Top 5 Risks in the Media & Entertainment Supply-Chain

Top 5 Risks and challenges in the Media & Entertainment Supply-Chain

The global entertainment industry is a complex ecosystem, with numerous moving parts working together to deliver captivating content to viewers worldwide. However, within this intricate supply-chain lie several lurking risks that can pose significant challenges for entertainment companies. 

From shifting demand-supply patterns for content and services to changing business models to massive technological disruptions, each factor requires careful consideration by companies to ensure sustained success and growth in the competitive landscape.

Let’s delve into the top five risks in media & entertainment supply-chain.

1. Changing demand-supply conditions

Keeping up with what people want

What’s popular today might not be tomorrow, as people’s tastes in entertainment constantly change. Today’s hit can quickly become tomorrow’s flop as audience tastes shift and are influenced by social trends, different cultures, and even the abundance of content from all over the world.

A few years ago, the visual spectacle of superhero movies were all the rage, but now there’s a shift towards more crafty executions. The days where lack of cohesive elements with uninspired, star-studded guest appearances and mediocre visual effects were inconsequential to a project’s success are long over. 

Failing to anticipate and adapt to such changes can lead to a decline in viewership and revenue. Therefore, being on top of content choices, selections and trends from across the world is becoming more and more critical – not only for content curators but also for the larger, extended supply-chain players. 

The indication of this trend is evident in the recent success of original blockbusters like Barbie, Oppenheimer, Guardians of the Galaxy Vol3 and The Super Mario Bros. Movie, all which have outperformed the reliance on recycled IP franchise connections such as The Flash, Meg 2, Spiderman, Fast X, Shazam! Fury of the Gods,  The Little Mermaid, Indiana Jones and the Dial of Destiny and Transformers – Rise of the Beasts.

The common thread among these hits is that they have all offered something entirely novel for the audiences to experience. The teams involved in the production of these projects have showcased that innovation is crucial in enticing audiences to the theatres.

Effect of viewership changes in supply-chain

Viewership changes have sometimes a sudden and in other cases a slow, prolonged effect on the entertainment value-chain. It can result in certain types of stories and IP being suddenly more valuable but on the other hand, it can disrupt the traditional ways of doing things and traditional revenue sources, business models and partnerships.

In just a few years, the cinema box-office and the television cable-terrestrial businesses have had to contend with shifting sands of demand-supply and business models as those links in the chain have come under severe stress. 

A time-honored rule in storytelling is that an intriguing protagonist must have defects. Drama thrives on conflict, which makes it enthralling. The more obstacles our protagonists face, the more compelling their stories become, and these obstacles include expectations for character development.

Younger audiences are more discerning and perceptive, seeking emotional connections with the characters they encounter. A well-established backstory is now required for contemporary on-screen protagonists, as spectacle alone is no longer enough to engage a binge-friendly audience. Investing in the proper partners to create believable characters is the key to box office success, a nuance that is often overlooked in recent times.

Changing demand-supply conditions

2. Evolving business models

Finding the right approach

Digital platforms have turned the entertainment business upside down and revolutionized the entertainment business models across the value-chain. For B2C companies in broadcasting and streaming, the choice is between ad-supported, transactional or subscription models, each with its own set of challenges and advantages. On the other hand, technological advancements in cloud computing are enabling B2B players in production, post, distribution to expand into new markets and/ or into adjacent upstream or downstream areas of specializations. These shifts have introduced additional complexities in traditional supply-chain formations.
Lately, the Entertainment sector is not insulated from strikes and labor disputes. While demands are negotiated, operations get disrupted, leading to production delays,  financial losses and overall shifts in supply-chain logistics globally.

Streaming services like Netflix started with pure subscription but now offer ad-supported hybrid plans to users. Entertainment companies need to carefully consider which model suits their content and target audience best. A project with A listers might do well on SVOD, whereas high production quality branded content is better suited on AVOD.

The shift towards globalization also means dealing with diverse legal, cultural, and regulatory frameworks, which can complicate partnerships and distribution strategies dramatically.

Evolving business models

3. Choosing the right Partners

Collaboration matters

A mid to high budget production may involve more than a hundred partners across the value-chain, right from development to distribution. Collaboration is intrinsic to the entertainment supply-chain, and selecting the right partners is crucial. 

However, working with inadequate or incompatible players in different countries can result in bottlenecks, delays, and increased costs. Additionally, partnering with companies engaged in unethical practices or embroiled in scandals can severely tarnish a brand’s reputation.

For instance, a production company that’s running behind schedule on one of its projects decides to partner with a new special effects company without conducting thorough due diligence. It’s probable that the studio’s inexperience can lead to delays and budget overruns, causing the movie’s release to be postponed, disappointing both the audience and investors. Selecting reputable and experienced partners can prevent such setbacks.

Choosing the right Partners

4. Navigating different markets

Dealing with unique cultures and rules

Film and entertainment industry professionals face a myriad of challenges when venturing into foreign markets.

Production companies encounter a diverse range of hurdles, from overcoming language barriers and navigating complex legal and regulatory compliances to conducting location scouting, recruiting skilled crew and talent, securing equipment rentals, and carefully considering aspects of political stability and security.

Conversely, distribution companies face their own unique set of obstacles, including adeptly handling cultural sensitivities, combating piracy, coordinating meticulous release schedules, managing public relations, securing optimal screen availability, and strategically responding to social and political factors that influence the market.

Moreover, licensing companies must grapple with distinct challenges, encompassing negotiating licensing restrictions and agreements, ensuring top-notch content localization, complying with stringent copyright laws, managing the intricacies of technical infrastructure and streaming quality, and addressing various complexities inherent to content licensing. Tackling these multifaceted challenges requires the astute decision-making prowess of all stakeholders involved in the production and consumption of content on a global scale.

Navigating different markets

5. Technological Disruption

Keeping up with the latest trends and impacts

Technological advancements have revolutionized content creation and distribution in the entertainment industry but they have also threatened existing businesses in recent days. 

Gaming Engines, Gen-AI, or Deep-Fakes and their impact on VFX, Animation, Virtual Production is one example or take the Gen-AI impact on localization services such as dubbing, subtitling, and captioning! 

Companies will need to be on top of their game to understand how tech disruptions are likely to impact their offerings or their outputs. Staying at the forefront of technological innovation while ensuring seamless integration with existing workflows – are both crucial to ensure relevance in today’s fast market.

Navigate the entertainment industry

Navigating the evolving entertainment supply-chain with Vitrina

To address the above challenges, entertainment leaders can turn to Vitrina, a cutting-edge platform that offers powerful intelligence, global search capabilities, and precise signals, enabling them to spot opportunities and threats with confidence.

Harness powerful intelligence

Vitrina as a platform provides powerful intelligence that goes beyond surface-level data. Armed with such valuable daily intel on new productions, partnerships, collaborations, co-productions, M&A activities as well as new, trending breakthrough innovations inside the supply-chain, entertainment companies can make informed decisions, shaping their content and strategies to cater to the exact needs of their media businesses.

Unleashing global search capabilities

The entertainment industry knows no geographical boundaries, with content crossing borders and captivating audiences worldwide. Vitrina’s global search capabilities empower entertainment leaders to explore new markets, uncover untapped opportunities, and establish international collaborations with ease. 

By identifying potential partners, distributors, or markets, entertainment companies can expand their reach and diversify their revenue streams effectively.

Precision in identifying opportunities and threats

In a dynamic entertainment landscape, timing is everything. Vitrina equips leaders with precise signals that act as early warning systems, detecting both opportunities and threats in real-time. 

Whether it’s a viral content trend, a technological advancement, or a potential competitor, Vitrina enables swift action, allowing entertainment leaders to capitalize on opportunities or proactively address threats before they escalate.

Enhancing supply-chain efficiency

With Vitrina’s integrated approach to supply-chain management, entertainment leaders can streamline operations, reducing bottlenecks and optimizing workflows. By providing a comprehensive view of the entire supply-chain, from content creation to distribution demand to top partnerships/ collaborations, Vitrina enables efficient resource allocation, minimizing waste and maximizing output. This results in a leaner, more agile supply-chain, ready to adapt to market fluctuations and changing demand-supply conditions.

Remove the burden of uncertainty

Vitrina’s comprehensive insights and intelligence liberate entertainment leaders from the burden of uncertainty. By providing a clear picture of the industry’s trajectory, Vitrina enables leaders to focus on fostering innovation and creativity. This newfound clarity allows for bolder, forward-thinking content strategies, paving the way for groundbreaking productions that resonate with global audiences.

Vitrina: Tackle supply chain risks with confidence

The entertainment industry’s supply-chain is a web of interconnected elements, influenced by rapidly changing viewer preferences, technological innovations, and geopolitical complexities. In this challenging landscape, entertainment leaders need a powerful tool to navigate the shifting tides with confidence and precision. Vitrina emerges as the ultimate solution, providing powerful intelligence, global search capabilities, and precise signals to spot opportunities and threats. 

Companies that stay alert to changing viewer preferences, adapt their business models, select the right partners, navigate diverse markets, and embrace technological innovations will find success in this dynamic landscape. Vitrina acts as a valuable tool to guide them on this journey.

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