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DIGITAL TRANSFORMATION IN ENTERTAINMENT

The entertainment sector comprises different segments, each of which has reacted differently to the digital transformation: some taking advantage of it, others recording not particularly positive results. One thing is sure, these areas, after this revolution, will be different from before.

The entertainment industry is very diverse. It includes many segments (books, radio, television, etc.) with exact and diversified characteristics.

This means that what happens within one of these areas is not said to be reflected in parallel also in communicating sectors, just as it is practically inevitable that these sectors do not react the same way when particular transformations occur. This is precisely what has occurred during the digital transformation.

If in other sectors – finance, food, banking – the advent of digitization has brought significant changes, but after all homogeneous, even if with differences from player to player based on their characteristics and their ability to adapt to innovation, for as far as media and entertainment are concerned, a separate discussion must be made, or rather, several must be made: one for each segment that composes it. Only in this way is it possible to have a more complete and organic idea of how the entire sector is transforming.

  • Radio: hear who is reborn
    Let's begin the review of transformations with one of the longest-lived traditional media, namely the radio.
    Despite its age, the radio continues to be a somewhat relevant medium, not so much for the number of people it allows to reach, on which it isn't easy to be sure, but because it is a sector that has shown a certain flexibility.
    The digital transformation seems to have had a limited impact on the entertainment sector, at least according to what is reported by the audience data released by Ter-Tavolo Editori Radio on the audience of national and local radios, which generally seems to be growing compared to 2018 except in some limited cases (such as RDS, Radio Italia, RTL 102.5, Rai Radio 1 and a few others).
    Net of the statistics, the radio sector is interesting to observe because it has recorded significant transformations since, perhaps more than other sectors, it has proved to be receptive to changes.
    One of these is undoubtedly the birth of the web radio phenomenon. All the main radio broadcasters have equipped themselves with a digital platform on which it is possible to follow all the programs on a scheduled life or a deferred basis, as well as benefit from specific contents relating to the various broadcasts (ascoltareradio.com). This has allowed the various radio stations to increase their audience, allowing many more people to use the content, even using devices other than FM radio.
    One of the main effects of the digital transformation has been precisely this: that of "making the radio come out of the radio," making it possible to listen to it also on other devices, not initially designed to perform this type of function, such as the smartphone, personal computers or even tablets.
    Another trend imposed by the digital transformation on the radio sector is that of podcasts, i.e., audio files with the most diverse contents, listenable on any type of support, which in recent years have been having a sure success and which are managing to make the radio, even more, more pervasive. By their very nature, podcasts are complementary content to the radio, which enriches listening by the users themselves, who can choose between linear or on-demand use.
    Not only that: podcasts have revolutionized radio and radio use because they allow listeners to "personalize" listening, making them free to choose what to listen to, when, and how. This has also been made possible by the fact that dedicated platforms and applications have spread, collected hundreds of them, where users can browse and download the podcasts that interest them most.
    All these aspects have decreed a particular popularity of this type of content which has become increasingly relevant for all those who work in the radio sector. This is demonstrated by the fact that Italian (but not only) publishers, dealers, and advertisers are equipping themselves with their digital audio strategy to capitalize on all of the chances that present themselves.
    Digital Audio, a name used to refer precisely to this new sector of Media and Entertainment content, has become a significant source of additional economic revenues compared to the traditional advertising sales model.
  • Books: paper beats digital
    When we talk about books and publishing in general, we will touch on an area mainly affected (negatively) by digital transformation. One of the entertainment industry's areas, publishing, is growing profitably.
    PricewaterhouseCoopers predicts that between 2019 and 2023, the book market in Italy will grow by 0.2%, ensuring a level of revenues of approximately 2.2 billion euros. And this is even though Italians continue to consume "traditionalist" books, preferring to read a printed volume rather than buying its digital version.
    The so-called e-book, despite the excellent starting premises, has never wholly achieved success in our country. Between 2010 and 2016, the digital book market reached 67 million euros, corresponding to approximately 5% of the Market, and in 2018 the same sector recorded a decrease of 17.2% (source: key4biz.it).
    However, we note the arrival in Italy of a decidedly interesting new trend, which is already quite widespread in other countries, namely self-publishing, which is nothing more than the traditional self-publication of a book. The digital transformation has allowed the formation of numerous dedicated online platforms, in which an author, without the intermediation of the publisher, can publish his work directly and, later, sell it either through these platforms or form of physical points.
    Thanks to this form of "democratization of publishing "made possible by digitization, more than 11,600 self-ebook titles have been proposed in Italy, equivalent to 22.8% of digital publications.
    It is interesting to note another effect of digital transformation: examples of using books through other media are growing. An example is that of audiobooks which, thanks to the popularity of podcasts, which we mentioned above, are increasingly widespread, to the point that there are currently more than 4 million Italians who listen to audiobooks.
    Another example, however, was the presence of Netflix at the Bologna Children's Book Fair, which according to experts, marked the beginning of a "fascinating dialogue between the book and the screen, tradition and the future" from which it emerges that what one sees inevitably influences what one reads as well.
  • There are better times for the periodical press.
    Newspapers and periodicals fared much less than the book segment, which continues to show signs of suffering, even if this is unrelated to digital transformation. Indeed, the latter could offer exciting opportunities to relaunch the entire segment.
    For example, creating an online version of your magazine is possible to increase your audience and meet users' needs, who increasingly need to access the content they prefer how and when they want. Many leading national and international newspapers and periodicals have done this, sometimes registering better market performances than their printed version.
    The path to follow, therefore, is this, even more so if we think of the economic results - decidedly positive - that the New York Times, the Boston Globe, and the Washington Post recorded when they decided to reduce the perimeter of their paywall by reducing the number of articles available for free. Indeed, thanks to this courageous choice, the newspapers above recorded an increase in customers subscribing to the digital-only model, which reached 2.5 million users, which led to a growth in total revenues, for an amount of 1 $68 billion versus $1.56 billion a year earlier.
    This strategy has also borne fruit because it has made it possible to face a problem that the world of information-related media must necessarily manage: credibility. Part of the bad results recorded by the sector is linked to the fact that digital transformation has changed the world of communication, multiplying the number of sources from which a person can gather information.
    If this means, on the one hand, that various publications have been born that provide content only online, on the other, the chances for a user to run into false news have increased - think of the problem of fake news, which often spreads also viral due to social networks.
    "Forcing" people to subscribe allows newspapers to gain status among users and, last but not least, ensures that the greater freedom there is on the internet does not affect the quality of the products supplied to readers.
  • Television is still the queen
    It is almost apparent to underline that, despite the digital transformation, television in Italy and beyond remains one of the most relevant media, if not the most relevant, in terms of its ability to penetrate the population.
    Not surprisingly, according to Censis, over 90% of sample families own at least one television set, and 86% of interviewed said they watch television at least once a day.
    Despite this, television has also undergone a digital transformation and, in its way, has begun to show the signs of digitalization.
    Foremost among these is the arrival and emergence of streaming television. All the main networks have already provided for the transmission of part or all of their programs on digital platforms to allow users to enjoy the contents anytime and, above all, from mobile. This is particularly important because smartphones are one of the most used tools for surfing the internet. One of the actions most often done using one's phone is precisely that of watching video content. The relevance of these platforms, among other things, is demonstrated by the fact that the Auditel-Censis has also begun to take an interest in these new use dynamics, reporting in the second report of 2019 eloquent data about the number of people who watch television in nontraditional ways.
    A second effect linked to digital transformation has been adding new competitors to the Market, which has revolutionized the way of conceiving a television product. It is obvious that we are talking about giants such as Netflix, Amazon Prime Video, and Disney Plus, which have made on-demand the primary way of using video and which, moreover, have created new social phenomena such as, for example, binge-watching – or rather the habit of watching television content uninterruptedly – imposing seriality as a winning format in terms of narrative and Market.
    Another intriguing effect is the excellent complementarity created between television and other media. Think, for example, of what happens on social networks during major television events, such as Sanremo or the Oscars. On these occasions, the web becomes a natural meeting place where people exchange views, opinions, and memes on events they are watching through another medium.
    Indeed, in some cases, natural listening groups are organized to comment live on what is happening. This allows you to discover new forms of sociality and makes a medium such as television active and genuinely engaging, which in itself would provide for purely passive use. It is no coincidence that Facebook has experimented with a specific chat mode, the so-called Facebook Watch Party, which allows users to watch and comment on videos directly with their friends, facilitating interaction while viewing content.

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The Benefits of Digital Transformation In the Entertainment industry

The media and entertainment industries have gone through four digital transformations:

  • Enhancing User Experience
    People used to watch analog movies back then. But today's movies that we see in theaters are "digitalized." Audiences are entertained by crisper images and sharper sounds, thanks to digitalization. Another example of digitalization in the media and entertainment sector is the emergence of 3D, 4D, and 5D movies.
  • Increased Sales
    Digitalization has reduced the price of recording music's production and distribution. There is no requirement for music fans to buy a physical copy of the CD. Listeners can now watch music videos online or download tracks from the internet. Since digital music is so prevalent, numerous online websites provide free digital file downloads.
  • Big Market
    The "second screen" phenomenon has become a global phenomenon. Television viewers utilize a second screen or another electronic device to interact with the program they are watching. It is a laptop, tablet, or smartphone used to watch television between episodes or commercial breaks. This trend aims to increase viewer interaction with television. Additionally, it helps spread social media awareness about particular shows.
  • Simple Dissemination
    In the past, gamers would go to nearby video game shops to buy a game. Gamers can now choose to download the game digitally. By connecting to the internet, gamers can play versus someone who is situated elsewhere. High-definition and improved user experiences are the main reasons the online gaming sector is expanding quickly. Additionally, sales of mobile games have never been higher.
    The future of the media and entertainment sector lies in digital convergence. Digital media is becoming more integrated and easily accessible when traveling. The media and entertainment sectors understand the advantages of becoming digital. These collaborate with digital consulting firms to fully utilize what the internet offers.

Digital Transformation Trends for Media & Entertainment

The following are the top digital transformation trends in the media and entertainment industry

  • Continuing Cloud Adoption and Evolving Infrastructures
    Media and entertainment businesses saw a significant, irreversible shift and change to a predominately remote workforce during and after the pandemic, much like companies in practically all industries. Media and entertainment companies are becoming increasingly interested in cloud technology as virtualized teams move their work online, going well beyond the traditional SaaS offerings to multi-cloud and hybrid cloud installations to support more resilient, secure IP-generating workflows.
    According to the media and entertainment sector, the demand for online content and streaming media had already increased before the pandemic. Following the pandemic, the industry has continued to adopt cloud and hybrid infrastructures due to the insatiable customer demand for internet-based entertainment and labor dispersion.
  • AI/ML Adoption and Resulting Transformations
    Artificial intelligence and machine learning (AI/ML) are familiar concepts to the media and entertainment sector. Studios and game/film production companies have used AI/ML in their creative workflows for years to produce content more quickly and automatically.
    Media and entertainment businesses will continue incorporating AI/ML into their daily operations through 2022 and beyond. In a recent webinar, Sony Pictures Home Entertainment discussed how it used cutting-edge AI and ML applications to build a strong self-service business intelligence platform.
  • Automation of Advertising and Personalized Content
    The media and entertainment sector will continue to use data science, AI, and ML to automate the display of personalized content and provide audiences with more compelling, relevant material.
    Online services like Netflix and Hulu have been using machine learning (ML) to predict user preferences and automate the presentation of viewing options for years. Present-day, end-to-end, personalized content experiences with AI are replacing primitive intelligent recommendation algorithms on traditional media streaming platforms and more recent offerings like TikTok.
    Leading movie studios are implementing ML-driven customization of movie trailers for the big screen, displaying particular components for various target populations and viewers. These platforms will continue to hone their effective, efficient content distribution techniques by mixing structured/unstructured data and ML and connecting viewers with the most pertinent material.
    Media and entertainment companies need to improve their content delivery strategies to increase income at a lower cost of operation. This is because the advertising operations market is becoming more competitive and challenging. Companies are reaching these goals by utilizing AI/ML. Advertisers and media platforms can: By putting into place hyper-targeted advertising campaigns that combine data from many sources to produce fully realized customer profiles:
    1. Deliver more unique, personalized offers.
    2. Calculate churn rates.
    3. By strategic timing and positioning your advertisements, you may increase conversions.
  • Deeper Forays into the Metaverse
    For the majority of businesses and customers alike, the metaverse is still a vague concept. This is quickly changing, though, as popular metaverse development features and technologies in 2022 and beyond include play-to-earn games, online real estate, non-fungible tokens (NFTs), and cryptocurrencies. The metaverse and its underlying technologies continue to open up new options for the media and entertainment industries, notwithstanding the recent dip in cryptocurrency.
  • More Widespread Blockchain Adoption
    Media and entertainment companies are constantly challenged to reduce intellectual property (IP) infringement as entertainment customers migrate to internet viewing platforms in large numbers.
  • Rapidly Expanding Requirements for Stronger Cybersecurity
    Media and entertainment companies have adopted remote work like businesses in other sectors, leading to more permeable security controls than ever before and more extensive attack surfaces. Media and entertainment companies were stepping up their cyber defenses in 2022 and beyond to support their new computing paradigms and secure underlying initiatives for digital transformation.

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Conclusion

Digital transformation has also impeded some emerging sectors, becoming increasingly relevant.

This is the case, for example, of gaming which has found a decidedly promising segment in eSports. The same thing will also happen in the augmented reality sector. These areas, precisely in light of these prospects, will become fundamental to stimulate the creation of new types of content and push the various players to further innovate the present entertainment models.

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