From music to movies, the future of the entertainment industry is based on the next-generation of digital distribution. The digital industry is expanding rapidly and incorporating the people of the Earth, segmenting them into various markets, interest groups, ethnic groups, nationalities, buyers and opinion makers. We have a global digital infrastructure. From devices to platforms to networks, people are able to transmit videos, photos and data at enormous speeds. In turn, those people retransmit to others. All of this is highly cost-effective. It is creating economic opportunities that previously were unprofitable.
With video-on-demand streamed to any device, from a smartphone to a 72-inch plasma screen, and with the merger of retail and online video distribution, a global video distribution platform has been created that did not exist before 2000. YouTube is creating a theme-specific channels and ways to be paid for video downloads, for instance. It’s like drilling for oil in Texas. When the price of oil was too low, the cost of extraction was prohibitive. When the price rose, drilling in Texas became feasible.
According to online advertising research company eMarketer, search spending was expected to rise 27 percent in 2012, to more than $19.5 billion. The firm also predicted that spending would rise by an additional $10 billion or so by 2016.
Since that estimate, there have been mergers and acquisitions that have created a global infrastructure that penetrates even China and Iran. Coupled with social networks that are positioning their sites as a link between consumers and merchants, American entertainment (including sports) is at its highest demand in the global economy, soccer viewing notwithstanding. Digital TV households made up about 45 percent of all TV households worldwide in 2012.
Robert Kyncl, Google’s vice president and global head of business at YouTube, announced in January 2012 his prediction that 90 percent of all web traffic will be video and about 75 percent of channels will be transmitted over the Internet by the end of the decade. The Monitor Institute forecasts that the creative economy could grow from $50 billion in 2009 to $500 billion by 2018.
So what does this bode for the future? Entrepreneurs who possess the unique makeup to recognize talent, manage creativity and understand the global digital market are likely to succeed in attracting investments in startups and small companies penetrating into the video production segment of the global market’s information, entertainment and sports sectors.
Whether participation comes as an investor or as an entrepreneur, the opportunity is here for the near future. The question is, how many small creative companies are prepared to take advantage of this expanding opportunity and how can you participate or invest in that potential?