In today’s digital world, media and entertainment companies leverage the power of digital technologies in engaging with customers and provide them numerous channels of consuming information and entertainment
Media and entertainment industry are continuously transforming with new types of content being created, new subscription models in vogue as well as new ways to fund entertainment projects. For consumers as well, what is changing is the way we consume entertainment, the way we share it and the modes in which we pay for it.
At the epicenter of this disruption are a set of digital technologies including Big Data Analytics, Mobile Apps, Artificial Intelligence (AI) and User Experience which are helping media and entertainment enterprises reinvent themselves and provide a wide range of media products for consumers to examine and consume. According to the PwC Global Entertainment & Media Outlook for 2019-23, the revenues for the industry is expected to grow from USD 2.2 trillion to 2.6 trillion in this period.
Transforming the Media and Entertainment with Digital Technologies
In today’s digital world, media and entertainment companies leverage the power of digital technologies in engaging with customers and provide them numerous channels of consuming information and entertainment. This has led to numerous initiatives across the world, which could be summarized as follows:
- Multi-channel Content – Content creators are increasingly engaging with consumers across multiple channels. A clip from a TED talk could be posted on a Facebook page to generate interest, while the complete talk could be hosted on YouTube or TED website. Users could be encouraged to share and comment on the content with relevant hashtags generating more interest (trending views) on social media. A Netflix promo on Twitter could lead a user to watch a web series on Netflix where in the content is curated based on the purpose it serves on a given channel.
- Personalized Content and Advertising – Netflix and Amazon have been using algorithms to understand content preferences of consumers and then tailoring suggested content based on prior consumption behavior. This creates opportunities for curated advertisements and not have advertisements rolled out to the entire audience.
- New Consumption Business Models – Traditionally, media houses sold newspapers and magazines. Now, they are moving to digital subscriptions of online newspapers. When cable television started, the consumer had to purchase the entire range of channels even though they may not be watching them. Now, the advent of digital providers like Amazon Prime or Netflix provide more curated content and advertise based on consumer behavior.
- Smarter Advertising – Media and entertainment companies are leveraging Big Data Analytics and AI to make advertising smarter and not just make traditional product placements. Previous buying history and changing demographic trends are used to make advertising savvy by placing products and services that a consumer is most likely to be interested in and buy. LinkedIn tailors training offering placements based on a person’s professional profile, interests also tie up with other training providers to provide curated content that is relevant and provides professional value.
- Rise of Digital Channel – With the proliferation of smart phones, and other devices like tabs, the opportunities for digital content has been rising continuously. Marketers are observing this trend, and this reflects in the advertising spend; by 2023, it is expected that marketers will spend more than 50% of budgets on digital advertising. This is also reflected in the use of mobile devices in engaging with media and entertainment which has risen from 1.6 hours a day in 2012 to 3.3 hours in 2018.
The key disrupting technologies that are reshaping the way media and entertainment providers are making a difference to citizens are as follows:
- Machine Learning – Machine learning algorithms are used to understand consumer consumptions trends as well as assess impact of changing trends in consumption patterns across demographic groups. Curated content can be pushed on digital platforms based on this analysis. Movie plots are now based on insights from Machine Learning algorithms that help studios predict customer likes and a higher probability to generate revenues and deliver hits.
- AI and Big Data Analytics – AI and Big Data Analytics are crucial differentiators for media and entertainment companies to assess the impact of new business models, analyze effectiveness of advertising spends across multiple channels as well as provide curated content across multiple channels.
- Mobile Apps – Mobile apps are increasingly used to provide content on mobile devices. With the proliferation of smartphones and increasing device usage by consumers, all content providers irrespective of business (LinkedIn) or entertainment (Netflix) or social media (Instagram, Facebook), all have mobile apps. A lot of content is consumed on Mobile Apps and results in revenues from subscriptions.
As is evident from the transformational impact of digital technologies in the digital transformation of media and entertainment, there are key benefits that can be derived as well, including:
- Cost Optimization – Digital channels have helped optimize the cost of advertising. The rising trends of more digital content consumption has led to more advertising spend on digital channels which have reduced the cost of advertising as compared to traditional channels. Big Data Analytics and Machine Learning enable media companies to provide curated advertisements to target consumers that results in more efficient spend of advertising budgets.
- Transparency and Customer Experience –Armed with digital technologies and enhanced customer service capabilities, media and entertainment providers can provide a more transparent and customized experience to customers. Emphasis of user experience design and curated content makes the customer experience richer and increases customer appetite for more content.
- Revenue Models – With customer centricity at its focus, media and entertainment enterprises look to create curated content and provide custom products and services for customers to consume. The rise of digital subscriptions and multiple product bundles has resulted in new revenue streams. The ability to merge multiple data sets and generate insights creates new revenue generating models and opportunities.
Digital transformation in media and entertainment industry is a growing trend worldwide as it is not just a differentiator but a provider of competitive advantage. Yet challenges remain in parts of the industry, for instance the news industry is in decline as there is only a small increase in the number of readers paying for online news. Personalization and curation are key to success and survival for the media and entertainment industry. And personalization is about providing unique experiences to millions of customers which can only happen when 1) you have deep insights of your customer’s interests and changing tastes 2) being nimble and flexible – keep enhancing the content and end-user experience on websites and mobile apps 3) provide compelling content that can be shared by customers using hashtags and links to social media platforms. The rise of crowdfunding option is another disruptor that cannot be ignored anymore—around 16% of crowdfunding is for music, film and other entertainment initiatives.
The author is Data Platform Solutions Lead at the Services Integration Hub in IBM and has written three books