Expert Voices: EY Americas media & entertainment leader John Harrison
We're taking a page out of our Axios Pro Climate colleagues' playbook and planning a recurring Expert Voices series. To kick it off, we chatted with John Harrison, who works as EY Americas leader for the media and entertainment sector, about 2022 trends.
Why he matters: Harrison has more than two decades of experience analyzing the sector, including as a managing director at Bank of America Merrill Lynch.
What are three trends that you've found most fascinating this year?
- Metaverse: Nobody really knows how to define it yet. ... The thesis is that video games [are] going to be a critical on-ramp to whatever the metaverse becomes.
- Sports rights for streaming: We've got an auction that kicks off next week in India for cricket. ... Growth is coming from overseas, and if you look at a market like India — where it's a huge population, it's tech-savvy, they access content over their mobile phones, and they're very focused on sports — those rights are highly strategic for streaming platforms.
- Regulatory environment: Whether it's big tech or big media, it seems to be a somewhat more aggressive environment against transactions, and so the strategic logic for consolidation — content, scale, capabilities, access to new markets — all that remains intact and is viable, even with volatility in valuations and a higher cost of capital.
- But I think regulatory uncertainty does throw a little bit of a wrench into the works.
What are you watching for the rest of the year?
- Consumers' financial heath: I think subscription fatigue is real. We're all out of the house now relative to where we were a year ago, and we are learning how to churn and to be more disciplined. So I think, ultimately, the consumer is in control.
- Profitable growth: [Companies] aren't forgetting the cash-flowing linear business that's so important. We're entering into a phase — I don't know how long it's gonna be — of just really disciplined focus on profitable growth, rather than growth at all costs.
- Box office: "Top Gun: Maverick" brought out older demos — boomers, Gen X and older millennials — and that's a great sign. There's a huge slate on tap for the summer and also for the holiday season, so I think there's a tremendous amount of excitement about the return to the theater.
- There's a lot more work still to be done, but I think everyone's feeling better now around the health of the theatrical release market than we were certainly six months ago.