What is powering the next wave of change in media and entertainment?

The M&E industry is at a turning point—AI, creators, and new models are redefining how content is made, monetised, and consumed.

In brief

• Immersive technology, AI and streaming shifts are shaping media. The future belongs to experience-first companies.
• M&E companies need to partner with creators and embrace agile models to stay ahead of platform economics.
• There’s a need to adopt innovative business models and dynamic portfolios to stay ahead of shifting audience behaviours.

Technological advances combined with profound changes in consumer behaviour and expectations have driven the media and entertainment (M&E) industry to an inflection point. Traditional business models no longer apply in a multi-dimensional world where physical spaces merge with digital immersion, artificial intelligence (AI) brings new content creation and distribution possibilities, and audiences become co-creators in increasingly participatory entertainment environments.

In this new world, entertainment venues, gamified sports arenas and experiential destinations are transforming into adaptive, technology-enabled ecosystems — powered by real-time data and AI-driven personalisation. However, media and entertainment companies will be forced to justify their subscription charges as consumers face cost of living pressures on other fronts.

The adoption of AI and other technologies for intelligent automation, generative storytelling and other uses will not guarantee success. Robust governance, up to date technology infrastructure and viable strategies for monetising proprietary data will also be essential.

Inflection point

Streaming platforms are increasingly shifting focus from aggressively pursuing subscriber growth at any cost to fostering more profitable engagement with their existing user base. Revenue models are evolving to reflect economic realities. Rather than relying solely on premium subscriptions, platforms are reintroducing more affordable, ad-supported options. To address consumer reluctance to subscribe to multiple services, bundled offerings that combine content, services, and platforms are gaining traction.

In a back to the future trend, sports content is emerging as a major differentiator in this mix. Just as English Premier League Football proved to be the key driver of UK satellite TV subscriptions growth in the early 1990s, live sports rights are being bought up by streamers in an effort to attract and retain subscribers.

This will extend beyond the broadcasting of games and new models of monetisation, along the lines of the Ryan Reynolds and Rob McElhenney investment in Wrexham AFC, will emerge. In the Wrexham case, the club has been able to generate an international fan base through a hugely popular Netflix reality TV series.

Sport was already a very attractive asset class before the Hollywood duo bought into a little-known Welsh football club. Private equity and institutional investors have been investing in everything from athlete development and technology platforms to infrastructure and media rights. They are also creating multi-club multi-sport ecosystems that drive synergies, boost engagement and expand monetisation.

Moving from niche to next gen

Non-traditional and second-tier sports offer attractive entry points for small investors. Lower asset valuations, fragmented market structures and flexible operating models create fertile ground for platform building. By applying operational rigour, including by consolidating commercial functions and enhancing digital fan engagement, investors can transform niche assets into scalable businesses.

At the same time, generative AI (GenAI) and automation are reshaping how creative media content is produced, localised and distributed — enabling creators to adapt and localise stories seamlessly to different regions and formats. AI is transforming content production by streamlining processes and opening new creative opportunities.

Real-time AI analytics now inform programming, scheduling and investment choices, while AI-driven audience segmentation is revolutionising content monetisation through hyper-targeted delivery and dynamic ad insertion. Returns on these early AI investments are spurring further investment.

Organisations are also investing in next-generation venues including immersive cinema and concert venues. Multi-sensory design utilising AI, real-time analytics, and VR and AT technologies is transforming these physical venues into responsive, data-driven environments.

Visitor numbers aren’t the key success metric they used to be. These venues need to deliver emotionally resonant experiences which will entice people to spend their time and money. Indeed, next generation venue could seamlessly combine personalised shopping, wellness, and learning, curated and packaged to cater to individual visitor preferences. They will need to be capable of constantly adapting to rapidly evolving consumer needs and preferences in a highly dynamic economic and social environment.

Creator economy gains momentum

Another key M&E trend is the emergence of the creator economy which is reshaping how media is produced, distributed and monetised. Legacy media’s role is evolving into that of a content co-creator.

What sets this new breed of independent creators apart is their ability to build trust and intimate connections with their audiences at scale. Savvy media players will partner rather than compete with these creators to access new audiences and unlock new revenue streams.

Indeed, they will need to prioritise creator acquisition ahead of audience acquisition. The audience will come with the creators. This means accepting that the balance of power in the relationship has changed irrevocably and the adoption of new creator-friendly contracts encompassing more transparent and fair revenue-sharing models that support long-tail content. Successful partnerships will embrace co-creation, data access and flexible IP ownership terms.

The combination of linear and streaming businesses within a single organisation is being called into question. We are likely to see the owners spin off their linear interests to strengthen their competitive positioning.

This will offer opportunities to private equity which is very comfortable with disrupted industries that continue to generate cash. That could well be followed by a consolidation of the spun off entities through a series of mergers and acquisition. A similar trend may unfold in the streaming sector where leading players use their financial muscle to rationalise the industry to accelerate their path to sustainable profit growth.

Reinventing media in the age of AI

The advertising industry is also being disrupted. By auto-generating tailored TV ads and accelerating campaign production cycles, AI-powered platforms are removing cost and time constraints. The global technology giants are developing AI tools that automate everything from creative development to media buying, reshaping the advertising value chain and putting pressure on legacy agency models built on manual workflows and billable hours.

Social platforms are accelerating this shift by experimenting with AI-powered, fully automated ad creation and targeting, enabling businesses to generate entire campaigns simply by uploading a product image and description and deciding on a budget.

In this new multi-dimensional world, successful M&E companies will be those that deliver emotionally resonant, lifestyle-relevant entertainment experiences that transform passive audiences into active participants.

This will require media companies to adopt new content creation models that will see them engage in strategic collaboration with creators while transforming their platforms into dynamic economic engines with embedded commerce, analytics and AI capabilities.

To fully exploit the potential benefits of AI, they will need to adopt an enterprise-wide AI strategy, supported by strong governance and a clear roadmap for monetising proprietary data, ensuring transparency, ethical use and long-term competitive advantage.

Finally, they will need to prioritise operational agility and smart capital deployment, embracing innovative business models and dynamic content portfolios to stay ahead of changing audience behaviours and evolving platform economics.

Summary

Technological disruption and shifting consumer behaviours are transforming the M&E industry. AI is reshaping content creation, advertising, and audience engagement, while streaming platforms pivot towards profitability through ad-supported models and bundled offerings. Sports and creator-led content are emerging as key differentiators. Success will depend on immersive experiences, strategic creator partnerships, enterprise-wide AI adoption, and agile business models that adapt to evolving platform economics. Creating interconnected experience ecosystems will be key to staying competitive in the evolving landscape.