Authored by Romano Schaeppi, Analyst, Audacity
MediaTech, a $2.5 trillion market, encompasses the entire value chain where a consumer interacts with a digital screen. This market is divided into Consumer Media and Enterprise Media: Consumer Media deals with sectors like social networks, the creator economy, streaming services, gaming or VR/AR applications. Enterprise Media deals with the underlying infrastructure layer that powers the media ecosystem. This includes the tools and technologies that power content production, distribution, and marketing.
The global MediaTech industry is shaped by two phenomena: First, consumer spending (Average Revenue per User) in developed countries like the USA, Europe, Japan, South Korea, etc., is higher than in developing countries, although usage rates (Average Time Spent Online) in countries like India, Indonesia, and the MENA region are amongst the highest globally. Second, regions like India, Indonesia, Philippines or Vietnam have become a back office for the global MediaTech industry in recent years. Here, basic layers of film and movie processing and various game development workflows are performed.
Technological Catalysts Transforming the Industry:
In recent years, three central technological developments have led to a shift in the digital media & entertainment industry: The expansion of 5G internet has enabled the transfer of more data in less time. Cloud technologies have decoupled the consumption of high-quality content from expensive hardware. And most recently, the development of AI has enabled new interface applications for how content is produced, marketed, and ultimately consumed.
These technological developments have led to a breeding ground for innovative startups, particularly emerging from the Asian market. Here, the need for technological efficiencies is highest in order to produce content as cost-effectively as possible and generate the highest possible engagement rate.
Innovations in Production and Post-Production
In the production layer of short-form video, film, or TV, we see startups using cloud technologies to make post-production independent of expensive computing hardware. Therefore, save up to 40% of costs, create higher data security, and post-production worksteps can actually be offered remotely, which enables access to the global talent pool. Additionally, various AI applications simplify workflow management, ease the effort for repetitive editing tasks like subtitling or the search for historical media assets, or improve 3D animations with the most human-like movements. Especially in the area of live content, we see an efficiency improvement in highlights generation or news automation.
Smarter and More Effective Advertisement and Distribution
In the advertisement and distribution layer, we see various approaches to bringing content closer to actual user behavior, thus allowing advertisements to be broadcast more efficiently. This is guided by contextual ad placement, where recognition software identifies objects, people, environments, and can switch advertisements accordingly. The user behavior of individuals is analyzed, on which day at what time they engage most with which content, and the corresponding advertisement is placed accordingly. Leading to a higher advertisement engagement and thus increasing the purchase intention.
AI-enhanced Game Development
In the game development sector, we see novel solutions that use AI to personalize non-playable characters (NPCs) based on the user’s gameplay. Thus, for example, the difficulty level of offline campaigns can be adjusted, but also interactions can be targeted individually at the player. In addition, in-game advertisements can be adjusted to the user’s gameplay and thus ensure higher advertising efficiency. Finally, various generative AI applications in the production layer especially help develop and design the complex immersive game worlds.
Revolutionizing the Music Industry Through AI
Finally, we observe some startups using AI to revolutionize the music industry. Here, the focus is especially on the automation of repetitive post-production processes, which enable creative creators to produce more content faster. Current music trends on social media and streaming services can be analyzed and patterns used to produce similar music. This is particularly used in the production of background music for games, short-form videos, or podcasts.
These developments lead to the production of higher quality content at lower costs, and users being more strongly tied to digital media. It is expected that the $2.5T digital media & entertainment sector will more than double in the next 10 years. People will spend more time online, and emerging markets like India, Vietnam, the Philippines, or Indonesia, where a particularly young consumer group is already strongly engaged online, will see stronger monetization due to the growth of economic power.
These are just a few of the many use cases changing the mediatech landscape with the emergence of AI across the board.
