Although 2019 has seen further growth in the popularity of subscription video-on-demand (SVoD), the next big thing for the entertainment industry could be a complete game-changer.
The market for video games continues to rise and, as the gamer demographic broadens, those in the TV and SVoD business find themselves increasingly vying for the same eyeballs and viewing time as game developers and publishers. In a letter sent to shareholders earlier this year, one SVoD platform wrote: “We compete with (and lose to) Fortnite more than HBO.”
Whether or not the competition is as direct as that phrase suggests, the overall trend has not gone unnoticed by the major players in both industries.
At an estimated US$138bn in 2018, the global video games market is now bigger than film and music combined, as far as first sales are concerned.
The market is expected to reach US$180bn by 2021, and with games like Grand Theft Auto V capable of generating more than US$800m on launch day, it is not difficult to see why.
Old-fashioned gamer stereotypes are also a thing of the past. Modern gamers are more sophisticated and diverse than ever before. According to research by the Entertainment Software Association, 41% are women (49% on mobile) and the average gamer’s age is 35, with around 13 years of gaming under their belt.
‘Convergence of media’ is a well-trodden phrase, but there is arguably no better example than what we are seeing on the borders between video game and other forms of digital entertainment.
Series like Bandersnatch and heavily narrative-driven games like Naughty Dog’s The Last of Us are blurring the line between games and interactive storytelling. At the same time, online streaming platforms like Twitch, which previously catered exclusively to gamers, are diversifying into more general forms of entertainment including talk shows, live music and unscripted content; while some SVoD companies are considering forays into video game development.
An interesting side-effect of this convergence is its impact on the market for TV-to-game adaptations and vice-versa.
The next generation of major consoles, set to be launched in 2020, are expected to have a stronger focus on emerging technologies such as VR straight out of the box – opening up new opportunities to bring existing TV properties to life. Game developers will look for ways to use the new tech available to them and this will be actively encouraged by the platform owners themselves, as they seek to establish dominance. Their success will also be determined by the content they can offer, which typically leads to a race to secure exclusive rights to properties in the run-up to the platform’s launch – a fact which will be of interest to rights owners.
The wildcard, this time around, is Google. Earlier this year, it announced its first significant venture into the video-gaming space with the launch of Stadia – a subscription-based cloud gaming platform which will allow users to stream high-end games to virtually any device (including a TV) without the need for a console or gaming PC.
Stadia could be for video games what SVoD was for television. If the platform is successful (and there are arguably few companies better placed to achieve this), it could bring a seismic shift to how we create, monetise and consume video games. Crucially, to maximise its prospects as a new entrant, Stadia will no doubt look to fill its library with large quantities of rich and rewarding content, which could include game content based on existing TV properties.
From a legal perspective, there are a few issues to be aware of. Whenever new or emerging technologies are involved, ensuring that the grant of rights is adequately future-proofed is key. Conversely, it is important to consider whether any rights previously granted to other parties could restrict the ability to license a property for new platforms in the future.
It is clear that interactive and video-game rights can be highly valuable, and therefore producers should aim to retain those rights, or participate meaningfully in their exploitation, wherever possible.
If there is one thing to take away, it is that video games are now firmly in the mainstream. While the industry is, in one sense, a competitor for TV and SVoD, its role as a technological pioneer and disruptor is also generating opportunities which might not otherwise exist.
As the saying goes: “a rising tide lifts all boats” but in this case, as the crossover between these industries becomes more evident, the boats may in fact be one and the same.