Introduction to Deloitte’s 2024 Digital Media Trends

Deloitte's 2024 Digital Media Trends report provides an in-depth analysis of the latest developments and future projections in the digital media landscape. It covers key insights on consumer behavior, emerging technologies, and industry innovations. This comprehensive overview helps businesses understand the evolving digital environment and prepare for upcoming changes, ensuring they remain competitive and relevant in a rapidly changing market. The report is essential for anyone looking to stay ahead in the digital media industry.

With the convergence of streaming, social media, and gaming, companies need to develop comprehensive strategies to shape the future of media and entertainment, or they risk operating under someone else's vision.

This year’s Digital Media Trends report highlights the ongoing upheaval in media and entertainment, driven not only by streaming, social media, and gaming but also by the interplay of these platforms and the innovative technologies they incorporate. Despite the disruption, a new landscape is emerging that may require media and entertainment (M&E) companies to extend beyond their traditional business models. To enhance the discovery, engagement, and monetization of their intellectual property and services, M&E companies may need to adopt holistic strategies that span TV and film, social media, user-generated content, and interactive gaming.

In 2024, our study indicates that the scope of M&E is vastly larger than it was a decade ago, with boundaries between different media sectors becoming increasingly blurred. Consumer expectations are now more heavily influenced by social media, content creators, and video games than by traditional TV and films. The criteria for evaluating entertainment options are evolving as well.

Survey data reveals that U.S. consumers are questioning the value of streaming services while showing a strong reluctance to pay for social media. As streaming video providers attempt to revive advertising models reminiscent of pay TV, fewer consumers are swayed by commercial advertising. Instead, they seek recommendations from trusted creators and influencers to find value in entertainment options. Increasingly, people are turning to online multiplayer video games for virtual friendships, content discovery, and brand interactions.

While technology has facilitated much of this change, it is the demands and behaviors of younger generations that are driving it. Millennials and Gen Z, along with the following generation, Alpha, highlight America's growing diversity and the shift towards virtual socialization, hinting at an early form of the metaverse. Collectively, Americans aged 41 and under now make up over half of the U.S. population. This demographic represents a wide spectrum of ethnicities, races, gender identities, sexual orientations, and neurodiversity. Our study shows that people expect media and entertainment to reflect this diversity, and key demographics, such as female gamers, remain underserved by providers.

Despite the extensive disruption, M&E companies can capitalize on available tools and talent. Social media creators and influencers can act as guides and tastemakers, promoting discovery, hype, and trust. Fan communities can provide loyal support to artists, personalities, stories, and franchises, aiding studios and providers in expanding their intellectual property into new media. Many people spend significant time on social media platforms, discovering content, receiving recommendations, and participating in viral trends. For all M&E providers, social media should be a central platform for reaching and engaging audiences and should be integral to customer acquisition and retention strategies.

Advanced technologies are more capable than ever of supporting these efforts. Data analytics, algorithms, and artificial intelligence (AI) can help providers and creators develop compelling content and experiences tailored to the best audiences. Our study shows that U.S. consumers desire the level of personalization and customization they experience with social media in other media forms. When discovering content or products on streaming platforms, social media, or games, consumers want the ability to make immediate purchases and add items to their libraries. They also want to follow their favorite stories across different media, including TV shows, movies, and video games.

Generative AI could further transform these areas, potentially unlocking new tools and experiences. It is already empowering content creators and challenging industry norms. Although 70% of respondents prefer TV shows or movies written by humans over those by generative AI, 42% believe both can produce entertaining content. Moreover, 22% think generative AI could write more interesting TV shows and movies than humans. Gen Z and millennials are leading the way in experimenting with these tools, with 18% using generative AI to create images and 25% to create text, while older generations lag behind.

Although the metaverse remains a complex and evolving concept and blockchain technology has faced scaling challenges, generative AI is rapidly advancing. Savvy creators and studios should explore how these tools can enhance human creativity and boost productivity. Generative AI could improve the quality of content creation but might also flood the market with inexpensive and novel content, blurring the lines between "real" and synthetic, commodity and premium. Empowered by generative AI, media and entertainment companies—and society as a whole—may soon encounter a significant increase in novel content and creative output.

Amidst the disruption of the early 21st century, there is a growing demand from audiences, subscribers, and gamers for more deliberate changes to outdated business models. It remains uncertain whether investors will support this shift or prefer to extract the remaining revenue from 20th-century models. Nonetheless, assumptions and strategies based on evolving traditional models face the reality of a broader and deeper revolution in digital media. Companies that cling to traditional business models may struggle in the new, interconnected digital media environment. They must focus on future possibilities rather than the past they are leaving behind.

This year’s Digital Media Trends report delves deeper into how people use and value digital media, providing M&E companies with data and insights to better understand changing consumer interests, attitudes, and identities. With this knowledge, media and entertainment companies can build profitable businesses and navigate a constantly shifting landscape with greater confidence.

Study highlights:

Streaming video services continue to grapple with high costs, high churn rates, and intense competition. In response, streaming providers are revamping business models reminiscent of pay TV—incorporating advertising, bundles, and contracts. However, the effectiveness of these models is questionable in a modern media landscape that increasingly prioritizes creators, influencers, and communities over traditional advertising.

In the United States, approximately 60% of respondents identify as gamers, with an almost equal split between men and women. Despite this balance, women gamers often encounter harassment, bullying, and stereotypes within games and gaming communities. As investments and costs rise for live service games and multiplayer experiences, many women prefer solo mobile games and story-driven adventures. For the gaming industry to sustain growth, it must find ways to better serve women gamers.

Online creators and influencers have become media stars, tastemakers, and guides, steering their followers towards products, brands, experiences, and media content. Traditional media companies might need to establish symbiotic relationships with these creators and platforms, despite the inherent tension in competing for viewers and advertising revenue.

For many individuals, being a fan is a core aspect of their identity. Fans are eager to spend money and follow their favorite video games, TV and movie franchises, musical acts, or sports teams across various entertainment platforms. Identifying fan-worthy franchises early, nurturing fandom, and offering more ways for fans to engage and spend could be crucial for M&E companies seeking increased revenue and loyalty.

Generation Z, millennials, and the following Generation Alpha represent the most diverse generations in American history regarding ethnicity, race, gender identity, sexual orientation, and neurodiversity. They desire media and entertainment that reflect their diverse world and lived experiences.

For questions or comments write to writers@bostonbrandmedia.com