Impact of digitalization on entertainment investment 

The entertainment investment and funding patterns are changing, and it is expected to stay and accelerate in the future, where the trends are widely dominated by globalization, digital streaming, reaching a wider audience, and trapping opportunities in emerging markets. 

Goldman’s report on the music industry states that music streaming services helped to rebound the slipping revenues, which are expected to reach $44 billion in 2030. 

The number of paid streaming and subscriptions will increase and generate over $27.5 billion in 2030. With the faster and smarter 5G networks, movie and music streaming on mobiles will become vital where Generation Z consumers are comfortable watching digital content on phones and YouTube. 

On average, they spend 3.4 hours a day watching videos, where they mostly look for entertainment videos. 

Netflix and Cinema

Traditionally, such businesses were mostly handled by a limited number of film production companies. Investment in the sector of creativity and art may not yield literal cash returns as other expressions inspire it. It can provide ideas to solve life problems. Studies claim it has an exponential fiscal impact on the local economies. 

Some artists and investors believe Netflix, like digital screening, has been creating a crisis for cinema. Recently, the Cannes controversy over NetFlix initiated a wide debate on the future of film production and distribution. 

These are some of the key areas that require funding. The British Actress Dame Helen Mirren said there is nothing like sitting in a cinema and there will always be people who believe in film theatres. 

Some find Netflix a threat that discourages subscribers from going to the theatres. It is similar to the worries created by Amazon Kindle that were thought to impact the book trade, but it has been found that in 2018, the print book market increased, and both the media continue to coexist. 

Stats

Streaming can provide affordable film access at a lower subscription than average cinema tickets. It has been seen that the number of Cinema attendances increased in recent years. 

2018 was one of the best since 1970, as per UKCA. 1.3 billion tickets were sold in the US and Canada – with a growth of 5 per cent. The new box office record was $11.9b, and the US video subscription increased 17% in the same year. A study by EY shows cinema attendees are most likely to subscribe to multiple streaming. 

How do you fund music?

The investment schemes private firms offer in music and film production should be carefully examined by prospective investors. The businesses in such sectors are mostly opaque - unable to provide complete details of how the funds are used in production and marketing strategies. 

Globally, the record labels invested $5.8b in A&R and marketing, including $4.1b of AR investment and $1.7b for marketing costs, equivalent to 33.8 per cent of the global recorded musical revenues.  

The data is significantly higher over 2015, per the International Federation of the Phonographic Industry (IFPI) reports. Such investment provides a new role to the recording companies.