Outlook 2024: Downstream Effects

Four trends shaping the future of media & technology

Welcome to the IPG Media Lab’s 2024 Outlook. Each year, we round up the ideas that excite us for the next few years: new technologies, market forces, and shifts in consumer behavior that are changing the media landscape. Since 2006, the Lab has worked with clients to help them best adapt to disruptive change.

Guided by a forward-thinking perspective, the Lab team explores emerging technologies and their potential to become new media platforms. Our focus on research and strategy enables us to analyze the latest platform developments, understand how they will impact consumers, and advise our clients on how to navigate the disruption they bring. Through a finely tuned vetting process, the team organizes their findings, manages introductions, and recommends these partners to solve client challenges or bring forward new opportunities.

The Outlook is informed by our growing team around the world. While the Lab has been based in New York for years, in 2018 we added Singapore as a second home. Over the past five years, we have expanded our network, with hundreds of team members representing dozens of countries around the world, ready to help our clients find innovative solutions to business challenges no matter where on Earth they might appear. Our Outlook features not only a global perspective, but custom content developed by local teams in each region.

This Outlook is an overview of the trends and topics that we expect to break out in the next few years, why we’re convinced they’re important, and how you should respond. We hope you enjoy it.

Comments, questions, and opportunities to work together are very welcome. Please reach out to Adam@ipglab.com.

Outlook 2024: Downstream Effects

As we settle into the mid-2020’s, the decade is taking on a new character, with the second-order effects of the pandemic starting to play out. Consumer behaviors are shifting and evolving in ways that will mark our current period, distinct and different from what came before and what will come after. These downstream effects help explain the remarkable avoidance of a recession in the US and high consumer confidence, which, as inflation has cooled, has continued to drive new purchasing behaviors and an expanding experience economy. We’re living through the reshaping of daily life and culture for the first time since the rise of the smartphone — new rhythms that will come to define the culture of 2020’s in the future. For this year’s Outlook, we’ll examine those changes that are starting to take root, and predict how they’ll play out over the next few years.

But first, let’s examine a few other major forces that are — or are about to be — impacting consumer behavior. While we spoke about escapism as a driving force in consumer media consumption early on in the pandemic, it’s about to return with a vengeance, as the US and many other countries around the world head into pivotal elections, global authoritarianism continues to surge, and wars rage in multiple regions. Beyond the pressing political anxiety lies the ever-present concern about climate change, as it starts to impact daily life for more and more people worldwide. While consumers want and need to engage with these important issues, they will want more control over how and when they do so, rather than bathe in the firehose of anxiety-inducing notifications and breaking news alerts. And they’ll often be looking for ways to forget about these big, existential problems, even if that’s just for a couple of minutes or hours at a time, as self-care becomes a daily practice once again, this time outside of our early-pandemic cocoons.

Next is the end of the zero interest rate phenomenon (ZIRP). While the most direct effect is a cooling of the housing market in the face of high mortgage rates, the end of ZIRP has downstream effects on almost every industry: Hollywood will produce fewer movies and TV shows, starving the streaming services that are already struggling and driving further consolidation; Silicon Valley will see fewer and more conservative investments in startups, slowing innovation outside of large companies; big tech companies themselves will tighten their belts, rolling back pandemic-era hiring, and trimming “moonshot” big bets; retailers will increase prices, reduce discounts, and crack down on free-and-easy returns. Traditionally, this behavior from major industries and large employers would cause a downturn in consumer confidence, but thus far consumers continue to “YOLO” their way through the roaring 20’s, and show no signs of slowing down.

As AI technology matures beyond its initial hype, the focus shifts from testing and development to practical deployment in everyday products and services. The question arises whether these advanced AI tools will still be recognized as “AI,” given how commonplace previous AI advancements like facial recognition and spell check have become in our daily lives. Regardless, generative AI is a fundamental shift in how software works, and may empower a new class of disruptors to shift the balance of power in tech. That could look like OpenAI leveraging ChatGPT and their GPT Store to challenge Google — not just in their ability to answer consumer questions, but in their business model as well. And it could enable a new abstraction layer above apps and websites, enabling more goal-oriented voice or text interactions. It will also transform media creation, allowing consumers to produce professional-grade content effortlessly, as creation barriers significantly decrease.

We also have our eyes on the rising “Ozempic economy” shorthand for the downstream effects of the new generation of prescription weight-loss drugs that also includes other alternatives coming down the pike. While only 1.7% of Americans used such a drug in 2023, that number is expected to soar as production increases and insurance companies expand coverage. The most immediate impact is being seen in obvious places, like declining sales of snack foods. While it’s currently a mild dip, are grocers and CPG companies prepared for 10% or more of the population to suddenly stop snacking? Even more interesting are the other effects of these drugs, which actually serve to curve addiction and compulsive behaviors across the board. What happens if a large segment of the population stops drinking alcohol (a trend that Gen Z is driving towards as well), or gives up gambling and sports betting, or stops spending on in-app purchases for mobile games? Entire portions of the economy have been built on top of mostly harmless compulsive behavior, but it’s an intriguing thought experiment to consider what happens if those behaviors disappear overnight for a sizable portion of the population. And, taking it one step further, what new vices may emerge if we medicate ourselves out of the traditional ones?

With all of those shifts in mind, let’s consider the downstream effects they’ll have on consumer behavior, looking at how early adopters are evolving as a lens for where mainstream consumers are headed in the next few years.

Life’s New Beat

Perhaps most profound are the shifts that are happening in the rhythms and cycles of our lives, both on the micro level of daily habits and the macro level of the milestones that come to define our lives. These changes are disrupting habits and patterns that had been in place for many decades, as the post-war era solidified into the 40-hour work week, the nuclear family with 2.5 children, and consumer-led milestones like purchasing a home. As the expectations around these tentpoles start to shift, so, too, are our habits around media and tech, increasing the challenges of reaching consumers with the right message at the right time. Indeed, just understanding when it is the “right time” will be difficult.

Let’s begin with work, since that has traditionally been a part of our schedule that most consumers have had little control over. “8 hours for work, 8 hours for rest, and 8 hours for themselves” was an easy to understand compromise when most workers labored in factories or fields, but started to break down in the face of always-on connectivity. And one lasting legacy of the pandemic is the understanding that much knowledge work can happen anywhere, with 71% of knowledge workers remaining hybrid or remote in 2023. While some CEOs have forced a more robust return-to-office, it seems clear that high-performing workers will continue to toe the line, prioritizing in-office time for collaboration and connection, while saving high-focus tasks for home, and coffee-badging when necessary to please management.

This unpredictability of when work happens — which varies greatly by industry, company, and individual — will become a hallmark of the 2020’s. We’re already seeing an increase in afternoon leisure time, as workers compensate for the pandemic-era evening peak of productivity by reclaiming time during the day to relax, exercise, and socialize. And as this flexibility becomes more normalized, we’ll see increased experimentation with other modalities, as a newly resilient labor movement drives towards the four-day work week and polywork.

If changing expectations around work are driving our daily and weekly behaviors to evolve, it’s our attitudes towards the larger milestones in life that may ultimately have the greatest impact on our culture. While Millennials are approximately on track with previous generations in terms of home ownership in the US, you’d never know it from the discourse online. Just as we weathered a “vibe-cession” last year, Millennial and Gen Z’s pessimism about their future may wind up being a defining generational trait, impacting decisions about marriage and child rearing. It also explains why consumer spending is still raging: if home ownership and retirement seem unattainable, it’s easier to justify short-term spending on smaller items and experiences, even high-end luxury goods. This economic pessimism isn’t the only thing driving change, of course, as attitudes towards the nuclear family and parenting evolve to be more accepting of nontraditional family structures. What remains to be seen is what new major life milestones may pop up to replace those that we’ve outgrown as a society.

All of these changes, both on the micro and the macro level, will take many years to settle into new habits and expectations. In the meantime, one of the most immediate applications for AI will be to help manage how, when, and what we communicate to these disparate audiences. While still nascent, already 29% of consumers are open to brands tracking their emotions, and personalizing experiences to their moods. And while our current platforms are not designed with such capabilities in mind, we’re increasingly seeing experimentation with AI-powered abstractions that can offer more proactive, anticipatory interfaces. In the near future, things like this will be baked into our smartphones, helping us navigate our day with the help of a true virtual assistant, who’s aware of our priorities and our mood, managing dozens of apps for us beneath the surface. The companies and brands that offer the most value to our day will be the ones that break through, without the need to calculate when or how to reach us. Instead, our AI-powered devices will deliver a tangible offering of value to the right users, at the right time.

The Remixed City

As our personal rhythms are changing, they’re starting to reshape the wider world around us, with public and semi-public spaces evolving to match our new habits. Retail stores and restaurants are reshaping themselves to fit our new lifestyles, and coming upheavals in mobility and smart city technologies are laying the foundation for a twenty-first century city that looks and works differently than in the past. While hybrid work and new infrastructure technologies may be the most obvious factors driving these shifts, they’re arriving at a time when awareness about housing affordability and anxiety around climate change are peaking, and attempts to address those issues will necessarily be rolled into the forthcoming updates to our public spaces.

Let’s begin with the obvious changes that are coming, as local governments look to diversify downtown city centers to better reflect our hybrid lifestyles, and to ensure that local businesses have foot traffic throughout the week. Many of these initiatives point toward the “15-minute city,” which has recently gained traction on social media. The idea is that everyday needs such as school, work, and everyday shopping and errands should all be a 15-minute walk or bike ride from home — and we’re starting to see cities take steps in that direction. As is typical, a lot of this innovation is starting in smaller cities, with less bureaucracy and more motivation to attract a newly-mobile workforce. Cleveland, Ohio, for example, reimagined a downtown public square and transit hub into an “urban living room,” where people can gather to eat, ice skate, and enjoy outdoor concerts. Such entertainment complexes are becoming more common, as “adult playgrounds” pop up around sports arenas, and social norms around betting and other forms of gambling become more relaxed.

Trends are shifting towards a re-zoning mentality of city planning, allowing homes, offices, entertainment, and retail stores to coexist in close quarters. And it’s sparking a reexamination of our relationship with brick-and-mortar retail in a hybrid world. After decades of focusing on ecommerce, we’re in the midst of a physical retail revival, with 24% of US adults less likely to purchase online from a business without a storefront, and pioneering DTC brands disclosing that opening a physical location in a new market can so much as triple online sales. At the same time, promising technologies are on the cusp of unlocking new forms of retail logistics. After years of speculative demos, Walmart is about to make drone delivery a regular part of its offering in the Dallas area, and after a trial period, expansion to other large exurbs is likely in the next few years. And as autonomous vehicles (AVs) become more of a reality, we’re seeing increasing investment from companies like Kia and Pix to leverage AVs into platforms for popup retail stores, like farmers markets and food trucks. The clear answer is that, for most retail brands, hybrid is now the only correct answer, as it is in many other aspects of modern life.

Of course, innovations in mobility extend beyond the retail space. As cities work to improve their public transit infrastructure and prioritize biking and micro-mobility options, the suburbs and exurbs are on the verge of another kind of revolution, as AVs creep closer to the mainstream. Google’s Waymo division, in particular, seems to be on a winning streak, recently expanding autonomy to low speeds on highways in Arizona, and soon launching on surface streets in Los Angeles. This is how driverless vehicles will come to market: not all at once, but piecemeal, from one locale to the next, until it’s possible in many places, most of the time.

Over time, autonomy will change our cities and suburbs, and will introduce new business models for mobility, including the idea of a mobility super bundle, encompassing multiple modes of transport for one monthly fee. It will also change the media we consume, giving us more time for video content and games. Both of these shifts are driving new entrants into the market, epitomized by Sony’s upcoming vehicle collaboration with Honda, the Afeela, as well as the long-rumored car from Apple. But advances in flying vehicles may make AVs seem quaint, as new entrants to the market like Joby and Hyundai prepare to launch short-range electric flying vehicles. Buoyed by a major investment from Delta, Joby’s air taxis will start to upend our commute to the airport as soon as next year, but it’s not hard to imagine they’ll be fairly common for premium travelers by the end of the decade.

If autonomous cars and flying taxis sound like the future, we’re beginning to see a similar innovation approach applied to the very basics of how we design communities, as non-traditional home builders test the waters of what a modern planned community might look like. For example, the California Forever project in Solano County is hoping to take a Silicon Valley disruptor’s approach on building a planned city from the ground up. While it certainly might be worth burning some billionaire money to give something new a try, they’re facing staunch push-back from locals, highlighting one of the ever-present challenges of such projects. Also interesting is Disney’s Storyliving project, their first foray into residential housing, which is attempting to bring the storied company’s design and hospitality to bear on building a planned community in Rancho Mirage, California.

While both of these projects are in the early stages, yet to be tested by the realities of the market, we believe that by the end of the decade, we’ll see significant investment from many major tech and media companies to revolutionize housing. Together with the changes coming to urban planning and city infrastructure we are modernizing cities to fit the new rhythms and realities of twenty-first century life.

Revenge of the Monoculture

As the micro- and macro-level rhythms of our lives evolve, it’s driving another trend that we’ve been observing since early in the pandemic: the increased importance of unifying cultural events. But far from just being the echo of a desire for togetherness when congregating was difficult and dangerous, this is a trend that’s been slowly building for years. Indeed, while the pandemic may have crystallized this desire for many consumers, it’s really a response to decades of the niche-ification of our media ecosystem. As cord-cutting tipped over into being the norm, and more television content was consumed on-demand, prime time started to look more like the halcyon days of Twitter: even if everyone in your community was tuned in and watching around the same time, there were dozens of parallel communities absorbed in different programming altogether, unaware of the twists in your reality TV group chat or your prestige series cliffhanger.

As all social media platforms reset and reshape themselves in the image of TikTok, they, too, are becoming less about the “social” and more about the “media” — user-generated content platforms that focus first and foremost on serving up entertainment, with a user graph that’s only tangentially related to our actual social connections, if at all. And while we often think about social media and traditional channels like TV separately, they’re increasingly on a collision course. While no one on TikTok is producing anything approaching prestige dramas, as smartphone cameras and editing tools have improved, there’s plenty of UGC that fulfills the same function as the vast majority of televised content: clips akin to reality TV, comedy that’s funnier than any long-form streaming specials, and bizarre slice-of-life content that would put a local news team to shame. And this social content is already starting to get supercharged by generative AI.

The story of the early internet was about zero marginal distribution: how it cost basically nothing to distribute infinite copies of a news article, then a song, then a video, and finally 3D content. This upended the business models of the media industry and reshuffled where value could be created and captured. Today, generative AI is beginning to usher in an era of zero marginal creation, where the resources it takes to produce content will trend towards zero. It will take a long time for AI to be able to generate content that competes with the best cultural products — the songs, movies, and novels that surprise and delight us and reveal common truths about being human. But, again, the vast majority of content that’s consumed every day is far from that, and an AI-backed social platform that can create content that’s truly personalized to our own tastes and moods may be hard to put down.

This near future will just underscore the trend we’re already seeing in media: with a healthy supply of media inventory, which is only about to become infinite, the best way to break through and capture attention is with events — something that’s so unique and timely that audiences opt to tune out of everything else to focus. Of course, this has been true for live sports on television for a long time, and remains the reason those games are keeping plenty of people subscribed to pay TV. But it’s not just sports: last summer’s Barbenheimer phenomenon drove the success of two movies by turning them into a cultural event. Millions of consumers went to the theater not just to see their favorite childhood doll or to learn about the father of the atomic bomb, but to be part of the conversation, to have an opinion on what everyone was talking about.

The key strategy that elevates a piece of media into an event is creating a sense of FOMO — the fear of missing out. For sports, awards shows, and reality TV, that’s accomplished by being live: consumers with even a passing interest in the event are more likely to tune in so that they don’t miss a surprise twist or an excellent play, and they want to experience the heightened emotions of watching with other fans. For media that doesn’t demand to be consumed live, like a movie or a new album, FOMO can be generated by making it seem ubiquitous — even if that’s not the case. Barbie was able to accomplish this by building up to opening weekend with months of brand collaborations, making it seem like everyone was already invested, long before anyone outside the studio had seen the film. And Oppenheimer was able to draft off that popularity to seem almost-as-ubiquitous. And lastly, if all else fails, a tempered exclusivity can heighten feelings of FOMO. This is what drew record crowds to Taylor Swift and Beyoncé’s tours last summer, and the desire to be part of that in-crowd continues to fuel viewings of the concerts on-demand.

While the desire to be part of the “water cooler conversation” has long driven tune-in for TV and movies, everything old is new again, and rediscovering the joys of monoculture may be our salvation from AI. In the near future, when so much of our feeds will be filled with AI-generated content that’s tuned specifically for us, the value of human-created, event-ized media experiences will only grow. And while the hand-crafted nature of these experiences will be a headlining feature, it’s the social connection and feeling of togetherness that participating in these pop culture moments that will keep us coming back for more.

The Expanding Experience Economy

Of course, that drive for connection isn’t limited to digital environments: it’s behind the tsunami of interest and investments in live events and experiences over the past couple of years. In 2023, the experience economy exceeded $110 billion globally, with almost $50 billion of that being spent in the US. This includes live sporting events, the single biggest sector, but also theme parks (the second biggest), as well as concerts, theater, and other live performances. And with over 30% of consumers expecting to spend more on live events this year, the continued growth is outpacing expectations for “revenge spending” after the early days of the pandemic, and giving rise to entirely new types of experiences. While the Taylor Swift and Beyoncé tours captured the bulk of the media attention last year, it only reinforces that the demand for these exclusive, high-end experiences is large and growing. The more interesting developments are happening lower down the stack, as the at-home viewing experience is improving, and a new class of hybrid experiences is popping up to bridge the gap between them.

First, the home experience is in the midst of its first major upgrade in a decade. While many a Swiftie will enjoy watching (or re-watching) the Eras Tour on demand at home in 4k, in a few years that experience will seem quaint, as immersive media starts to become more common. While Meta has been plugging away at increasingly advanced VR headsets for years, Apple’s entry into the space with the Vision Pro is already reshaping the market. Unlike any other technology company, Apple has both the financial and cultural capital to coalesce the ecosystem that’s needed to expand headsets and immersive media use beyond gaming. Their relationships mean that media companies like Disney and Warner were there on launch day, complete with 3D versions of popular films, and that sports leagues and music venues are experimenting with their new Immersive Video format. While the Vision Pro is today a high-end platform for early adopters, the “Pro” in the name signals that more accessible devices are on the way. And Meta, too, will benefit, drafting off this wake of new content for their own, much less expensive devices, expanding the market for immersive content. All told, it will be possible for many consumers to experience a circa 2028 Taylor Swift tour at home in a way that brings it dramatically closer to being there in person. Eventually, spatial computing and AI-powered translation could bring us live experiences at a truly global scale.

Perhaps the most intriguing development is the rapidly evolving “middle class” of the experience economy: true hybrid experiences that combine elements of live events and digital media to create something new entirely. The most prominent example of this is the Sphere in Las Vegas, which gives viewers the experience of immersion without needing to wear a headset. It can be equivalent to virtual reality, while watching a movie, or augmented reality, while watching a live concert with Sphere-powered graphics, but in both cases it offers the distinct benefit of being in a crowd, watching it together. Not only does this intuitively improve fandom-driven events like sports and music, recent scientific studies suggest that it enhances our experience of all kinds of content, heightening our emotions and enhancing our feeling of belonging.

But the Sphere is not alone: events startup Cosm is building Sphere-like immersive venues that will include, among other things, live-streamed sporting events from TNT. While this is clearly a great experience for fans, we’re also interested in how it might change sports marketing, opening the door for dynamic creative or interactive formats designed from the ground up for hybrid experiences. And a collaboration between Industrial Light and Magic and Pophouse Entertainment is doing the same for music, expanding from their successful ABBA: Voyage show in London to a new touring experience starring Kiss. In both cases, the bands are not live, but extremely realistic avatars that show the bands as they were at the peak of their popularity. And the forthcoming Kiss show promises to take the digital effects even further, building on the band’s legendary makeup aesthetic to create immersive graphics that respond to the music and the audience. The technology has gotten so advanced that in Japan, virtual pop star Hatsune Miku has been performing “live” shows for years as an on-stage hologram, and has recently started streaming them to VR headsets for fans at home.

If seeing Taylor Swift live is at one end of the spectrum, and watching her in an immersive headset at home is at the other, hybrid events are creating an exciting new middle class for the experience economy. Brands are also leaning into this space, as Mattel announced their first theme park, opening in Arizona later this year, and Netflix readies their first permanent fan experiences for next year. While these experiences are both smaller than a theme park from Disney or Universal, they have distinctly different aims, focusing on smaller locations with rotating experiences that can keep fans coming back more often and engaging with the IP that is most important at any given moment. This middle class will help support the other poles: for live events, it will allow them to become even higher-end and exclusive, as a good-enough experience becomes more accessible. And the creation of immersive content for live venues will support a pipeline of immersive content which will also be distributed at home. The future is here, and it’s hybrid.

For more insights, follow The Lab on Medium, and subscribe to our newsletter and podcast.

Comments, questions, and opportunities to work together are very welcome. Please reach out to Adam Simon, at adam@ipglab.com.

Contributors

• Adam Simon
• Chad Stoller
• Chelsea Freitas
• Josh Mallalieu
• Katy Geisreiter
• Richard Yao
• Ryan Miller
• Thomas Trudeau