4/26/2023 0 Comments Booku revenue stream![]() New revenue growth efforts are further stymied by insufficient alignment, weak coordination, and slower-than-desired execution. Many E&M organizations are hamstrung by operational silos, antiquated incentives, and behavioral inertia. Yet developing multiple revenue streams remains a challenge for many E&M companies, especially those accustomed to meeting their financial goals on the basis of a few dominant revenue sources. Success in this area has emboldened game publishers to extend their intellectual property (IP) and fan bases into e-sports, film and TV properties, and consumer products, all of which are target-rich opportunities that can create additional revenue streams. The trajectory is similar for both Activision and Take-Two Interactive. Live services accounted for about 40 percent of EA’s US$5 billion in FY 2018 revenue, and were up 30 percent for the year. At EA, 35 percent of the players of Madden and FIFA, the company’s two most valuable franchises, spend money on in-game purchases associated with its Ultimate Team game mode, where players manage a fantasy team and improve their squad by purchasing better players. Games are now marketed as digital live services, which offer the potential for content updates and in-game micropurchases of items that enhance player performance and personalize game play. ![]() Game publishers such as Electronic Arts (EA), Activision, and Take-Two Interactive have moved from a single stream - the one-time sales of packaged media - to a multiple-stream revenue model. The sector is projected to grow 28 percent between 20, according to PwC’s Global Entertainment & Media Outlook 2018–2022. Between 20, video games expanded faster than any other major content sector: music, film, newspapers, magazines, books, and pay-TV. Most important, fans spend more, and they are more compelling for advertisers (see “ How to Make Entertainment and Media Businesses ‘Fan’-tastic,” by Christopher Vollmer, s+ b, May 8, 2017). Fans watch more, listen more, participate more, share more, advocate more, and create more. They are constructing portfolios of connected and complementary experiences that tap into the commercial potential of their most engaged users: their fans. Absent significant new sources of revenue growth, the strategic options for these companies will inevitably narrow to continued rounds of cost cutting and preparation for their eventual consolidation.Īmid these challenges, some are succeeding in developing promising new revenue streams - in areas such as subscription services, digital microtransactions, membership, consumer products, live events, and advanced advertising. Meanwhile, many companies remain overly reliant on legacy media revenue streams whose current is ebbing. Consumption and spending habits are evolving with remarkable speed. Traditional sources of advertising and subscription revenues are drying up, and the largest digital platforms are absorbing much of the digital advertising growth. What is different now is a sense of urgency driven by a more arid monetization environment. Many successful E&M companies have always benefited from multiple revenue streams: carriage fees and advertising for pay-TV networks tickets and popcorn for cinema owners single-copy sales, subscriptions, and advertising for magazine and newspaper publishers. Some of the most ambitious players are expanding globally, building new revenue streams in new geographies. Many are prioritizing new advertising products. ![]() Sports leagues and video game companies are converging on e-sports. ![]() TV networks and film studios are developing streaming video services. Companies in every E&M sector are launching live events and podcasts, creating subscription offerings, producing video for consumers and brands, and expanding e-commerce and product licensing efforts. Today, profitable growth increasingly depends on having five, six, or even more revenue streams - an often fluid portfolio of bets on businesses and products that extend beyond traditional sources of monetization. Gone are the days when TV networks, film studios, or companies of any kind could thrive on one, two, or even three reliable revenue sources. All these developments have significantly disrupted the flow of E&M revenues. The competition for user engagement and spending has never been more brutal. Digital platforms have proliferated, creating more direct and personalized distribution. Content has become more immersive and available on demand. Digitization has permanently reshaped the global entertainment and media (E&M) ecosystem.
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