With the rapid development of technology and changes in consumer demand, the global entertainment industry has shown explosive growth potential. However, affected by factors such as the epidemic and geopolitics, the entertainment industry also faces certain risks and challenges. For investors, how to accurately judge the development trend of the entertainment industry and make wise investment decisions is particularly important. This article will focus on the investment value, development trends, opportunities and challenges of the entertainment industry investment, hoping to provide a useful reference for investors.
Multiple drivers spurring entertainment industry growth
The entertainment industry has natural strengths and irreplaceable functions. Driven by technological innovation and new business formats, the industry has shown vigorous development momentum. First of all, the penetration rate of digital entertainment products continues to increase. With the popularization of mobile internet and 5G networks, online entertainment has become the first choice for more consumers. Secondly, capital continues to pay attention. In 2021, the global entertainment industry financing amount exceeded $100 billion, which brought development opportunities for industrial upgrading. In addition, the rise of the metaverse has given birth to new entertainment scenarios and business models, and AR/VR and other technologies have been widely used. Finally, the entertainment industry in emerging market countries represented by my country has huge growth potential.my country’s entertainment industry size is expected to reach 3.4 trillion yuan in 2023.
Film and television industry transforms under impact of streaming media
Affected by the epidemic, streaming media platforms represented by Netflix have developed rapidly, and online streaming has become the mainstream means of film and television content consumption. Under this trend, traditional offline movie theaters are facing challenges, but film producers can also expand revenue channels through streaming media platforms. At the same time, streaming media platforms have also become important participants in film and television content production. In addition,Short video platforms such as TikTok have given birth to new content formats. Therefore, for investors, when evaluating investment opportunities in the film and television industry, we must take into account changes in the competitive landscape and business models.
Games and esports benefit from technological innovation
With the improvement of image quality, rendering technology and network conditions, games and esports have shown explosive growth. The global gaming market is expected to grow from $175.8 billion in 2021 to $314.4 billion in 2026. Mobile games, cloud gaming, AR/VR games and other new game formats have rapidly expanded the user base. In addition, the development of esports has driven the prosperity of the gaming industry. The global esports audience has exceeded 474 million. For investors, game development enterprises with technological innovation capabilities and IP reserves are worthy of attention. It is also necessary to pay attention to emerging esports organizations and events.
Value of intellectual property continues to increase
With the continuous enrichment of entertainment content, the value of intellectual property has become increasingly prominent. Well-known IP can help entertainment companies build brand influence, attract users, and expand the industry chain. Walt Disney’s Marvel Cinematic Universe and Warner Bros.’ DC Extended Universe have achieved great success through the development of IP. Chinese entertainment companies are also actively expanding their IP reserves. However, creating and managing IP requires long-term planning and core capabilities. When investing in entertainment companies, investors need to evaluate their IP strategy and IP creation capability.
Investment opportunities exist despite risks
Although the entertainment industry has huge growth potential, there are also risks that cannot be ignored. Factors such as changes in user preferences, competitive pressures, piracy, and policy risks may affect profitability. However, from a long-term perspective, as technology evolves and emerging markets grow, the entertainment industry still has broad prospects. Investors can hedge risks through in-depth research and portfolio diversification. In particular, companies with innovative capabilities, excellent IP reserves, and a global vision deserve attention.
In summary, driven by technological innovation and capital investment, the entertainment industry has long-term growth potential. However, affected by short-term fluctuations, the industry also faces risks. Investors need in-depth research and careful evaluation to make wise investment decisions.