What Comes Next? Where Momentum Will Take Us All in 2025

On the economic front, technology has now fully leveled the playing field in terms of content production and distribution. In by-gone eras, technical skills and expensive equipment made content production the domain of major studios and independent production companies. Distribution of content required infrastructure and commercial networks, concentrating the power to select what audiences consumed into the hands of a very small community of media execs. 

Today, anyone with a phone and an internet connection can produce and distribute content for everyone. 

You might find this article enlightening.

Hollywood Studios’ Failure to Plan May Be Planning to Fail

The costs of competing on a level playing field might be too high for legacy Studios when technology, and creative tenacity, are finally closing the gap between artists and audiences.

“Free” access to social media for user generated content consumption has changed the spending habits of consumer audiences, which once made up the majority of revenues to the Media & Entertainment industry. Together with access to finance for content production, corporate media had managed to hoover up most of that consumer spend. 

Until now.

While that spend has not declined, exceeding US$1.5 trillion in 2024, emerging direct-to-consumer (D2C) platforms are beginning to eat into the market for content subscriptions.

Advertising spend, however, is approaching an eclipse. Some estimates predict that advertising spend for access to consumer audiences, together with sponsorship deals, will reach US$1 trillion by the end of 2025 and exceed US$1.5 trillion by 2030.

A rapidly increasing proportion of that ad-spend is being directed by both agencies and brands away from established corporate media interests, which own the traditional infrastructure of content delivery, to those that create the content itself. 

This is changing the face of content distribution as media entrepreneurs partner with advertising agencies and brands to directly sponsor popular content creators, converging digital viewership numbers into audiences that dwarf legacy broadcast television, cable and streaming content. The result is an increasing number of D2C, FAST and Web3 platforms effectively competing with traditional, legacy media channels for an increasingly lucrative share of the global ad-spend market.

What the audience wants, learns and thinks have become key to maximising the financial results of marketing efforts behind that rise in ad-spend. 

For a discussion on the political implications of this shift, read:

The Now Literal Reality of a Virtual Age

The US election starkly demonstrates the internet’s power to shape our lives, our world and our future. 

Private Capital

Another long-term trend that reached a tipping point in 2024 is the growth of capital being allocated into the private capital markets by high-net worth individuals, private family offices and sovereign wealth funds.

The private capital markets have grown significantly over the past decade, rising from US$9.7 trillion in assets under management (AUM) in 2012 to US$24.4 trillion at the end of 2023, according to estimates by EY. This trend is set to accelerate significantly from 2025 onwards with as much at 10% CAGR pushing AUM to has high as US$60 trillion by 2032, according to Bain & Co.

To acquire those assets, private equity fund managers alone collectively raised another US$2 trillion in new investment capital since the beginning of 2023, with a record US$2.6 trillion in dry powder in need of companies to invest in right now. 

For some time, private equity fund managers have been increasingly seeking access to quality deals within the Media & Entertainment industry. Increasingly, they have found it difficult to find them. 

For more details on what media investors are experiencing, read:

The 2024 Media Investor Survey

Our inaugural survey of media investors presents crucial insight for both media executives and media entrepreneurs seeking access to smart money. 

This is one reason why so many fund managers have begun to focus on sport as an entry point into the industry.

Read: The Battle of the Balls: Why Sport is Poised to Leave Audiences Breathless

But it is the rise of private credit in 2024 that may begin to turn the tide for the rest of the industry and open content production and emerging D2C media companies to much needed growth capital in 2025. Private credit totalling US$2 trillion was put to use by the end of 2023, according to research from McKinsey & Company. That figure is measured against a total addressable market of US$34 trillion in the United States alone.

One way that asset managers are preparing to consume that market is by targeting the one underlying asset that fuels the Media & Entertainment industry: Royalties. With artists, writers and performers creating new intellectual property rights daily, royalty revenues are suddenly in high demand. 

Read: Why Private Equity is Betting Big on Film Libraries and Music Catalogues

But systematically acquiring those rights across the whole of M&E, including royalty revenues from sports media rights, offers a new capital source that doesn’t include selling shares (and control) to private equity fund managers. In fact, royalties are estimated to be a distinct asset class all its own worth as much as US$2 trillion today and growing, according to Partners Group, 

Addressing that market is a top priority for a number of multi-billion dollar asset managers in 2025.  

For an example, read:

Mubadala Takes Major Stake in LA-Based Silver Rock Financial

Mubadala secures a strategic position in a trending asset class with clear and present benefit to the Media & Entertainment industry, including everything from music, film production and global sports.

The result will be increasing pressure on private equity fund managers and private family offices to invest into the creator economy as emerging media entrepreneurs build viable IP libraries and catalogues.

Read: Where’s the Money? The Rise of Private Family Offices

The Year of the Audience

The availability of growth capital, as either private equity or private credit (or both) to emerging media entrepreneurs within the creator economy is set to accelerate one distinctly new aspect of M&E in 2025.

What the creator economy offers more than financial opportunity to creatives is choice to audiences. Choice is what legacy media companies did not offer consumer audiences. Content consumption was once a passive exercise whereby media executives cultivated captive audiences and dictated what content was available. The only real choice was to change the channel.

That choice has now expanded exponentially, as demonstrated by the ‘cord cutting’ epidemic facing cable television operators globally and the re-direction of advertising spend toward creatives and the audiences they attract. Technology now allows for audiences to engage, provide feedback and build relationships with the content of their choice. This engagement has changed everything. 

Just ask the advertisers.

Going forward, audience engagement will become the only commercial metric that matters. It is also something that legacy media companies are catastrophically ill-equipped to cultivate.

This places audiences in a position once thought impossible; that of decision-makers within the Media & Entertainment industry. As audiences grow into this new role, that all important “knowledge is power” proposition becomes less about who holds the power or how to cheat artists than on who decides what is good, what is authentic and what is true.

In 2025, audiences will take their place as equal partners between media entrepreneurs and professional investors. Expect more content, more artists and a lot more money going around. It’s an easy prediction. 

No crystal ball needed.