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While the potential benefits of GenAI are exciting, media industry participants will keep a close eye on associated challenges. Recent labor strikes in Hollywood were based in part on the job security threat posed by the introduction of GenAI to the creative process. Protecting intellectual property is also top of mind for studios, record labels, publishers, and all owners of content. Trust, accuracy, privacy and fairness will be major areas of focus as GenAI implementation scales up.
4. Box office recovery remains a work in progress
Feature films are tracking to a healthy 20%+ year-over-year growth at the box office, according to BoxOfficeMojo, further solidifying the storyline that consumers are eager to return to theaters to see the latest Hollywood release. Yet, despite decent performance in 2023, results remain 19% below the comparable pre-COVID-19 period. Overreliance on long-running franchises and a wide release slate that is lighter than historical averages are contributing to the slow recovery.
Studios are taking action. While acknowledging that the impact of the 2023 strikes will flow through the release calendar over the next couple of years, media leaders have reaffirmed their commitment to the first-run window. Talk of day-and-date releases in theaters and on streaming services is a relic of the pandemic era. Now, successful films are leveraged to drive streaming sign-ups after completing their theatrical runs. Quality and originality are under the spotlight, too. After the blockbuster results achieved by the “Barbenheimer” phenomenon and record-setting concert films from Taylor Swift and Beyonce – matched against lackluster performance from several franchise installments – commentary out of Hollywood points to a renewed emphasis on fresh storytelling and a focus on excellence in 2024.
Robust ticket sales for concerts, sporting events and theme parks indicate consumers are eager to gather to enjoy entertainment. As the movie business progresses on its path forward, box office results will follow.
5. Will consumers tap out?
Our final observation is about the rising cost of living and its impact on the outlook for consumer spending on media and entertainment: as inflation rates tick down, fears of a hard landing are abating. Yet, headwinds exist, and many consumers are feeling stretched. When just about everything requires a subscription, a movie night with the kids costs $100, and attending a game or a concert runs many multiples of that, industry leaders are keenly aware that a lot of entertainment spend is discretionary. In 2024, we will continue to see M&E companies strive to showcase the value of their offerings with creative packages, innovative commercial partnerships, exclusive features and dynamic pricing.