Diversification
for Motion picture, video and television programme production activities (ISIC 5911)
The motion picture and television industry is inherently hit-driven, facing significant market obsolescence risk (MD01) and revenue volatility (MD03). Diversification is a natural and necessary strategy to spread risk, leverage valuable IP, and secure new revenue streams in a rapidly evolving media...
Why This Strategy Applies
Entering a new product or market beyond a company's current activities to reduce risk and capture new revenue streams.
GTIAS pillars this strategy draws on — and this industry's average score per pillar
These pillar scores reflect Motion picture, video and television programme production activities's structural characteristics. Higher scores indicate greater complexity or risk — see the full scorecard for all 81 attributes.
Diversification applied to this industry
In the Motion Picture, Video, and Television Programme Production industry, diversification is no longer merely a growth option but a fundamental de-risking imperative. Given high R&D burdens and market obsolescence, actively pursuing multi-platform IP exploitation and varied business models is essential to stabilize revenue and ensure long-term viability.
Monetize Core IP Across Untapped Ancillary Markets
The industry's significant R&D burden (IN05: 4/5) and market obsolescence risk (MD01: 2/5) make relying on initial content release insufficient for ROI. Aggressively exploiting intellectual property (IP) through gaming, merchandise, immersive experiences, and educational content extends its lifecycle and creates resilient, multi-stream revenue.
Establish a dedicated IP monetization task force responsible for identifying and developing at least three distinct non-linear revenue streams for each key IP during the pre-production phase.
Design Modular Content for Multi-Platform Deployment
The highly fragmented distribution channel architecture (MD06: 2/5) and rapid consumption shifts demand content that is not platform-specific. Developing modular stories and assets enables efficient re-versioning for short-form social media, interactive apps, and traditional long-form, mitigating market obsolescence (MD01: 2/5).
Implement a 'platform-agnostic by design' mandate for all new projects, requiring content teams to storyboard and produce assets adaptable for at least three different digital consumption environments.
De-risk Investment via Strategic Co-production Syndicates
The substantial R&D burden (IN05: 4/5) and structural market saturation in domestic markets (MD08: 2/5) necessitate shared financial risk and expanded market reach. International co-productions distribute investment risk (FR03: 4/5 Counterparty Credit) and provide access to diverse audiences, local incentives, and production expertise.
Actively pursue strategic co-production partnerships for a minimum of 40% of future content slate, prioritizing territories with complementary funding mechanisms and audience demographics.
Stabilize Cash Flow Through Specialized Production Services
Content production's inherent revenue volatility, combined with high counterparty credit risk (FR03: 4/5) and hedging ineffectiveness (FR07: 4/5), makes exclusive reliance on content sales precarious. Leveraging specialized in-house capabilities (e.g., VFX, animation, virtual production) to offer services to external clients provides consistent, project-based revenue.
Formally establish and market a dedicated production services division, targeting 15-20% of annual revenue from external contracts to diversify revenue streams and stabilize operational cash flow.
Cultivate Niche Audiences via Proprietary DTC Channels
Navigating structural market saturation (MD08: 2/5) and intense competition requires direct access to loyal audiences. Developing or acquiring niche direct-to-consumer (DTC) platforms allows for proprietary data collection, deeper engagement, and monetization of specific content types that might be underserved by mass-market platforms, leveraging innovation option value (IN03: 3/5).
Initiate feasibility studies for a targeted DTC platform or content vertical, focusing on a specific genre or demographic, with a clear content acquisition and audience engagement strategy to build a subscriber base.
Strategic Overview
In the Motion Picture, Video, and Television Programme Production industry (ISIC 5911), diversification is a critical strategy for mitigating inherent risks associated with high production costs, unpredictable audience demand (MD01), intense competition, and revenue volatility (MD03). Relying on a single content type or distribution channel exposes production companies to significant market and financial risks. Diversification allows entities to explore new product categories, tap into different markets, and leverage existing intellectual property (IP) beyond its initial format, thereby creating more stable and diverse revenue streams.
This strategy is particularly relevant for an industry facing rapid technological shifts (IN02), evolving consumer habits, and structural market saturation (MD08) in traditional segments. By strategically expanding into adjacent or new areas, such as video games, immersive experiences, direct-to-consumer platforms, or specialized production services, companies can reduce their dependence on single 'hit' productions, spread investment risk, and capture new growth opportunities. It requires careful consideration of IP management (MD03), market entry barriers, and the capability to adapt creative and operational processes to new ventures.
4 strategic insights for this industry
IP as the Core Engine for Cross-Media Diversification
The true value in this industry often lies in the intellectual property (IP) — the characters, stories, and universes. Diversification frequently involves extending successful film/TV franchises into video games (e.g., 'Star Wars', 'Marvel' IP games), theme park attractions, merchandise, podcasts, or even live theatrical events. This leverages existing brand equity, diversifies revenue streams (MD03), and mitigates talent/IP valuation erosion (MD01) by creating multiple monetization avenues from a single creative asset.
Platform and Format Diversification Driven by Evolving Consumption
Audience consumption habits are increasingly fragmented across numerous platforms (streaming, social media, interactive apps) and formats (short-form, long-form, episodic, immersive). Diversification means producing content specifically for these new channels, such as short-form series for TikTok/YouTube, interactive narratives, podcasts, or VR/AR experiences. This addresses market obsolescence (MD01) and enables wider audience engagement beyond traditional cinema and linear TV.
Geographic Diversification through Localized Production and Co-productions
Expanding into new international markets by producing localized content or engaging in co-productions is a key diversification strategy. For instance, Netflix has heavily invested in local content in India, Korea, and Latin America. This mitigates risks from saturated domestic markets (MD08), taps into new audience segments, and can leverage international incentives and lower production costs, navigating the global value chain (MD02).
Business Model Diversification into Production Services or Direct-to-Consumer
Beyond creating original content, producers can diversify by offering specialized production services (e.g., studio facilities, VFX work, post-production for third parties) or by moving 'downstream' into distribution via owned or controlled direct-to-consumer (DTC) platforms. This vertical or horizontal expansion mitigates reliance on external distributors (MD06) and provides more control over the value chain (MD05), reducing revenue volatility (MD03).
Prioritized actions for this industry
Establish an Integrated Cross-Media IP Strategy Office
Create a dedicated unit responsible for identifying, developing, and monetizing IP across multiple formats (film, TV, gaming, digital, merchandise). This ensures a holistic approach to IP management, maximizes value extraction (MD03), and fosters consistent brand experiences, mitigating market obsolescence (MD01).
Invest in Digital-First Content & Interactive Experiences
Allocate R&D (IN05) and production resources to develop content specifically tailored for digital platforms, including short-form video, interactive narratives, podcasts, and VR/AR. This captures younger demographics, adapts to evolving consumption habits (MD01), and diversifies distribution channels (MD06) beyond traditional linear models.
Form Strategic International Co-production Partnerships
Actively seek and engage in co-production agreements with international studios and broadcasters. This strategy allows access to new geographical markets (MD02), shares production costs and risks, leverages local talent and cultural insights, and can benefit from international tax incentives, addressing market saturation (MD08).
Explore Niche Direct-to-Consumer (DTC) Platform Development or Acquisition
For companies with a strong content library or specialized genre focus, consider launching or acquiring a niche DTC streaming service. This allows for direct audience relationships, granular data collection, reduced reliance on third-party distributors (MD06), and potentially higher revenue share, addressing platform algorithm dependency.
From quick wins to long-term transformation
- Conduct an internal IP audit to identify under-monetized assets suitable for licensing (e.g., merchandise, mobile games).
- Pilot a short-form content series for social media platforms using existing creative teams.
- Research and identify 2-3 key international markets for potential co-production opportunities.
- Develop a specific video game or interactive experience based on a popular existing franchise.
- Launch a dedicated podcast division or channel for complementary content.
- Enter into 1-2 strategic co-production deals in emerging markets, leveraging local talent.
- Acquire a smaller post-production house to bring services in-house or offer to third parties.
- Establish an independent digital content studio focused on new formats (VR/AR, metaverse experiences).
- Develop or acquire a niche-specific DTC streaming platform.
- Build international production hubs to localize content efficiently across multiple regions.
- Integrate AI/ML tools into content development for new story exploration and character generation.
- Spreading resources too thin across too many new ventures without sufficient focus.
- Lack of expertise in new markets or formats, leading to poor execution and financial losses.
- Diluting core brand identity by diversifying into unrelated or low-quality areas.
- Underestimating the capital investment and marketing required for successful market entry into new segments.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| Revenue Contribution from Diversified Segments | Percentage of total revenue generated from new product lines, markets, or business models. | Achieve 20-30% of total revenue from diversified segments within 5 years. |
| Cross-Platform Audience Engagement Rate | Metrics such as views, watch time, active users, and conversions across different content formats and distribution channels. | Increase cross-platform engagement by 15% year-over-year for key IP. |
| IP Monetization Index | A composite score reflecting the number of distinct revenue streams derived from core IP, and the revenue generated per IP asset. | Increase the index by adding 2 new revenue streams per major IP every 3 years. |
| New Market Entry Success Rate | Percentage of new market entries (geographic or content type) that achieve predefined revenue or audience targets within 2-3 years. | 70% success rate for new market entries. |
Software to support this strategy
These tools are recommended across the strategic actions above. Each has been matched based on the attributes and challenges relevant to Motion picture, video and television programme production activities.
Capsule CRM
10,000+ customers worldwide • Includes Transpond marketing platform
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Cost-effective CRM for growing teams — manage contacts, track deals and pipeline, build customer relationships, and streamline day-to-day work. Paired with Transpond, a dedicated marketing platform for email campaigns and audience management.
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HubSpot
Free forever plan • 288,700+ customers in 135+ countries
Deal intelligence, win/loss analytics, and pipeline data give sales teams the evidence to defend price with ROI proof rather than discounting reactively against commodity competition
All-in-one CRM and go-to-market platform used by 288,700+ businesses across 135+ countries. Connects marketing, sales, service, content, and operations in one system — free forever plan to start, paid tiers to scale.
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Other strategy analyses for Motion picture, video and television programme production activities
Also see: Diversification Framework