Forecast: 2021 will be the year of vertical integration
October 27, 2020
Overlapping ecosystems are to dominate entertainment service strategy in 2021, with games, audio, and video set to come under one provider, suggests a report from consultancy firm Omdia. According to Maria Rua Aguete, Senior Research Director at Omdia, vertical integration and commoditisation of IP will come under renewed focus.
The report, 2021 Trends to Watch: Media and Entertainment Super-trends, suggests there will be a Disney-fication of the market. According to Omdia research, the Star Wars franchise generates four times more revenues via merchandise than via the box office
Other key findings:
- Brands that can be deployed (rather than just marketed) in multiple consumer verticals, including toys, games, clothing, theme-parks, and packaged goods, will be an incredibly efficient tool in the post channel era.
- For IP owners that provide a range of consumer facing services (channel and OTT platforms) the next few years will involve focusing on maximising returns on a core set of high-value IP.
- OTT delivery has allowed content owners to bypass typical channel structures and deliver larger libraries, but it has also reduced the role of the channel brand. As a result, the brand of the content has become more important.
- When content has an existing powerful brand, such as the Disney Marvel and Star Wars franchises or the CBS Star Trek shows, content can cut through the noise of competing titles.
- To build a powerful brand, the content must be compelling and the message to consumers must be reinforced at multiple points of contact.
- Large groups will look to develop core brands to carry content, replacing legacy channel brands.