The media and communications industry is undergoing the most dynamic evolution of its history. Explore Slalom's 2024 M&C industry outlook to learn how to navigate this new era.
The launch of the iPhone and Netflix in 2007 put into motion cascading waves of disruption across the global media, entertainment, and communications industry.
In their wake, the adoption of cloud technology opened up new ways to entertain audiences and reach consumers, forcing media and communications (M&C) businesses to navigate the most dynamic evolution of its history—a breathtaking 15+ year journey of disruption, convergence, and competitive realignment.
As streaming increased its reach and impact, M&C companies began a wave of mergers and acquisitions activity to bulk up and compete in the streaming wars, then spent billions of dollars launching and growing platforms. Now, streamers need to become profitable—fast. Studios need solutions to minimize churn and maximize customer lifetime value, just as their cable and telecommunications company (telco) partners do.
Streaming has also had a knock-on effect on cable providers and has become a catalyst for cord-cutting, with pay TV cable subscriptions falling from their peak penetration in 2009-2010, exceeding 100 million or 85% of North American households, to only 42% in 2023, with the total linear US pay TV subscriptions expected to fall below 50 million by 2027. With fewer cable subscribers, ad spend has shifted from linear to digital platforms, impacting media networks, a change characterized by Warner Bros Discovery’s CEO David Zaslav as “a generational shift.” Networks are now seeking to catch the attention of younger viewers, and even more ad dollars are moving to technology competitors like YouTube.
Meanwhile, technology has brought new entrants to the industry, blurring the lines between media, gaming, sports, comms, and technology. Companies no longer compete solely within these sectors; they have converged, and now all compete in the attention economy. Gaming companies now produce Emmy-winning streaming series. Technology companies now have streaming platforms and compete for subscribers, talent, and content. Live sports, entertainment, and theme parks invest in innovative fan experiences. Social media content platforms TikTok, YouTube, Instagram, Facebook, newsfeeds, and others represent the biggest competitors of all for audiences’ attention. With generative AI (GenAI) on the horizon, it is almost certain that further disruption, convergence, and transformation lie ahead.
In this period of dynamism and continual change, companies that align their strategic vision to meet customers and audiences where they are will reap huge rewards—while those who cannot move quickly or decisively may not survive at all. Whether physical or digital, companies will need to optimize their supply chains to meet customer needs in 2024 and beyond.
With the global M&C industry poised to surpass $4.5 trillion in 2027—communications is projected at $1.5 trillion and media and entertainment at $3 trillion—tremendous opportunities and risks lie ahead in the uncharted territory of tomorrow. New business models will continue to emerge, driven by new technologies and consumer behavior.
As we continue to navigate these uncertain but exciting waters, we can expect to see a persistence of trends from 2023 into 2024. Notably, we expect M&C organizations to invest heavily in:
1. Competing in the attention economy
2. Harnessing the power of AI
3. Customer experience
4. Advertising transformation
5. Media supply chain
6. Converged connectivity
Introduction by Steven Polster