Accenture Global Content Study 2008: The Challenge of Change – Media & Entertainment Industry

Across the entire media and entertainment industry, new digital technologies and consumer demands for continuous access to high quality content is challenging traditional ways of doing business. This does not mean that traditional content and media are dead. Far from it. But there’s no denying the pace of change. A generation from now, people will rely on media and information much more than they do today. Cross-platform access to content—anytime, anywhere—will be the norm. As new technologies emerge, providers will adopt them readily. Disruptive players will force their way into the media and entertainment industry.

For the time being, however, “old” and “new” media will ride side-by-side. Each will fuel interest in the other. Digital will continue to enhance the consumer experience, enabling wider and more immediate distribution.

All industries eventually arrive at an inflexion point. The financial services industry had no choice but to embrace electronic trading. The travel industry was forced to accept its consumers shopping online for the best deals. The telecommunications industry had to come to terms with VoIP. Now the media and entertainment industry has reached this point. Companies in this sector know what they must do. And, as ever, there will be no prizes for second place.

The Accenture Global Content Study 2008 examined more than 100 leaders and decision-makers in the media and entertainment industry, spanning television, videogames, film, music, radio, publishing, interactive entertainment and advertising.

Now in its third year, the study canvassed opinions from executives across North America and Europe, gauging their views of where the greatest opportunities and challenges will come from over the next five years.

There is some consensus over how the digital market is evolving, where the opportunities lie and what will drive revenues over the next five years. Consider the following findings from this year’s study:

• About 63 percent of companies are pursuing a multi-platform distribution strategy.
  
  
• More than one-third of companies expect to see significant revenues from social media and user-generated content within three years.
  
  
• About 84 percent of companies expect mobile rich media to become mass market, representing the largest growth opportunity for media and entertainment firms.
  
  
• About 52 percent of those interviewed see digital advertising eclipsing traditional advertising within five years.
  
  

Our study also found that execution challenges appear to be slowing the market. Consider these statistics:

• More than 50 percent of the media executives we spoke to believe they know which capabilities they need to transform their businesses.
  
  
• But 59 percent are less than halfway along their transformational journey and are unprepared to meet the challenges of the digital marketplace.
  
  
• Increasing complexity in the business environment is causing executives to re-evaluate their capabilities.

The media and entertainment industry knows about change. Over the past century, the industry has had to transform and reinvent itself as the result of disruptive technologies—from radio to film, silent to sound, film to television and now, offline to online. During each transition entrenched players have been faced with a single imperative: adapt or risk losing your audience. Inevitably, some entrenched players are unable to make the transition, and thus perish. Others recognize the opportunity and seize it.

The ability to execute effectively will be key to capitalizing on market opportunities. The need to innovate and optimize content, investigate new opportunities and capitalize on new technologies and platforms is a strategic priority. And media and entertainment businesses have to be equipped to seize new channels in an integrated way. In this environment, as our study shows, companies face a number of challenges. As ever, the keys to high performance are speed, flexibility and innovation. But the ways in which companies need to apply these attributes are changing all the time. Effective digital transformation is vital and requires focused execution programs. Media businesses know they have to do this to succeed: the time has come to act on these goals.

Large media organizations that fail to transform during the digital revolution rapidly will miss out on new opportunities for revenue growth. They must focus on the following priorities:

• Executing digital transformation quickly and effectively
• Aggressively pursuing multiplatform distribution.
• Enabling continuous product innovation.
• Aligning existing cost structures with future revenue streams.
• Understanding consumers and delivering to meet their needs.

Further, as they focus on these priorities, companies must also ask themselves the following key questions:

• How prepared is your organization to execute the cultural and technological changes required to support marketplace demands?
  
  
• Is your organization equipped to execute an integrated multiplatform distribution strategy?
  
  
• Are you able to keep up with the rate of change? In which areas might you fall behind?
  
  
• Has your cost structure been fully optimized to enable enough flexibility to pursue new business opportunities?
  
  
• How well do you know your audience? Content aside, do you have the ability to create, enable, and deliver a product or service they want?