Many segments are at a tipping point where companies must be flexible and innovative to capture new growth streams through emerging business models. For example, in recorded music, labels are reaping big gains in performance rights as streaming becomes the dominant revenue source.
Technological advances, and the new consumer behaviours they enable, are redistributing revenues and competitive advantage along the E&M value chain. In response, E&M businesses are building direct, sustainable relationships with consumers through a relentless focus on user experience.
Technological change is enabling E&M companies to innovate in product offerings, brands and business models around the user experience. We see this in fast-growth segments like virtual reality and e-sports, and in many other segments where data is evolving into a form of currency.
Although there’s a near-perfect correlation between rapid E&M growth and younger populations, content strategies must take account of a multitude of local factors. However, a bigger issue remains content discovery, since companies must penetrate consumers’ personal filtering mechanisms.
Capabilities-driven E&M deals will continue to create new revenue streams and enhance the user experience. In particular, we expect an increase in strategic deals focused on data, analytics and technology innovation.
While companies increasingly operate on a global scale, it remains vital to understand the changes afoot at a local level. And while the impacts of regulation are hard to predict, its effects on E&M are often clear—witness giant streaming and e-commerce companies deciding not to compete directly in China.