Research
Overview
In June-December 2024, Upstart Co-Lab conducted a review of 46 funds making early stage investments in media and entertainment. Insights: Media and Entertainment Funds, looks at the current media and entertainment investment landscape and how investing in media and entertainment can advance impact goals – and suggests what impact investors, media and entertainment funds and foundations can do to address the gaps that exist for impact investing in media and entertainment.
Insights: Media and Entertainment Funds builds on Upstart’s Deep Dive: Social Impact Media (2020) and reflects how the industry has changed over the past 5 years.
Key Findings
There are high quality, impact-aligned opportunities for investment in the media and entertainment industry. The industry is a source of quality jobs employing over 570,000 people in the U.S. in 2023, fostering economic development and job creation. The industry is also prioritizing environmental sustainability and – given the industry size – integrating environmental practices can have a large positive impact. Perhaps most impactful of all, investing in stories with the power to inform, persuade and catalyze societal shifts is another way to advance impact goals.
Despite this alignment, Upstart has not yet identified a media and entertainment fund that prioritizes impact goals, identifies as an impact fund, reports on impact – and is led by an experienced team with deep background in both media and entertainment and venture capital.
- Most funds investing in media and entertainment are affiliated with talent agencies and production studios, and are not focused on impact.
- Most impact funds are not investing in media and entertainment in a focused, consistent way.
- New entrant impact funds focused on media and entertainment lack the industry and investment experience needed to raise and manage a successful fund.
Opportunity and Impact
The media and entertainment industry is attractive to investors:
- It’s big and growing. The global media and entertainment industry was valued at $2.8 trillion in 2023, and is expected to grow to $3.4 trillion by 2028 outpacing overall economic growth.
- It’s profitable. The global performance of media and entertainment companies has meaningfully outpaced that of all companies overall in the past 5 years.
- It bounces back quickly after down markets. While the pandemic led to a sharpest fall in global media and entertainment industry revenue in 21 years, the media and entertainment industry bounced back in 2021 with a global industry growth rate, higher than the global GDP growth rate.
The media and entertainment industry should be attractive to impact investors:
- It is a source of quality jobs. The media and entertainment industry employed 570,000 people in the U.S. in 2023, fostering economic development and job creation. A large proportion of these employees are members of unions, ensuring their access to a living wage, basic benefits and a fair workplace, all requirements of being a “quality job”.
- It is poised to turn green. Given the industry size, integrating environmental practices can have large positive impact; companies like EarthAngel are demonstrating how the active tracking of environmental and social impact can drive change.
- It is a new source of social impact. Investing in stories with the power to inform, persuade and catalyze societal shifts is another way to advance impact goals.
Implications
To respond to the pipeline of media and entertainment opportunities seeking impact capital, we see ways for impact funds, media funds and foundations to take small steps that can add up to something big.
Impact Funds: Learn more about the media and entertainment industry. You can deliver the impact you seek through the media and entertainment industry, across access and inclusion, quality jobs, community development, and environmental sustainability – without compromising on financial returns.
Media and Entertainment Funds: Get intentional about impact. Audiences seek “TV shows and movies that tell stories about underrepresented groups” and that “feature people who look like them”. Responding to this consumer demand can drive financial returns on content investments. For investments in the tools, services and physical infrastructure of media and entertainment, back the businesses that think about workers, community, and the environment.
Foundations: Collaborate and co-invest. The next time you consider investing in media and entertainment, do not do it alone or only partner with other philanthropic institutions. Invite impact funds to invest alongside you, and engage colleagues at the leading media and entertainment funds in your diligence process at a minimum.