What the Near Future Holds for Media & Tech

Variety Intelligence Platform
Photo Illustration: VIP+; Adobe Stock

With the first quarter of the year already over, there are still so many unanswered questions in media and technology circles about what will happen as 2023 rolls out. Variety Intelligence Platform made more than a few bold predictions earlier this month in a presentation of its ”Trend Tracker” special report at SXSW. Read on to find out what our experts predict will shake out.

Expect a Writers Strike 

Negotiations between the Writers Guild of America and the studios began March 20, and with a wealth of complex issues on the table — detailed in the VIP+ special report “Time to Strike?” — it’s hard to believe a deal can come to pass without erecting picket lines.

The studios’ parent companies have been hit too hard on Wall Street over the past year to feel charitable, whether it comes to streaming residuals or pension funds.

The writers are more unified than ever, and they’re emboldened by their successful 2020 standoff with the talent agencies to go the mat with so much on the line. The only question this time around is how long the strike will last; the 2017-18 one spanned 100 days.

Even though the economic backdrop is not ideal for dealmaking, we’ve already seen a few content companies receive some big investments. So, while the pace of M&A has slowed in 2023, we could still see some deals across a few categories such as paid streaming and gaming.  

The Next Media M&A Will Be… 

The most likely target this year is WWE, which is clearly for sale and has no shortage of possible buyers.

Other sub-scale entertainment companies that could get scooped up include Lionsgate and AMC Networks, though probably not before the end of the year.

But don’t expect sizable Big Tech deals. Lawmakers have their sights set on Silicon Valley, as they look to reign in monopolistic maneuvers. 

U.S. Box Office Won’t Fully Recover

2023 box office has shown signs of life beyond the blockbusters that once seemed to be the only titles to soar, including Disney’s “Avatar: Way of the Water.” “Creed III,” Scream VI” and “Cocaine Bear” have all performed above expectations, meaning domestic box office is performing significantly better than it did by March of last year. There are lots more titles in the coming months that validate renewed confidence.

Regardless, don’t expect a full-year recovery that would see 2023 box office get within striking distance of the double-digit billion figures Hollywood racked up in 2018 and 2019 before the pandemic.

The audience has gotten too accustomed to shrunken release windows putting movies on streaming quicker than ever, disincentivizing the kind of theater attendance of yesteryear.  

Next NBA Rights Deal Will Go To... 

While a growing number of TV rights packages tied to pro leagues are being siphoned away by streaming services, media companies such as Disney and Warner Bros. Discovery are likely to pay through the nose to retain the NBA games they currently split.

That said, they probably can’t afford to keep everything they’ve already secured through 2024-25, which is why they’ve probably already waived their rights to negotiate exclusively so that the league does the inevitable: slice off a portion of games for a deep-pocketed tech partner, which could be Apple or Amazon and maybe even Netflix.  

Cord-Cutting Will Accelerate Further 

Pay TV subscriptions are declining at record levels, with 2022 being the worst we’ve seen yet. And cord-cutting will only get worse from here on out.

Pay TV is the most expensive it’s ever been, and with consumers being more cost conscious than ever, cutting the cord seems a natural way to tighten the belt. On top of that, an even bigger cord-cutting driver will be prompted by NFL Sunday Ticket moving from DirecTV to YouTube TV in the fall. There just aren’t many younger generations paying for TV subscriptions, and it’s a trend that will not reverse. 

Peak TV Has Finally Peaked

After a decade of incredible growth, gravity will finally have its way with the peak TV trend. While streaming’s content volume has made up for the output decline at broadcast and cable, the total number of originals should level off in 2023, as Netflix trimmed its spending by 5% and Disney cut $3 billion out of its own content budget.

Which isn’t to say there’s a massive decline, though if there’s a writers strike, the scripted tonnage will definitely take a significant hit.

Virtual Reality Will Get a Jolt From... 

Apple is expected to unveil a mixed-reality headset in the second half of 2023, which is just the catalyst this market needs to shake off a weak 2022.

Shipments of VR headsets actually declined year-over-year despite the fact Meta has been so dominant with its Quest product line, but don’t be surprised if that company takes its foot off the gas as its metaverse plans fizzle and Mark Zuckerberg tightens his belt to please Wall Street.

Don’t expect anything from Apple to be some kind of iPhone-like overnight sensation — its first product will likely be very expensive — though history tells us this company makes a splash in any hardware category it enters.

Dive into the expansive special report ...

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