Peter Csathy
Contributor
Peter Csathy is Chairman of CREATV Media, a media Creation and advisory firm and the author of “Media 2.0 (18): An Insider’s Guide to Today’s Digital Media World & Where It’s Going”.
More articles by this contributor
Ten forecasts for electronic media in 2018
Netflix ought to be Scared of Disney’s OTT play
2018 has been a year of massive mergers and acquisitions, together with AT&T/Time Warner, Disney/Fox and Comcast/Sky. The #MeToo movement made headlines, and also the dominant emotion in boardroom discussions around Hollywood and outside was fear … plenty of fear in the ranks of our tech-infused world of entertainment and media (and on earth itself).
What exactly does the crystal ball predict for 2019?
Below are a few of the narratives which will shape the world of entertainment next season and also set the stage for its roaring 20s of the network industry.
PREDICTION #1 — Blood proceeds to spill in the constant battle amongst premium OTT video giants, as Apple and Disney join the subscription video fray and add to the epic collective assault on Netflix. In the midst of this all, smaller “niche” players find their singular voices which draw “fandom” and wider monetization, or risk being swallowed and consumed by their own strategic investors (to get a portion of what they would have controlled a couple years back).
Originals are the principal weapon used in the superior subscription streaming video battlefront, extending websites ’s fresh “Golden Age” for founders and additional skyrocketing content-related growth and production costs (such as the cost tags for A-list marquee talent). Fierce premium OTT video competitors increasingly utilize content both offensively and defensively, like Disney withholding its crown jewels from Netflix (Star Wars, Pixar, Marvel, Princesses, X-Men, Avatar). Netflix believes the heat, as will its own shareholders, as the collective team of “Netflix-Killers” put increasing pressure on its own pure-play small business model.
Netflix ought to be Scared of Disney’s OTT play
The newly enlarged list of digital MVPDs (multi-channel video program distributors) fix their initial flaws, provide users real competitive choice, and quicken consumer cord-cutting even further. Whereas we began 2016 using 2-3 actual, viable mainstream options in the U.S. for live tv, as of 2019, consumers today can get almost 10 (satellite, satellite, Hulu Live, YouTube TV, DirecTV Now, Sling TV, PlayStation Vue, fuboTV, etc.). Andin these nationalistic instances, let’therefore forget about massive international players like Tencent, Alibaba or Baidu’s iQIYI, which went public in the U.S. markets last year.
Amidst this conflict of video giants, several bigger so “niche” or segment-focused video players expeditiously find their uniquely compelling voice and construct a fandom-fueled multi-pronged monetizing brand around it, or just get lost in the sounds.
FILE – This June 27, 2015, file photo, shows the Hulu emblem on a pub in the Milk Studios space in New York. Hulu stated Monday, Aug. 8, 2016, that the organization is falling the free TV episodes which it was known for as it works on establishing a skinny bundle of buffering TV. (AP Photo/Dan Goodman, File)
PREDICTION #2 — Media-Tech driven M&A proceeds to rule the day in most segments. On the video side, both traditional media companies and undercapitalized and underperforming privately-held new media companies languish within this beyond-crowded OTT video distance and become plausible M&A targets.
M&A is a hallmark of the overall electronic, multi-platform tech-infused transformation of social entertainment and media business. The same as AT&T closed its purchase of storied traditional (yet slow-moving) Time Warner ($85 billion), Disney beat back Comcast to get Fox’s amusement assets in 2018 ($71.3 billion), Comcast fell back and obtained Sky ($39 billion), and SiriusXM obtained the remaining 81 percent of Pandora it didn’t own ($3.5 billion), anticipate more gigantic bargains in 2019, jointly with a number of smaller, yet still important ones. Viacom/CBS is just one likely candidate.
And don’t just look inside U.S. boundaries. No digital wall is present in our social media world, which means that M&A’s pace will quicken globally also. Remember, the Comcast/Sky deal reflects a U.S. behemoth’therefore ambitions to significantly expand its footprint into multiple European lands. Lots of mega-companies around the planet desperately hope to enlarge their holdings to areas whereup to now, they’ve not been.
To be more clear, not all of M&A will flow from weakness. On occasion the numbers offered simply will be too large to reject. However make no mistake. Weakness will abound amidst hyper-competitionplayers and players will swallow winners up in an environment of accelerating M&A. Lots of the so-called niche-focused OTT video services still mainly rely on ad dollars (particularly the older ones), but remember, Google and Facebook already have about 2/3 of the international digital advertising marketplace. That means that most pure-play OTT video players simply cannot succeed on ad dollars . And, for most, other methods of monetization will likely be outside their reach, as they fail to deliver a sufficiently compelling, recognized and emotionally connected media experience. So, similar to Uproxx did last year after Warner Music Group obtained it (likely to get a tune ), anticipate a number of the new media players to lose their Indie standing. 
PREDICTION #3 — The music business ’s streaming-driven turnaround proceeds and streaming revenues speed, but pure-play audio providers led by Spotify continue to hemorrhage money as losses mount. The giant “large box” retailers of this day — Apple, Amazon and YouTube (especially YouTube) — brazenly march on, indifferent to that suffering with their basically different underlying marketing-driven small business models.
Yes, even Spotify boasts massive scale. Yet, scale does not monetary success make. In actuality, pure-play growth success contributes to higher and higher losses because of sobering industry economics these pure-plays can’t stomach, however, the behemoths can because of their multi-pronged small business models. These harsh realities imply that traders of many pure-play streaming audio providers are going to take a good look at themselves in 2019 because they consider their next strategic next steps. Many will recognize that they could ’t go it alone. And that contributes to more M&A, much as we saw last year with SiriusXM buying Pandora and LiveXLive buying Slacker. Spotify isn’t resistant. Unless it successfully expands its business design and drives significant new revenue flows, it too may be purchased. Facebook anybody?
NEW YORK, NY – APRIL 03: The Spotify banner hangs from the New York Stock Exchange (NYSE) on the afternoon that the audio streaming service starts trading stocks in the NYSE on April 3, 2018 in New York City. Trading under the symbol SPOT, the Swedish firm ’s losses climbed to 1.235 billion euros ($1.507 billion) annually, its largest ever. (Photo by Spencer Platt/Getty Images)
PREDICTION #4 — Tech-driven media companies thrive and progressively dominate the entertainment world using data to their benefit. They utilize AIvoice and machine learning how to dominate further and much more widely infiltrate our lives and affect social websites and entertainment experiences.
Netflix, Amazon and Facebook increasingly mine their profound information about all our hopes and visions to maximize “hits” and minimize “misses” as compared to traditional media companies. In several respects, the studios simply can’t compete. Faced with that reality, the quest for data — along with the services which offer, analyze and inform — takes on new urgency. Further, even the Hollywood establishment and creative community still have yet to know at least in large numbers — the energy of fresh cost-effective tech-driven methods to examine and quantify new personalities, stories and involvement to be able to more smartly and efficiently place their large expensive bets.
The new tech-driven media giants hope to grow their overall Media 2.0 dominance during the soothing voices of Alexa and Siri (sorry Google, yours is a little less so) and also the total AI/machine learning revolution. “Virtual assistants& ” & & ldquo;intelligent speakers” (or anything you wish to phone them) further dominate our house discussions, improve considerably over time, also serve up our favorite content via “smart ” hints (in addition to increasingly targeted and brighter incentives, promotions, ads and products ). 71% people use voice supporters at least one time daily (most often for choosing the music we want to hear), so voice most definitely is here to remain.
More exotically, and possibly somewhat densely, AI also progressively drives so-called “smart ” creation. AI already grows movie trailers which some think approach the impact of their human-generated counterparts. You be the judge — check from the very first AI-produced movie preview, maintenance of IBM’s Watson, such as the fittingly AI-themed 2016 motion film thriller Morgan. Andjust imagine how much AI has advanced in just these last two decades since then. Could AI screenwriters be far behind? Gong Yu, founder and CEO of China’s major streaming platform iQIYI surely doesn’t think so. In his words, AI “could reshape the amusement industry during the next 10-15 decades, considerably more so than the Internet failed within the previous 3 decades. ” Just chew on that for a little.
Thus, AI may develop into a true danger even to creative pursuits which up to the point, most in Hollywood consider are computers, bots, and robots. Tesla maven and global futurist Elon Musk is utterly dystopian and takes things much further, warning that AI could be an ultimate international threat to us all. Musk tweeted 2017 that “rivalry for AI excellence at domestic level most likely cause of WW3. ” Those were his precise words, so which has been Musk’s particular kind of Twitter-speakhis thoughts had become somewhat fuzzy during one of their infamous cannabis-fueled interviews!
Amazon is publishing a software development kit which will let developers integrate Alexa into clever screen devices.
PREDICTION #5 — Behemoths Apple, Google and Facebook, jointly with additional tech-driven media giants and deep-pocketed financiers from around the Earth, boost their already-massive investments in immersive technology and accelerate mainstream adoption of AR.
AR’s gold rush signifies continued growth in the associated wearables marketplace and customer adoption of AR-driven eyewear. Investors of all stripes additionally continue to throw boatloads of money into the overall immersive distance to fuel the development of experiences (such as real world live entertainment and storytelling, not only games) to nourish these new platforms. Anticipate significant investment in articles. The immersive marketplace opportunity is still so laborious, nevertheless its ultimate promise is so good, that the money working to capture it 2019 and past will appear endless. And, when so much money chases a marketplace, that market becomes our customer reality.
The beginning of 5G wireless networks will only accelerate the increase of protracted reality (XR) in most of its forms. Speaking of 5G …
GUANGZHOU, CHINA – DECEMBER 06: Attendees consider 5G mobile phones in the Qualcomm stand throughout China Mobile Global Partner Conference 2018 in Poly World Trade Center Exhibition Hall on December 6, 2018 in Guangzhou, Guangdong Province of China. The provincial conference started on Thursday, using the theme of 5G community. (Photo from VCG/VCG via Getty Images)
PREDICTION #6 — 5G Networks start, show their early media and tech guarantee and prospects, and begin to transform social websites and entertainment experiences (in addition to the general ecosystem which supports them).
5G networks are crucial for media experiences that require low latency, such as AR, VR, and eSports. For AR, 5G lowers the size of customer cans, since processing is currently done on the system itself rather than on the device. That makes wearables increasingly user-friendly and fuels further innovation and adoption. 5G also accelerates more high excellent video consumption on our mobile telephones, thus pushing purveyors of superior OTT video like Netflix to focus on mobile-first articles encounters.
Jeffrey Katzenberg’s and Meg Whitman’s fresh mobile-driven Netflix-like superior video service Quibi (formerly NewTV) surely saw this train coming, and jumped first.
Still a year away from launch, Meg Whitman and Jeffrey Katzenberg’s Quibi retains adding gift
PREDICTION #7 — The oft-overlooked, yet potentially game-changing, live entertainment and occasion plank finds itself within multi-platform Media 2.0 strategies, deepening overall brand participation and monetization chances. Anticipate more important “offline”-associated experiments, initiatives and M&A by both new and traditional tech-driven media companies.
Call this “Amazon Effect,” as players across the Media 2.0 ecosystem stop scratching their heads about Amazon’s direct-to-theater movie releases, brick and mortar retail expansion, and Whole Foods superstore operations — and, alternatively, progressively study, respect and emulate them. Netflix certainly failed in 2018. After trashing Amazon one year before for releasing its own features first in theatres, Netflix announced it would begin to do the same.
Amazon understands what most still haven’t even considered — which lead, non-virtual offline customer engagement may be the most impactful board of all of them, forcing online participation into the actual world (and then back ) to create a digital cycle of daily brand engagement and customer monetization each step of the way. Even traditional media company Viacom currently shows signs of comprehending these online/offline brand synergies. It purchased both youth-focused video industry convention VidCon and audio festival SnowGlobe in 2018.
So, while MoviePass can go the way of the Dodo bird in 2019, picture theaters themselves won’t die. They just will be re-imagined. We humans, following all, are social animals. We want to escape, and we all won’t be fulfilled binging on Netflix alone. Movie theater subscription providers most definitely are here to stay, and Amazon will provide one soon for Prime members. After all, in an enjoyable fact that may surprise you, even more museums populate the planet — more — more compared to McDonald’s. See, there’s hope!
ANAHEIM, CA – JUNE 23: General view of panelists in the 7th Annual VidCon in Anaheim Convention Center on June 22, 2016 in Anaheim, California. (Photo from Tara Ziemba/WireImage)
PREDICTION #8 — The #MeToo Movement has been transform your face (and faces) of both old and new media. And, new faces will invest new industry dollars in fresh (and often very different) content options, bringing us fresh (and often different) tales and transforming social websites and entertainment experiences.
Revelations aren’t even over. Abuse was just much too pervasive. Old players are all gone. New, often younger, tech-driven media savvy faces get a seat in the conclusion table. They alter the match of “exactly everything ” &; ldquo;how” we experience content.
Finally, #MeToo both cleanses the overall new media industry, and matches our dishes with very different media and entertainment options.
(Staff photo by Brianna Soukup/Portland Press Herald via Getty Images)
PREDICTION #9 — Fake news, fraud and breaches of privacy continue unabated and quicken, as does advertising matter for “brand security. ” These apparently unstoppable negative powers continue to place downward pressure on ad-dependent open platforms.
Make no mistake, we’re in the midst of hacking wars, so the likes of which we’ve never seen. That “good versus poor ” truth is here to stay, and players across the tech-driven media and entertainment ecosystem significantly increase their investments within both counter-measures and relevant PR, or risk the anger of consumers and the total ad market (similar to Facebook did this last year).
Twitter cleaned 70 million fake and automated accounts in a two month period last year (roughly 1 million more daily), Instagram declared that over 50% of admissions on its own articles labeled as #sponsored are imitation, Spotify similarly conceded prevalent ad fraud and decreased its total reported articles hours streamed by hundreds of millions of hours, and competing music support Tidal faced accusations that it had faked tens of millions of flows. Just a couple examples of how pervasive fraud and audience manipulation has become within our Media 2.0 globe. These fake accounts make, in the words of Variety, “a shadow army of followers that has comparatively little monetary effect. But execute the same manipulation with audio flows, and it represents fraud. ”
Picture: Bryce Durbin/TechCrunch
PREDICTION #10 — Blockchain technologies and crypto-currency-fueled volatility and investment, already over-hyped and under-performing, proceeds apace. Yet, once more, there will be little to show for it in the world of entertainment and media. At least for today.
Early blockchain leaders continue to be irrationally overvalued, and that’s always true with any nascent industry. But, on a happier note, the voice of blockchain technology — heard thus far mostly in investment circles together with promises of “instantaneous millions” (or perhaps billions) — becomes heard for its more positive possible for the world of entertainment and media. Blockchain technology conceptually holds revolutionary industry-transforming fresh offensive and defensive ability. On the front, blockchain allows new approaches to market content via micropayments and direct creator-to-consumer distribution sans today’s major middlemen. These possibilities begin to show themselves in 2019. On the front, blockchain promises to eliminate piracy, but that occurs in years, maybe not this coming season.
The bottom line
2019 will drive 2018’s Media 2.0 bounds markedly further, driven by these and other industry meta-forces. But, these modifications will be barely noticeable compared to the seismic shifts to follow in the next ten decades.
I close with Paramount futurist Ted Schilowitz’s perspective on all this. In our dialogue, Ted points into two phenomena — the very first of which he predicts “the known unknown,” and the second he predicts “the ten year past. ” & & ldquo;The known unknown” refers to what he calls the “frightful ” fact which we all recognize that massive tech-driven shift is coming, but we don’t know that the “twists and turns that get us all there. ” Meanwhile& “the ten year curve” describes “large dynamic shift waves” which accompany ten-year cycles. Back in Ted’therefore view, we just recently finished the YouTube and iPhone 10-year cycles, and essentially everyone around the globe participates in these double phenomena.
So, exactly what ’s & “the next big thing? ” Ted calls it the “the evolution of the display ” — so “visual computing” via new kinds of eyewear (wearables) that change our mobiles. Believe Minority Report-like content and data discussion, and you get the general idea. “Surprisingly little has altered with human/screen interaction within the past 30 decades,” Ted points out. He reminds me that although user interfaces are becoming more complicated, real screen interaction isn’t vastly different — comparing conversation on Mac displays 30 decades back and on iPhones today.
That is changing right now — because you sitand boil at Ted’s ideas in print, or more likely in your v.2019 screen. According to Ted, we’re only about 3.5 years to this 10-year visual computing cycle. “In 2013-2014we saw the very first notion of commercializing a track-able screen, a plasma display. That is a massive shift. We will fundamentally alter how we utilize our displays. I see an extremely different future where these items will emerge from their cocoon and replace the iPhone, notebook, etc.. You will notice an development of 30 minutes every day, then 1 hour, then two hours, etc.”
Believe that overstates things a bit? Well, Ted cautions you this manner. “It’s the exact same paradigm shift we found with mobile phones decades ago. Just imagine back then that you would — decades after (i.e. today) — carry a device with you nearly every waking moment of your waking life. Even Bill Gates could have said that is absurd. ”
Yet, here we are. Today. In that “unimaginable” planet. That’therefore just how quickly it goes.
Ted is determined about this inevitable “development of this display ” reality, and he’s convincing. “I know the next development is coming. Each these experiments these days are in their way to something really, really important. 2019 will be quite subtle in this revolution. However for the first adopter, since not one of these head mounted immersive devices today will replace our smart telephones. Nevertheless, the constant and continuous evolution of this technology is occurring.
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