaming in the country. Its app will allow users to enjoy over 100 premium games with faster speeds and lower latency.
- Another example is Verizon, which is teaming up with Walt Disney Studios to deliver 5G connectivity to all work aspects of Disney's StudioLab. According to Diego Scotti, chief marketing officer at Verizon, 5G has the ability to revolutionize the entertainment and filmmaking industries.
- The development of new and immersive entertainment media, such as those powered by virtual reality and augmented reality, is being driven by the performance and technical improvements that 5G offers over 4G. Compared to 4G, 5G offers 100-times faster data speeds, 10-times lower latency, and 100-times bigger network capacity.
To identify the trends in the United States entertainment industry, we consulted numerous reports and articles covering the latest entertainment industry developments in the country. Recent reports and articles published by credible firms and publications such as Deloitte, Hub Entertainment Research, Fierce Video, GlobeNewswire, NPD, Engadget, Mondaq, The Wall Street Journal, and Global Web Index were among the sources we consulted. As we could not locate a source that readily lists the entertainment industry trends in the country and defines for each trend the drivers and the companies that are at the forefront, we read through these reports and articles and looked for common themes. In cases where examples of companies were not readily provided, we conducted separate topic searches.