Further media industry upheaval is on the cards, as the world exits from COVID and heads towards possible recession, warned financier and media advisor Joe Ravitch.

“A lot of trends are now being reversed,” said Ravitch, partner and co-founder of Raine group. He was speaking at the APOS conference in Singapore, where U.S.-based Raine has recently opened a local office.

Where the pandemic kept people indoors and online, since the loosening of health restrictions theatrical cinema, theme parks, concerts, gyms and in-person sport and music events have rebounded. People’s online behavior has also been altered.

“Traditional media is losing ground,” said Ravitch. In new media a bit of a bubble is happening. It is becoming a battle for share in a shrinking market, not a growing market.”

He said that even though some countries have laws that keep certain sports on broadcast TV, sports are increasingly moving over to some form of direct-to-consumer platform. That spells change. “Sports is the last thing holding the legacy structure together,” he warned.

He predicted that sports rights prices would continue to surge higher and said that leagues, team owners and media would find new ways – gaming, NFTs and short form video – to monetize sports rights.

Asia is leaping ahead of the U.S. in some ways, he said, because it is not tied down by a legacy cable and pay-TV business. Examples include social commerce and livestreaming. “Livestreaming will come into the west having been developed in Asia,” he said.

Asian media firms, however, may face a challenge from (mostly U.S.-based) global consortia, even in something as granular as local TV. “We are getting to a new level. Local broadcasters don’t have the balance sheets to compete. They also don’t have the direct customer access [that the giant tech firms now possess,” he said.

Ravitch’s most uncomfortable prediction was that a “good recession” may be coming. “Interest rates are rising. Equity markets are not open. There’s going to be less M&A. Capital is going to be scarce. No more IPOs through 2023,” he said, suggesting that this will lead to more thoughtfulness and an end of crazy money. “Unprecedented changes are coming to the industry. Asia is not exempt,” he warned. “[There will be] too many players chasing a shrinking monetization pool in a recessionary environment.”

Meanwhile, financial analyst, Michael Nathanson, senior MD at MoffettNathanson, was at pains to explain to the APOS convention why Wall Street had turned against the sector.

Cord cutting in the U.S. has now reached a record 5 million subscriptions per year, meaning that the ecosystem is getting smaller and TV ratings are falling. 2019 will prove to be a high-water mark for the theatrical industry, he predicted. And, following the pivot to streaming, Netflix now faces issues of maturation, with Asia-Pacific is its remaining growth market.

Natanson warned that the binge-watching patterns that streamers have fostered are extremely capital intensive. Netflix’s best year in terms of cash flow was 2020, when production tumbled.

He predicted an era of greater media sanity and emphasis on monetization and fiscal responsibility. His examples included Netflix and Disney’s moves to introduce ad-supported tiers, Disney’s decision not to chase all the Indian Premier League rights in the recent auction and tech giant Apple becoming the front-runner in certain upcoming sport rights rounds.

Like Ravitch, Nathanson expects sports rights valuations to continue to increase as new entrants join the market.

In streaming, Nathanson predicted re-bundling to occur. That could be driven by the need to simplify functionality and improve consumers’ choices, while also reflecting pressure on consumer wallets. Re-bundling could come through a technical solution such as Google TV, Amazon Channels or Roku, or through further corporate consolidation.