This article is part of our July series about the state of media and entertainment. Click here for more.
The media and entertainment industry is no stranger to digital disruption. In fact, it was one of the first industries to experience it.
The brands that have made it this far have embraced the opportunity. And plenty more--meaning disruption and opportunity--awaits, according to industry experts.
But let’s get more specific. For this month’s installment of “CMO.com Wants To Know,” we reached out to media and entertainment experts and asked: What is the biggest growth opportunity for media and entertainment companies today?
Here’s what they told us.
Janet Balis, Global Advisory Leader for Media & Entertainment, EY:
For media and entertainment companies, particularly those that have an advertising-supported business model, the imperative is clear: optimize revenue from existing businesses, diversify revenue sources to new business models, and develop a direct-to-customer engine to drive growth.
These three strategies are clear paths to manage through this complex time when creation, distribution, and monetization of content are being fundamentally disrupted. And each strategy requires a deep level of commitment throughout the organization.
At the core, growth strategies require companies to “connect the dots”--within their own organizations and with their external partners in the ecosystem. Data and technology are key to connect the dots across consumers, advertisers, and partners, enabling us to:
- Understand and anticipate consumers’ behaviors and expectations more holistically.
- Inform creativity as we innovate the brand experience itself.
- Consolidate and grow first-party data to drive customer acquisition.
- Monetize audiences as effectively as possible.
- Optimize productivity through a balance of humans and automation.
While data and technology are fundamental to connecting the dots, success also requires a concerted focus on the human aspects of digital transformation. Culture must embrace technology as a key strategy to amplify our productivity and effectiveness. Leaders must enable new ways for people to collaborate and collide across traditional organizational boundaries and silos. And talent must prize the opportunity to leverage creativity and data in tandem to solve problems and drive growth.
Dan Britcher, Industry Lead, Media & Entertainment, Adobe:
The biggest growth opportunity for M&E companies lies in investing in technologies and processes that optimise customer experience (CX). The direct-to-consumer environment has disrupted the business model for the majority of media companies that traditionally based their strategies around content acquisition and linear distribution. As consumers have become hyperconnected, their expectations have increased exponentially. Therefore, media companies not only need to address the complexity of cross-device content distribution, but they also have the capability to build deep insight into their customers in order to deliver personalized, intuitive, and engaging content in real time. Understanding and optimising the user journey across every touch point is critical to media companies being able to evolve and develop multiple new business models and revenue streams.
M&E companies need look no further than the online retail sector to understand how investment in technology and organisational change can deliver this. Data, analytics, and audience segmentation technology, with machine-learning frameworks at the core, are foundational for media companies in addressing the operational issues they face in building profitable and sustainable business in the face of unprecedented disruption.
Mike Chapman, Managing Director and Global Lead of Media & Entertainment Strategy, Accenture Strategy:
The biggest near-term growth opportunity for media and entertainment companies is to fully exploit “intelligent” digital experiences and monetization. While this seems obvious, many incumbents have yet to realize the full value of cultivating digital audiences.
The pace of change increases in digital audience sizes and engagement levels continues to create opportunities for both industry incumbents and digital players. Advertising dollars remain underpenetrated in select digital channels, such as mobile. Capturing a greater share of this spending growth could be accretive--by leveraging premium content assets that M&E companies have developed successfully and targeting audiences more intelligently.
“Self-disrupting” opportunities that challenge current audience experiences, business models, and advertising buy/sell practices-- while catalyzing growth through greater audience engagement across a broader set of platforms, geographies, and monetization models--are the future.
Companies must take more risks around digital growth opportunities that could compete with and potentially cannibalize their legacy businesses to control the migration of audiences and advertisers. Lack of proactivity forces companies to follow in disruptors’ footsteps where they could have potentially led the marketplace. Near-term digital opportunities lie right in front of most companies, and it is just a matter of intentionally reorienting the business to capture them.
Danny Ledger, Principal, Deloitte Digital:
To thrive in today’s evolving direct-to-consumer landscape, media companies should take a customer-centric approach. As deeper customer-driven strategies are adopted, the need for broader capabilities that manage across experiences--to marketing, sales, and service--grows. These capabilities are leveraged throughout the customer’s unique journey, delivering influence through dynamic, personalized treatments at scale--helping increase value through loyalty and retention while supporting agile, evolving business models.
Winning in a customer-centric world typically requires a mastery of four elements working as one connected unit: data, decisioning, delivery, and operations. First, customer data should be aggregated at an enterprise level by creating it, sharing it, or buying it. Then a robust decisioning and business intelligence engine leverages customer data for real-time personalization and content decisions, optimizing return on investments. The decisioning and intelligence engine also triggers the delivery of multichannel messages and content at each journey touch point to help attract, retain, and unlock value from every customer. Finally, the business, technical operations, and service delivery model should be stood up and capable of launching customer journey use cases while sustaining the enabling requirements of data, talent, tools, technology, and content quickly and at scale.
Mark Schweitzer, Partner, CMG Partners:
As major media companies beeline toward OTT platforms, it’s evident that the future of entertainment starts with consumer choice. However, being a successful media and entertainment company doesn’t stop at going direct-to-consumer; it begins there, where demanding audiences expect to be entranced and impressed.
What are they waiting to binge-watch and click on? Premium, marquee-worthy content, the kind that comes from large production budgets. The success of HBONow, CBS All Access, DirectTV Now, and soon Disney builds on the success of premium content.
Despite the intimidatingly expensive and crowded space, niche subscription OTT platforms have popped up in the wake of disruptors like Netflix and Hulu. Film Struck for old movie buffs, Philo for the sports-apathetic, and Hayo for the reality television fanatics are offering smaller, cheaper packages of unique streamable media. What they may come to realize with low subscriber numbers and without buyouts from the big guys is that content is king, and royalty isn’t cheap.