Entertainment and media (E&M) businesses are continuing to raise their game in operational agility and customer insight, as constant digital innovation becomes the industry’s new licence to operate. Across the world, consumers’ access to E&M content and experiences is being democratised globally by expanding access to the Internet and explosive growth in smart devices. And while traditional, non-digital media will continue to dominate overall E&M spending globally throughout the coming five years, the growth will be in digital.
To harness this growth and turn it into rising digital revenues, E&M companies of all types are evaluating their competitive advantages and seizing their positions in the evolving ecosystem—with the connected consumer at its core. To achieve this successfully, every industry participant will need to invest in constant innovation that encompasses its products and services, its operating and business models and—most importantly—its customer experience, understanding and engagement.
Consumers, who are increasingly connected and calling the shots but also increasingly confused by the blizzard of content offerings and models available to them both legally and sometimes illegally, are driving companies to apply accelerated innovation and agility to understand and meet their needs. Led by the burgeoning middle classes in emerging markets, consumers worldwide will continue to increase their spending on E&M as they migrate towards digital and, increasingly, mobile consumption across an expanding array of devices. The underlying journey is from ‘mass media’ to ‘my media,’ and the E&M companies that successfully accompany consumers along the way will be those that have the speed, flexibility and insight to engage and monetise an ever-more-diverse consumer base by delivering personalised, relevant and, ultimately, indispensable content experiences.
Advertisers, which absolutely must keep pace with the irresistible consumer shift towards ‘my media’ and digital consumption behaviours, will increasingly harness big data to understand, target and engage consumers at an ever-more-personal level. This will require that they generate and apply multi-platform analytics-driven insights into connected consumers’ behaviour, expectations and buying intentions while they use new measurement techniques to ensure relevance and demonstrate returns on ad spend. Rather than enough big data, the biggest challenges will lie in collecting and extracting the small data—the kind that leads to true understanding of consumers’ future behaviour—and striking the right balance between consumers’ desire for relevance and their emotional and regulatory right to personal-data privacy.
Content creators, which are facing the same imperative as advertisers—by having to engage and stay relevant to connected consumers—will adapt to consumers’ changing needs by experimenting and then applying ongoing innovation to content itself and the ways it’s delivered. To understand what content people will pay for and how they want to consume it, content creators will get closer to consumers than ever before, including harnessing social media via the second screen and embracing new business models, windowing/bundling approaches and collaborative partnerships. With compelling content together with the user experience set to remain the key differentiator with consumers and with over-the-top (OTT) technology and telecom entrants racing to acquire the content they need to drive revenues, content companies that combine the right consumer insights, business models and partnerships will be well-placed in the new ecosystem.
Digital distributors, which must meet consumers’ demand for content across multiple devices—whenever and wherever those consumers choose—need the insight and the agility to deliver the right content at the right time, on the right platform and at the right price. Those that get the blend right will be able to resist the pressure towards being a dumb pipe while successfully both accelerating growth in digital revenues and deterring piracy. Of all of the participants in the ecosystem, it is arguably the distributors that face the most daunting array of challenges, such as a blurring of the traditional divide with technology companies, escalating OTT competition, the threat of cord cutting by consumers, intensifying and fragmented regulation, and pressure to invest in bandwidth without the certainty of returns. Again, the winners will be those that innovate and collaborate to deliver the consistent and compelling content experiences demanded by the connected consumer.