One Size Does Not Fit All
Since the inception of media to the masses, particularly the advent of tv, we were told what we watched, when we were going to watch it, and where, when, and how we would consume our media. There were Nielsen ratings, which were based on set top boxes of a few thousand people that kept track of what people watched… but that wasn’t very accurate. You didn’t really know if someone was watching or just left the TV on, nor could you tell how engaged your audience was. There was little to no data giving broadcasters insights into their audiences, we just consumed their product as if we were living in a real life Orwellian novel. Netflix, the darling and first born of the digital media revolution, leaped from offering video by mail into the digital world of streaming. By then Netflix has become hardwired into the minds and behaviors of movie fanatics and understood their needs, wants, and frustrations. Netflix’s service of delivering DVD’s to your home by post meant no more late-night runs to Blockbuster. Appointment viewing is still a thing, but it is now set by the consumer.
A digital transformation in the Entertainment & Media (E&M) industry started in the late 1990’s, and today, it’s being increasingly driven by personalization and discoverability of the consumer audience. TV is interesting as it’s not an industry that you can change overnight. It has been, and will continue to be disrupted in pockets. The current disruption is focused in a world where everything now converges on the individual consumer. Media companies stand poised to cater to the masses, not all at once, but separately and individually. The consumer is in control, and more now than ever consumers desire a bespoke experience raising the expectations on media companies worldwide. Audiences are still dissatisfied with their streaming services, specifically with the recommendations being suggested. Even with a coalesced focus on the consumer, there is still plenty of improvement to be made. Understanding the consumer’s appointment viewing habits is just the beginning.
Media is projected to reach rockstar status (pun intended) by 2023. According to research conducted by PwC, revenues for the global E&M industry will steadily rise to a staggering $2.6 trillion (yes, with a T). But that was projected pre-2020 and pre-pandemic. COVID-19 had other plans and threw a plot twist in the mix the likes we haven’t seen since The Pina Colada song. Will AVOD survive? What about the overwhelming choices for SVOD, will consumers choose to continue subscribing to 15 different apps? What happens with the future of production? What are our audiences thinking, feeling? Is User-Generated-Content (UGC) the new norm? Additionally, the rise of 5G connectivity brings new complexities. Businesses are now looking at bundling 5G service with OTT providers. Do they pursue an ad-driven model or a subscription service? The arms race is on in OTT to provide audiences with original content and live sporting events. As one media executive told me, “we’re just holding onto our over-the-air channels for the revenue, but it’s not a growth engine. OTT is where the growth is, over-the-air is for retention and revenues today.” He’s right — more PwC research says by 2023, OTT revenue will jump to 35.4% of global TV subscription revenue. So, how do you make sure your company isn’t left behind and passed by in the stampede to digital? If you can’t beat them, copy them — the best artists steal, but don’t do it in-house, that is usually expensive and messy.
Netflix, like a cockroach, has survived the fragmentation of Over-The-Top TV, the advent and subsequent saturation of Set-Top-Box applications, has navigated around the eddying currents of long-tail online offerings and lastly, has conquered the digital bundled packages of traditional broadcasters. Netflix has enjoyed sitting on its throne for the last decade because of its ability to distribute affordable content to anywhere, anyhow the consumer wanted it. This new movie streaming model was the prescription every movie fanatic needed for their post-Blockbuster era nausea. Now walking to the post for your movie is a thing of the past. Since those early days, Netflix did the unthinkable: They thought about their audience by creating original content and a smooth interface and user-experience. Furthermore, they built analytics IP into their streaming service, but at what cost? Who do they think they are? A distributor? A studio? A technology company? The most successful companies, the ones to survive the media armageddon, are engaging the digital transformation by converging media and technology by integrating vertically, seamlessly. It’s no longer the distribution that makes the most successful streaming services the powerhouses they are — it’s the personalization to their audience, originality of their content, and the depth of their data on each individual viewer. That has become the new standard, the new norm. Content is king, but without relevant distribution and a smooth user experience, it’s rendered useless. So how do media providers compete on the same media playing field as FAANG? Start by understanding your consumer and provide them with the bespoke experience they need. What are your competitors doing? Well, they certainly understand the arms race for greater original content production, and acquisitions certainly haven’t slowed down much. What’s next in the digital transformation of media? Data, intelligence, and the user experience. Mastering the art of collecting and compiling the right data, handling it efficiently, understanding it correctly, and thereby leveraging it to enhance your decision making and optimizing your value chain.
