Social media have transformed from communications tools into entertainment hubs, rivalling TV and streaming models
Rethink TV says last decade has seen social media platforms transform from communication tools, with sprinklings of entertainment, into fully-fledged entertainment hubs.
New research from the firm predicts that between this year and 2028, the value of social media video will grow into a $314 billion (€2.877 billion) market in 2028. This will dwarf Pay TV and long-form over-the-top (OTT) platforms, with 280.4 billion hours watched per month.
Early days
The analyst firm reckons the transition is in its early days, with social media helping to fill the power vacuum created by the decline of Pay TV. It was widely expected that the gap would be filled by subscription video on-demand (SVoD), advertising-based video on-demand (AVoD) and free, ad-supported television (FAST) services. This is not the case – see graph below.
Source: Rethink TV, Social Media Video Forecast 2023-2028
Rethink TV forecast that even when excluding YouTube, social media’s ad revenue will grow at 58.5% over the next five years to reach $270.9 billion in 2028, surpassing the expected ad revenues of $123.9 billion generated by long-form OTT platforms and the $135.5 billion from Pay TV.
Video watching is predicted to grow at 90.8%, measured in total monthly active hours, on social media by 2028. This is equivalent to 280.4 billion hours per month. Rethink TV concludes such a huge amount of eyeball means that social media video “is a keystone part of many debates that cut across our industry”.
Industry-affecting
They include issues like codec adoption, the ‘fair contribution’ debate, and ad-targeting capabilities which are massively impacted by the decisions of a handful of social media companies. The report charts a number of key performance indicators, in different regions of the globe, for six of the world’s biggest social media platforms: Facebook, Instagram, Snapchat, TikTok (including China’s Douyin), YouTube and X (formerly Twitter)
Rethink TV finds that video on social media poses a legitimate threat to the distribution of more traditional media and entertainment assets. User-generated content (UGC) has evolved to the point where it can genuinely compete with stalwart unscripted content studios and zeitgeist broadcast events.
More traditional media still has scripted content firmly in its grasp, but this is not by any means guaranteed in the future, especially as technology continues to lower the cost of entry to high-quality production.
User-generated content taking over
“We are already seeing user-generated content slowly working its way up the ranks of long-form OTT platforms. Harvesting content from popular YouTube creators is now seen as a cheap and easy way to spin up a few more FAST channels with readymade content that will instantly attract a dedicated audience.
“Equally, social media platforms seem poised to make some landgrabs in the premium content space, with much of the necessary infrastructure ready to go.”