Ten predictions for the 2021 media and entertainment industry

As we near the close of 2020, we wonder what the new year might bring to the entertainment and media industry. During these complicated 12 months, we have seen an apparent acceleration of the trends that had been in the works since the early 2010s. In 2021, that transformation of the market will only speed up.

We started the year with social media platforms in the United States, trying to improve their public image after the disaster that followed the 2016 presidential election. They meant to show that they cared about discourse, information, and quality content. For that reason, Facebook launched its own Supreme Court—an oversight board to review appeals to the tech company’s content policy decisions (read Facebook’s Supreme Court will change very little.) 

However, not much has changed at Facebook since. The company has indeed doubled its efforts to tag dubious news from the site following Twitter’s lead, especially since the November Presidential elections. Still, a scathing New Yorker story recounts Facebook’s hands-off strategy for curating content, banning hate speech, and moderating any interaction on the app. Since 2016, the tech giant has ensured its users do not identify the app with the Cambridge Analytica scandal. At the same time, Zuckerberg has had several interactions with the US government, questioning Facebook’s monopolistic nature and its acquisitions of social media platforms like Instagram and WhatsApp. At the same time, Facebook, with Instagram, has had to compete with a new giant from the East—China’s Tik Tok (read Tik Tok, Facebook’s worst nightmare and Facebook’s new Instagram feature could crash Tik Tok.)

Facebook is not the only tech platform to have faced the US government. The other tech giants—Amazon, Apple, Google—have also had to justify their existence. At the same time, they kept growing (according to Standard & Poor’s, Amazon’s revenue grew 47% year over year during the second quarter of 2020.) As we expected, antitrust is the new buzzword in Washington DC (read Antitrust measures for the 21st century.)

But while tech companies grow their market share and struggle with their identities, other market players in the media industry have suffered. Local news outlets have found it hard to survive, with advertisers cutting their budgets as many closed their businesses because of the pandemic. Besides, politics and thus news have become nationalized globally, with stories from Washington DC in the US and Madrid in Spain opening most news outlets. The pandemic brought contradictory numbers. On the one hand, readership grew as customers were confined in their homes with a lot of spare time in their hands. On the other, revenue sources disappeared as local business died off, leading to massive layoffs (read Local outlets struggle during COVID-19.) 

The business model for newspapers has radically changed with the pandemic. Subscriptions are on the rise, while ad dollars have vanished. The trend was already working its way to the mainstream, but the lockdowns have just accelerated. The result is a change in the market dynamics, leaving a few outlets to eat up the whole market in accruing market share and merging with other businesses. One such winner among generalist outlets is The New York Times, which has seen its subscription numbers break records (read Subscriptions work, especially for the NYT.) In the meantime, other generalist media organizations have turned to specialized content to ensure a loyal readership. Some, such as New York magazine, created verticals operating under the same outlet but with different names and approaches (read The verticals’ chess game—how news outlets are reworking their brands.)

The podcasting industry has also seen growth this year, with Spotify closing several acquisitions and developing new ad targeting models. The Swedish firm intends to revolutionize the world of radio, as it once did with the music industry (read Spotify, the podcasting powerhouse, and Spotify’s podcast aspirations.) Other podcasting companies, such as News Over Audio (Noa), have focused on the process of curating, as the role of the journalist turns to editorial (read Noa, where curation is content.)

Finally, the entertainment industry has suffered several upheavals this year, with new streaming services being launched, a rise in subscriptions during the quarantines, and an uphill battle over the audience. The most commented story is that of Quibi, the streaming app that closed six months after birth. Quibi shows us where the industry is going, with content as king and the comfort of watching from any screen as the enabler (read The death of Quibi, a six-month-old app.) With Disney+ and Apple TV+ in play, the year has been one of audience fragmentation as users are unlikely to pay for more than two streaming services. 

With this in mind, 2021 will bring us an acceleration of those trends. We expect the following ten predictions to become a reality:

1. Concentration and consolidation in the media industry. As local news outlets struggle and disappear and large national newspapers control the market share, we predict media power concentration will continue. We will see this through natural growth (such as the Times and the Post) and mergers and acquisitions. Just recently, Buzzfeed bought The Huffington Post, two outlets that target similar clients and work with the same business model—ads and virality. We will see more deals in 2021 as digital natives—like those mentioned earlier—struggle to survive.

2. Subscription as the win-win business model. With advertising revenues taking a dive, subscription models, based on customers’ loyalty, will keep expanding. In Spain—a  market we particularly follow,—we have seen several national outlets adopt this strategy in 2020, a trend that will continue throughout 2021. This will also mean that the content provided will move toward top quality (if not, readers won’t pay.) Still, news outlets should know better than to base their survival on one single revenue source. Diversifying is key.

3. Specialization on the rise. As the generalist media market becomes increasingly concentrated, they will leave room for specialized outlets to grow. We have seen this with the increase of verticals, the success of Quartz, and the growth of business-to-business media. This type of journalism is mostly based on subscriptions, as the readers rely on it for their professional development. They won’t stop paying for the content because they can’t access the information anywhere else. Specialized outlets will see 2021 as their year to expand.

4. New ways of monetizing audio. Podcasting is already established industry, but few have cracked a way to monetize it. We expect Spotify and other firms to launch some subscription model for podcasts, which had traditionally been sustained by ads. At the same time, firms like the platform Noa will keep increasing its audience, as demand for content curation is on the rise. Noa already uses subscription strategies to monetize their content. Curation and subscriptions for podcasts will dominate the audio industry in 2021.

5. Rise of slow journalism: initiatives to improve the experience. More sites such as Scroll, a subscription-based service that provides an Internet experience free of ads and pop-ups for readers, will be launched. Self-care is here to stay, and in journalism, it has barely begun. We will see more outlets reducing the number of stories, curating their content specifically for the subscriber, and promoting what’s known as slow journalism. 

6. Political problems for tech giants. Social media platforms such as Facebook will continue to face political scrutiny as the lawsuits against them move forward. We expect the antitrust sentiment to grow, with new acquisitions being blocked by Congress or at least being put under further review. This does not mean the platforms will shrink; on the contrary, they are still growing. But we will see more criticism as the new decade begins.

7. Online spaces for fringe politics. Since 2016, we have seen a rise in identity-based journalism. This year, we will see how that turns to social media. The success of Parler, the right-wing social media app, is a sign that the polarized conversation is no longer taking place in the same space. Conservatives, tired of mainstream sites, are joining Parler and thus abandoning a space that had long been described as the public agora. The poles are distancing themselves even in terms of platforms. This trend is only going to accelerate.

8. Fight for content among streaming platforms. Quibi’s failure was a wake-up call for streaming platforms. The app had based its business model on two things: one, celebrity content, and two, smartphone distribution. The conclusion is simple. Users want variety in distribution and GREAT content. Netflix and Amazon Prime keep losing movies and shows as the owners of those rights launched their own proprietary streaming services. It’s the golden era for studios with quality-content, as the platforms invest in buying the next hit. Thus, content production will rule in 2021.

9. Social media entertainers. Quarantines have accelerated another trend: the rise of the social media entertainer. Locked at home, we started spending more time on social media apps, especially Instagram and Tik Tok. We scoured the apps looking for entertainment, sometimes for hours. As a result, a few comics and Instagrammers have become celebrities. Jordan Firstman, a comedian that became viral in the summer, is one example. He has gone from virtually unknown to making deals with Vogue. With witty humor and a knack for understanding our current culture, Firstman is the perfect example of the social media entertainer. We’ve grown used to following them, and even if the pandemic recedes, we will still be their loyal followers. 

An impression by Jordan Firstman on his Instagram

10. Increased agony for movie theaters. As streaming platforms gain relevance with quarantines, movie theaters are struggling to survive. In many cities, they are still closed indefinitely. During 2020, they tried to switch up their monetization strategy offering subscriptions to clients, so they could watch a number of movies per week for a fixed price. The subscription-based movie ticketing service MoviePass was one such example. AMC offered the same. The model bypassed the increasing ticket prices, asking subscribers to pay $24.95 monthly for three movies per week. That strategy is now on pause and will continue to be so. Besides, movie theaters did not only provide an experience; they also had exclusive rights to movie premieres. Now, that era is over. Warner has announced it will release its movies on movie theaters and HBO Max at the same time. So, what can the former one do? They can ramp up the experience they offer. But that’s about it. We expect that the ones that survive the pandemic will transform themselves to offer a unique watching experience, tailored to movie-lovers.

Concentration, new forms of storytelling, and polarization will rule 2021, continuing with the trends this year brought to light. At the same time, we will see a slowdown in the amount of startups launched, an increased distrust of Silicon Valley and the end of the venture capital era. With the failure of prospective unicorns such as WeWork, Theranos, and others, investments from venture capital firms have dried up. 2021 will be a slow year in a new decade. If the 2010s were the decade of tech innovation, Silicon Valley and money poured into crazy ideas hoping for big returns; the 2020s will be, and mainly due to COVID-19,  the decade of slow recovery, and less bullish investments.