Accenture Global Content Study 2009: This Time, It's Personal – Media & Entertainment Industry

Under the impact of disruptive technological innovation, the media and entertainment industry is fully embracing the need to change. The shifts under way encompass not just advances in content technologies, but also proliferation of delivery channels, radical changes in digital consumer behavior and profound challenges to established revenue models. And, the competitive landscape is no longer divided between the formerly distinct sectors of the industry; the fight is cross-sector and fierce.

Now to compete and grow, companies in this sector will need to build and leverage capabilities in digital consumer data management to deepen their customer relationships and create more compelling content services. An intimate understanding of the digital consumer, backed by analytics, is a prerequisite for the targeted, personalized, cross-platform content services that will drive future revenue growth.

The first phase of digital transformation involved coming to grips with the new models and technologies of the now “must have” digital supply chain. We are now seeing the start of the next phase, as the industry reshapes its content offerings and business models around the consumer in an escalating battle for hearts, eyes, minds, data and wallets.

Put simply: this time it’s personal.

The Accenture Global Content Study 2009, our fourth annual, surveyed more than 100 senior executives in the media and entertainment industry about the major opportunities and challenges they expect to face during the coming five years. The study includes in-depth interviews with executives from the Americas (34 executives), Europe and the Middle East (28 executives), and Asia (40 executives). Overall, 30 percent of the interviewees are based in the emerging markets.

Our 2009 findings once again synthesize the evolving views of leaders in the content space, including C-level executives across the broadcasting, film, music, gaming, publishing, and portal industries.

This report goes on to draw out some of the principal implications for companies seeking to build digital revenues and exploit growth opportunities.

As it searches for the right digital business models, the media and entertainment industry is striving to reinvent itself. Consider the following findings from this year’s study:

• 39 percent of executives surveyed believe advertising-funded models will predominate in three years’ time.
  
  
• 21 percent see a hybrid mix of ads and various other revenues.
  
  
• 18 percent cited “freemium” blending a basic free ad-funded offering with a premium ad-free version.
  
  
• 22 percent expect to see paid-for models.
  
  

Our findings also highlighted the digital supply chain as a must-have capability for competing in the industry as cross-sector competition intensifies. Consider these statistics:

• Investments in digital transformation increased 10 percent over 2008 and 90 percent of companies with fully digital operations still have an ongoing program to improve their digital capabilities.
  
  
• 65 percent believe the main source of future revenue growth will be new platforms/ways of delivering content.
  
  
• 62 percent rank building and maintaining direct-to-consumer relationships as one of their top three priorities. Only 16 percent still have a “pure” indirect consumer model.
  
  
• 60 percent of executives view the single biggest threat for content creators is now cross-sector competition for consumers.
  
  
• 58 percent see outsourcing as a strategic option for identifying and creating the right partnerships and joint ventures, including with digital supply chain experts, to capitalize fully on the achievements and investments to date.
  
  

The findings from our study underline that three key industry trends, digital transformation, the growing competitive focus on the consumer and the drive to improve customer data management are closely interlinked. As these elements come together in an integrated way, they form the basis for media and entertainment companies to reposition and retool their organizations to grow content revenues and achieve success in the future.

Taking the following steps will help a business position itself for high performance in the industry 

• Build comprehensive consumer capabilities, including consumer data management.
  
  
• Use consumer relationships as the foundation for revenue models.
  
  
• Tackle the cultural and organizational barriers that are impeding innovation.
  
  
• Drive forward implementation and industrialization of digital technologies to realize the full value and cost benefits.
  
  

The companies that understand and tackle major challenges in strategy, people and processes, as well as technology and successfully reshape their digital content offerings and business models around the consumer, will emerge as tomorrow’s high performers.