Challenging times ahead for new media players

There’s no doubt about it. The industry in 2009 will transition to a challenging new digital world despite the weak economy. Media giants will continue to move from traditional content distribution models to content-on-demand. While building new digital revenue streams, they face a dramatic pullback in consumer spending, which means advertising threatens to fall. Will the industry prove resistant to recession?

Entertainment has traditionally been recession proof, but this time around the theatrical experience is competing with the comfort and ease of watching Blu-ray and DVDs at home. Financing will be tighter which means the independent films that do get made, are likely to perform better.

The film industry will have to pull out the stops to keep consumers buying tickets. Stereoscopic 3D, which cannot yet be recreated at home might be a stop-gap measure if consumers are willing to pay more for it. At least a dozen major 3D films are slated to hit the thousands of theatres scheduled to be equipped with 3D capability. The technology looks to become pervasive as studios like DreamWorks Animation will release exclusively in 3D in 2009.

But it will have to stave off competition from the internet. As it is, Hulu.com is offering more professional content - all free and ad-supported. It’s a go-to destination in a library of content from the TV networks and movie studios. Consumers are going to have more free, on-demand entertainment choices than ever before.

Meanwhile, the video game industry and cinema will become more intertwined. Video games are still a hot commodity despite the economic downturn - a growth opportunity media conglomerates are seizing. Viacom will continue to invest in its video game division, which is responsible for the hugely successful Rock Band franchise. Disney is developing its media properties into video games.

Video game makers are sure to take more of their sophisticated story lines to the big screen, shopping video game concepts to studios. As television becomes more interactive and video games become more cinematic, the line between the two is blurring.