Digitalization and technologization of the entertainment sector is happening at a very fast pace. A fully technological industry is being formed – FunTech. The concept of FunTech has emerged relatively recently and is still an unofficial name for an emerging technological sub-branch of the entertainment industry associated with the offer of non-gaming entertainment content. According to analysts, all technological products that cause positive emotions among users, with the exception of computer games, can be attributed to the FunTech industry. For example, projects of social networks, virtual reality, entertainment mobile applications and even broadcasts of esports competitions. The largest technology companies and startups are becoming participants in the new sub-sector of the entertainment sector.

At the moment, no open research and assessments of the new industry and market have been conducted. Certain segments of the FunTech industry are considered as an integral part of other areas of the entertainment and media sector, some areas may not be included at all (for example, dating services, etc.).

Thus, one of the dynamically developing segments is the direction of video services of various kinds (user video processing services, mobile applications, streaming platforms, etc.). According to the American Association of Motion Picture Companies (Motion Picture Association), the number of subscriptions to video streaming services in 2020 increased by 26%, to 1.1 billion, and the total market volume streaming services – up to $68.8 billion (+19% compared to 2019). Approximately the same estimates are given by PwC. The costs of producing and licensing entertainment content on streaming services in the world by the end of 2020, according to the estimates of the research company Purely Streamonomics, reached $ 220.2 billion (+16.4% compared to 2019). Among the leaders in costs are Walt Disney, Warner Bros. Discovery, Netflix.

Another FunTech segment is dating services. In 2020, the volume of the global online dating market amounted to $ 12 billion. To date, there are about 8 thousand different dating services around the world, including niche ones. According to a study by the analytical company SEMrush, the absolute leader in search engine queries is the dating app Badoo. The second most popular dating service in many countries of the world is Tinder. Separately, it should be noted that developers are constantly introducing new functionality, including entertainment, which attracts millions of new users annually.

Messengers occupy a huge niche. At the same time, services with entertainment microcontent (short videos, pictures, photos, etc.) play an important role.

Esports– another segment of the FunTech industry, is becoming more and more popular. Esports championships are a bright, emotional and high–tech spectacle. According to experts, the views of League of Legends games are ahead of most of the well-known sports leagues. According to Newzoo, the most popular tournament of 2020 on Twitch and the YouTube World Championship League of Legends managed to collect 91.9 million hours of viewing from viewers.

According to a study by Euromonitor International, by the end of 2020, the volume of the world's largest esports markets reached $ 1.6 billion. Sponsors, advertisers and media partnerships are the main drivers of the growth of the sub–segment. Large investors are also interested in this segment. For example, Red Bull, Coca Cola, Comcast, professional sports clubs Golden State Warriors, Houston Rockets, etc.

Separately, it is necessary to focus on the mobile format of entertainment services. According to experts, the share of mobile applications in FunTech accounts for 50 to 70%. The range of entertainment in mobile format is very wide: from watching videos and listening to music albums to self-generating entertainment content. Mobile apps are open to integrating third-party technologies. Augmented reality applications and applications with integrated AI technologies play a special role. Augmented reality technology seems to be more promising for mobile devices, due to the peculiarities of using smartphones. As for AI, FunTech is one of the key areas of application. It is mainly about generating and personalizing content using AI, as well as processing AI data directly on the user's device.

Among the key ways of monetization in the FunTech industry, we can distinguish, first of all, the advertising model. Today, according to analysts, FunTech services are becoming the largest advertising platform. Transactional and subscription models are also gaining popularity – a trend inherent in the entire entertainment industry sector. Users are getting used to paying for content. For example, in 2021, App Annie estimates that users' spending on mobile applications in the world, including entertainment services, reached $135 billion (+25% compared to 2020).

As for the key characteristics of users, non-gaming entertainment applications were initially aimed at teenagers (13-17 years old). But now there is a tendency to expand the age limits of using such products (up to 35 years).