Beyond the Hype: How Content and Technology Are Redefining Media The upsurge in social networking has emerged as a potent force for change amongst media and entertainment companies. However, although Web 2.0 is identified as a major source of opportunity, few companies have, as yet, achieved the digital transformation which will be needed to monetize this phenomenon effectively. Accelerating convergence continues to be a fact of life and, for the next five years, new platforms and new ways of delivering content are set to be the greatest drivers of revenue growth. Content continues to be king and, in view of the technological innovation transforming the industry, most companies have already adopted three-screen distribution strategies. These are just some of the insights delivered by the most recent Accenture Global Media Content Survey, which involved interviews with over 110 of the world’s most influential media executives. The Accenture Global Media Content Survey The survey results, presented at the start of this session by Accenture’s Gavin Mann, prompted intense debate amongst a panel of top executives from media and technology companies. The detailed survey findings include the fact that: - Companies believe that Web 2.0 is here to stay. Just 3 percent view it as a passing fad, 25 percent think it is revolutionary and 70 percent think it is still in its evolutionary phase.
- 68 percent of companies expect to be making money from user-generated content within the next three years.
- Ad-supported sponsorship will be the most prevalent business model across all sectors within five years (according to 50 percent of companies).
- Few companies are, however, prepared to monetize social media/user-generated content – on average, across all organizations, digital transformation is less than 40 percent complete.
These findings set the stage, for a fascinating panel debate on the future for the content industry. Key themes included the opportunities and threats that arise from digital transformation – and how best to position oneself in this fast-evolving market, the impact of new channels on content formats and the ways in which companies need to reorient themselves in light of the seismic shift in favor of social networking. Eric Aledort of the Walt Disney Internet Group referred to the challenge facing ‘traditional’ organizations seeking to exploit opportunities in short-form content. The Competitive Content Environment As he pointed out, these large organizations are often not set up to produce this content, which makes it hard for them to compete with ‘lean and mean’ internet start-ups, most of which do not themselves need to worry about union fees and talent fees. For a number of panelists, the diversity and intensity of competition was a core consideration. While most companies still see cross-sector competition as the greatest threat to their businesses, there was a strong focus on the ways in which companies will harness technology to ensure that the breakneck innovation now taking place is planned for, controlled and exploited. As the discussion highlighted, professional content owners should continue to be best positioned to take advantage of the growth in content opportunities. But their dominance is threatened by software/internet companies and, increasingly, by amateur content owners - as Virgin Media’s Ernie Cormier pointed out, nowadays content finds a way of getting to market, one way or another. What are the Best Positioned Distribution Channels? When it came to identifying the distribution channels best placed to capitalize on new growth opportunities, panelists agreed that Mobile/Wireless is likely to be the lead sector. However, the challenge from online (portals, ecommerce and user communities) was keenly recognized. The panelists agreed with the Accenture research finding that consumer readiness is still the greatest barrier for mobile-rich media, with few predicting any imminent mass market uptake for IPTV. Another major challenge, agreed on by all panelists, is that most licensing regimes still do not allow for the mass transfer of content. From the consumer perspective, it’s easy enough to demand content anytime, anywhere and anyhow. But for providers, the delivery mechanisms and legal/licensing issues that need to be overcome are still daunting. Looking Ahead Looking ahead, there was unanimous agreement that the market will be driven as much by the consumer as by the industry itself. All panelists stressed the need for companies to concentrate on understanding consumer behaviors, as well as reacting promptly to their needs. Although large companies will be well-positioned here (having the depth of resources and financial framework needed), smaller more dynamic businesses may be the ones to watch. Sky Italia’s Andrea Zappia pointed to a world where advertising models will change even quicker than media business models. As advertisers start to develop specific advertisements for distribution across specific channels, media businesses will be given some exciting opportunities for monetizing content, provided they are able to deliver the content in the targeted, personalized manner required. Getting "Digital Ready" The critical importance of digital readiness was stressed by all panelists. But they all agreed that getting there represents a major challenge. Infrastructures will need to be optimized to sustain flexibility and responsiveness and substantial investments in network and content will be required. Publishers of content will need to feel confident that they control their own digital databases and ad-placement teams will need to have the capabilities to manage the shift online. Summing up, the survey and panel debate identified three overriding priorities for companies across the convergence value chain planning to move towards high performance. These are: - Aggressively pursue digital transformation.
- Develop multi-channel distribution capabilities.
- Be prepared to learn from others’ successes and failures in the social networking space – being a pioneer is not always the best course.
Presenters: Ernie Cormier
Chief Commercial Officer
Virgin Media Andrea Zappia
Chief Marketing Officer
Sky Italia Eric Aledort
Senior Vice President - Business Development
Walt Disney Internet Group Richard Cottrell
Managing Director—Accenture Digital Media Services
Accenture Digital Media Services Adam Singer
CEO
MCPS-PRS Alliance Gavin Mann
Digital Media Lead—Media & Entertainment
Accenture |