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This is the first part of a two-part series on the digital media industry. In part, we’ll look at what has fueled the rapid growth of the market. In Part 2, we’ll explore how we think the industry will change over the next three to five years and what that means for investors.

Chances are you are reading this article on your mobile, maybe while playing music. Maybe once you finish the article, you might decide to release the latest episode of your favorite TV show (we’re loving Ted Lasso Season 2 right now). And maybe you get home, where you’ll end up sitting down and playing a console game for an hour. Millions of people will do something similar.

This was not the case just ten years ago. Historically, traditional media distributors, such as broadcasters and publishers, have dominated, limited by limited offline space for content. They acted as gatekeepers to distribution, imposing high barriers to entry for independent and smaller-scale content creators.

Today, things have changed. Digital media is everywhere around us, from mobile to game console, and the industry is exploding. The Global digital media market Currently worth $ 293 billion and is expected to reach $ 414 billion by 2025. At a CAGR of 9%, this will significantly exceed overall economic growth, which is expected to be around 4.3% through the end of 2023.

At EQT Growth, we believe that the explosion of digital content is at the heart of an emerging cultural renaissance. Let’s explore what is fueling this.

A tailor-made approach

Throughout the 21st century, advancements in technology and service offerings have enabled people to move from linear programming to on-demand, bespoke consumption. People are also consuming and producing more and more content and experiences online, at home and on the go. And the whole process has become democratized.

Let’s start with on-demand and personalized consumption. Through a combination of design and circumstances, agile consumers are increasingly building their own bundles and content environments, paying directly for unlimited access to all kinds of content previously consumed offline.

An example is the holding company of EQT Growth Its epidemic. The Swedish music technology company has an innovative digital rights model that paves the way for creators – everyone from YouTubers and small businesses to the world’s biggest brands – to use “unrestricted music” in their videos, while simultaneously supporting the musicians she works with. both financially and creatively.

The personal touch

As consumers seize opportunities to tailor their multimedia and entertainment offerings, businesses are also finding better ways to personalize customer experiences. By improving the way they leverage data and usage patterns, platforms can showcase their products to billions of people, rather than audiences of billions. The advantages are clear: a recent McKinsey The study found that companies that implemented personalization achieved 5-15% increases in revenue and 10-30% improvements in the effectiveness of marketing spend.

Life in sound and color

The rise of mobile and video has given consumers greater control over how and when they experience content. Companies, in turn, are adapting their offerings and business models to build around the new services and formats that have emerged.

Take the example of the use of TikTok during the last Olympics. Hours after winning gold, British swimmer Adam Peaty shared the In the wings of his victory on the social media platform for millions of people to watch for free, all simply by filming himself on his cell phone. Compare that to Beijing in 2008, when a behind-the-scenes documentary would have required an entire film crew and not air for days, if not weeks.

Production and consumption for the masses

TikTok, along with many other social media platforms and internet applications, clearly illustrates how traditional barriers to entry into the media industry have been removed. Emerging artists, creators and ordinary citizens enjoy open, instant and, in many cases, free access to a critical mass of users through online platforms.

At the same time, new digital platforms and easy-to-use online and mobile tools greatly facilitate audience production, distribution and monetization. Another example is Freepik. Spanish society puts a creative world at the fingertips of users, providing access to high quality icons, vectors, photos, videos and presentation templates. It transformed the online visual content and graphic design market with its innovative freemium business model and unique content production model, making it the largest freemium provider of digital visual content in the world today. .

Freepik CEO Joaquin Cuenca Abela told us about this change. “While brands and businesses have the channels and platforms to reach and interact directly with their audiences today, they still often lack the expertise and the technical and creative tools to craft their messages in the way that they are. will resonate best with their consumers. The proliferation of out-of-the-box content and easy-to-use content creation tools and publishing platforms enables a new wave of stand-alone content creators (“prosumers”) and helps brands and businesses today to cover that important last mile of content creation. to treat.”

A cultural renaissance

The advent of mobile, video and social platforms has completely revolutionized the media industry. Today, content can be consumed wherever you are, and consumers expect much more control over the content they interact with.

At the same time, niche content creators have been empowered to convert their passions into careers. This gives the average person the ability to distribute their own content, brands and products across a range of dedicated platforms and channels, allowing them to reach and monetize a larger audience while building loyal communities.

This fundamental change is what we call the cultural renaissance. But what does the next decade hold for the digital media industry?

Follow EQT Growth on LinkedIn and Twitter so as not to miss the second part.

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