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## Introduction

Streaming entertainment has experienced significant growth in recent years, providing sports fans with a plethora of options to catch their favorite teams in action. Simultaneously, traditional video entertainment is being replaced by social video and user-generated content (UGC) among younger consumers. To address these challenges and engage with Generation Z, the sports, media, and entertainment industries must create immersive experiences that keep fans coming back for more. In this article, we will explore the perspectives and outlooks for these industries in 2023, focusing on important trends and questions decision-makers should consider.

Testing New Consumption Models

In 2023, sports organizations and athletes will have ample opportunities to deeply engage with fans through high-profile international events and new offerings from influential streaming providers. Sports leagues are exploring both linear and streaming options for their events, while streaming video on-demand (SVOD) providers are searching for the right balance between price point, exclusivity, and ad minutes to counter the high cost of content. The goal is to deliver a premium service to high-paying customers while subsidizing lower-tier subscription rates with advertisements.

Blockchain technology is also being leveraged by sports teams, leagues, and organizations to drive pride of ownership in team- and athlete-related nonfungible tokens (NFTs) and fan tokens. Collaborations with digital asset providers allow leagues to market virtual collectibles and immersive fantasy experiences, adding a new dimension to fan engagement.

Catching the Attention of Generation Z

Both the entertainment and sports industries face the challenge of capturing and holding the attention of Generation Z. This cohort finds UGC and video games more immersive and enjoyable than older audiences, feeling most connected to a community when engaging with these media. To address this, the sports industry is banking on gambling services to increase engagement, heavily marketing these services towards younger audiences. However, this trend may lead to tighter restrictions on advertising and higher age limits for certain forms of betting to avoid negative associations with problem gambling.

To keep up with Gen Z’s shifting attention, focusing on their passion for social justice and social entertainment is key. Social streaming services, UGC services, messaging services, and multiplayer games are all avenues for interactive and trend-driven exchanges. By studying the data around these trends in real or near-real time, companies can ride and even engineer cultural waves.

Important Questions to Consider

Deloitte’s outlooks prompt leaders in the sports, media, and entertainment industries to consider key questions:

  1. How can sports organizations leverage social video and improve interoperability across engagement platforms?
  2. When media rights are in play, what is the best mix of broadcast and streaming channels to grow reach and engagement?
  3. Can brands, studios, and content creators harness the collective enthusiasm of fans throughout the development, production, and promotion of media and entertainment properties?
  4. What tools can brands use to better understand Gen Z consumers and their preferences?
  5. What makes streaming video compelling within the broader landscape of media and entertainment? How can streamers reduce churn and encourage loyalty, particularly among younger generations?
  6. How will social gamers and digital consumers influence the evolution of media and entertainment through their preference for virtual experiences?

Continuous growth and transformation demand a more sophisticated approach to audience engagement and revenue generation in the sports and entertainment industries. By developing a strong vision that encompasses streaming video, social media, and gaming, companies have the opportunity to shape the next stage of these industries’ evolution.

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