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In an Accenture "one-two" punch, a comprehensive global research study into consumption of broadcast media is followed up with an in-depth shareholder value analysis of the broadcast industry.
First, a consumer research study—conducted by Accenture in France, Germany, Italy, Spain, the United Kingdom, United States, Brazil and Mexico—points to important root causes and drivers of industry change. Second, Accenture's proprietary Total Return to Shareholders analysis provides insights about the strategies and business models showing the competitive advantage to major players in the broadcasting and entertainment industry.
Both analyses support the same conclusion: that the marketplace is increasingly favoring digital TV service providers over companies that continue to operate with a traditional, linear broadcasting model. These newer providers understand more deeply today's most important trends, such as people's desires to consume content based on their own schedules, and their interest in enhanced TV services such as on-demand viewing and time shifting. These products are grabbing the attention of consumers—especially those in the most desired demographic segments—and this trend is, in turn, permanently altering the economics of the broadcasting industry.
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According to the Accenture Broadcast Consumer Survey, more than a third of adults across the eight countries studied now watch some TV content via alternative devices such as a mobile phone, PDA or personal computer. As a result, television—which has enjoyed a dominant relationship with consumers for more than 50 years— must find its place in a new world order of entertainment where it is just one of an expanding array of devices and channels through which people choose to consume the content they want.
At the same time, the research points to new possibilities for companies moving into more innovative forms of broadcasting. Consumers are becoming increasingly interested in the benefits offered by enhanced television services.
Analysis points rather starkly to the growing chasm between the future value of digital TV services compared to traditional linear services, which generate little or no premium on the basis of their future strategies. In fact, investors appear to be turning away from many of the more traditional media players—those whose business models have failed to embrace the changing media consumption patterns discussed earlier. The future value of many of these media companies from 2006 to 2007 declined precipitously--from US$51.2 billion to US$4.1 billion with a slight increase in the first half of 2008 to US$6.6 billion.
On the other hand, the leading digital TV services providers (Comcast, BSkyB, Dish, DirecTV, Austar and TimeWarner) generated roughly 70 percent of the industry's future value in 2006. This ratio increased to 95 percent in 2007.
Accenture believes that the players who will succeed in the future broadcasting industry will do so based not on a traditional broadcast model, but on something we can call "broadcast 2.0"—an evolved business model that requires quickly embracing the digital transformation that is at hand—and then understanding the profound implications of the evolution from “audience” to “consumer” and from “programmed content” to "consumer services."
In this context, content remains a key competitive advantage, but the focus shifts from the traditional measurement of audience share to an assessment of consumer reach: getting the right content to the right consumer at the right price and with the right service model. Consumer innovation means putting the consumer at the heart of business strategy, personalizing the consumer experience and adopting a platform neutral approach— or, perhaps more accurately, an approach that embraces all platforms.
Media & Entertaiment, Global Broadcast & Entertainment Industry Lead
Francesco Venturini has more than 10 years of experience working with media and entertainment companies to help them improve their businesses. For the past few years he had specialized in the broadcast segment, which he now leads. Venturini has led numerous large business transformation programs for clients around the globe—both launching new and restructuring existing businesses—with a particular focus on shaping innovative strategies and leveraging technological advances to bring such strategies to operational excellence.
Venturini was supported in creating this study by Egidio Di Alberto, senior manager, and other specialists within our Media & Entertainment group.
December 15, 2008
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