Disclaimer: This post is intended solely for informational purposes and does not aim to disparage any other industry.
The entertainment industry can be broadly categorized into two major segments: Passive and Interactive. To put it simply, passive entertainment encompasses forms like music, podcasts, and film, where consumers do not actively engage with the content, while interactive entertainment includes industries such as gaming, where active participation and interaction with the products are central to the experience.
It also is the fundamental reason why the gaming industry maintains a dominant position within the broader entertainment landscape.
šImmutable Method of Product Consumption
The film industry has undergone significant transformations in the 21st century, primarily driven by the proliferation of the mobile industry. The traditional practice of attending theaters is progressively waning as individuals now have access to an extensive array of choices at their fingertips. Despite this shift, the fundamental act of viewing content on screens remains an enduring aspect, and it is unlikely to undergo substantial changes in the foreseeable future. While ćNetflixć has experimented with interactive methods, it never captured widespread attention from audiences.
Similarly, the music industry has experienced parallels. Major IT companies like ćAppleć have ventured into innovative services such as ćSpatial Audioć, focusing on an experiential approach. Nevertheless, the fundamental action of "listening through headphones/speakers" persists, showing resilience to trans-formative shifts.
šSo What Happens?
The typical approach that passive entertainment industries adopt to mitigate this issue is to transform the IP into an interactive gaming experience.
Gaming companies also leverage their intellectual properties (IPs) by adapting them into television series or cinematic productions. However, this practice is often driven by strategic marketing initiatives rather than serving as a primary revenue stream.
Super Mario Brothers (2023) - $1.3B
Warcraft (2016) - $439M
PokƩmon Detective Pikachu (2019) - $433M
Rampage (2018) - $428M
Super Sonic 2 (2022) - $401M
*** Avengers Endgame (2019) made approximately 2.8 B USD
šThen Why is the Gaming Industry More Dominant?
ā Contrary to passive entertainment, interactive entertainment can be adapted into passive forms
The e-sports audience has been experiencing an annual growth rate of approximately 10%, reaching a total of 532 million viewers in 2022. When we include individuals who follow Game YouTubers and Twitch Streamers, this number expands significantly.
ā Games are intricately intertwined with a diverse spectrum of industries
Hardware : Advancements in technology have mitigated the necessity for individuals to frequently invest in new audio equipment or higher-quality displays, as human perception of auditory and visual experiences has inherent limitations. Nevertheless, the demand for upgrading gaming hardware remains imperative when engaging with increasingly demanding video games that necessitate higher specifications.
Software Development: Enterprises engaged in the production of game engines, middleware, and development tools, which play a pivotal role in facilitating the game creation process and server operations, share a profound and integral connection with the gaming industry. While the film industry is closely associated with this particular sector due to its utilization of 3D animation and computer graphics, the music industry remains relatively unaffected by technological advancements in this domain.
Future Technology : The gaming industry acts as a driving force for technological progress, encompassing a spectrum of innovations such as Virtual Reality (VR), Augmented Reality (AR), Blockchain, Non-Fungible Tokens (NFTs), Accessibility enhancements, and various other advancements. These innovations frequently transcend the confines of the gaming realm, permeating diverse sectors and exerting a profound influence on the trajectory of technology and human experiences at large.
ā Longer Product Life Cycle
The subscription model alleviates the need for individuals to make separate purchases for each piece of music, album, movie, or show they consume. Consequently, after a product's market release, it becomes essential to explore alternative revenue streams, such as live concerts or advertising, in order to generate profits.
Although the exception exists, the approximate weighted average duration that songs remain in the Billboard Top 100 is around 7.8 weeks.
In contrast, video games incorporate in-game purchases, offering cosmetic items or power-ups to enhance the gaming experience. This dynamic allows for the continual creation and sale of new products as long as the game remains active.
Games designed as live services can remain on global charts for multiple years or indefinitely.
šWill It Be The End for Other Industries?
I truly believe that innovation often arises from the fusion of existing concepts and the synergy between different industries. This holds true for the market, where the convergence of two or more sectors can lead to exciting and unexpected developments, much like the transformation of movies into interactive games. However, these collaborations must extend beyond mere marketing strategies to deliver substantial value.
One innovation that recently grabbed my attention is the Film Music Concert. In this format, an orchestra performs the film's soundtrack synchronized with the corresponding scenes projected on a screen. Although devoid of dialogue, this concept relies heavily on the audience's familiarity with the movie. While it may lack context for those who haven't seen the film, this reliance on existing viewership provides a degree of predictability in terms of the audience size. Consequently, it mitigates some of the inherent financial risks associated with budgeting for such endeavors.
The Film Music Concert exemplifies how creative amalgamations of entertainment and technology can yield unique and captivating experiences, offering opportunities for both nostalgia and innovation within the entertainment industry.
šIn Summary,
In an era where market saturation is a prevailing concern, fostering close collaboration among industries has emerged as a critical imperative. This collaborative approach enables businesses to navigate the challenges posed by overcrowded markets, fostering innovation and sustainable growth.
