TLDR:
- Investors are turning away from filmed entertainment and towards sports and AI due to the decline of peak TV.
- Private-equity and venture-capital firms are investing heavily in sports, AI, and live events.
Private-equity and venture-capital investors are shifting their focus away from Hollywood as the era of peak TV comes to an end. A new report by investor Alignment Growth shows that venture funding in media, entertainment, and gaming fell significantly in 2023, with a steeper decline than the overall venture funding market. Similarly, private equity and venture capital investment in movies and entertainment hit a six-year low in 2023.
As a result, investors are now looking towards sports and AI for their next bets. AI companies like Runway are seeing a surge in venture funding, and companies that support live experiences are also attracting investment. Live sports have proven to be a lucrative area, with sports M&A nearly tripling in three years to $27.9 billion in 2023. Startups focused on sports tech and sports betting are also receiving significant funding.
However, these new areas of investment come with specific risks. Labor agreements in the entertainment industry are limiting the adoption of AI, and high ticket prices for live entertainment could impact attendance. Investors are crowding into the space, leading some to focus on companies that cater to specific demographics or communities for live events. International sports teams present opportunities, but investors may face challenges related to different cultures and profitability struggles.
