|In the last View, it was autonomous vehicles, this week it’s digital entertainment in part 3 of our Capital Group series on the ten most exciting (and in some cases life-changing) developments they believe will shape our world in a decades time.
Content is king. But the platform is the kingdom.
They say the entertainment of the future will feel more like it’s in the real world and less like something we sit and consume through a screen. We’ll walk into the action, be part of the theatre, and create simultaneously.
Imagine being able to have your favourite band come and perform in your home for your birthday. Or explore a stage from behind the scenes while the actors are performing. The show will go on, and we’ll be in it…
Investment director Brad Barrett believes that in 2030 it will be all about the digital platforms that offer the richest ways to experience entertainment, at the lowest prices as virtual reality grows in leaps and bounds.
The shift to streaming content accelerated in the wake of covid, but it may still be in its earliest stages. Roughly one-third of all content consumption is currently transacted via streaming, but by 2030 I think that’s going to increase to more than 80%.
You have this incredible combination of streaming being both better and cheaper than traditional television, and I don’t see that changing. The network effect can be extremely powerful — the bigger a streaming platform gets, the more it can reinvest in content, which could help lower costs and attract even more users. Due to economies of scale and high barriers to entry, I expect a winner-take-most market structure in the future, and those are the type of companies I want to be invested in.
Similarly, the video game industry will likely continue its explosive growth into the next decade. I also suspect virtual and augmented reality will become more mainstream. As the technology evolves, these may even achieve an experience similar to attending a concert, sporting event or show, but likely at a fraction of the cost.
With all this content streaming directly into our homes one must wonder what innovation traditional businesses such as cinemas will create to remain relevant.