BRINGING
TV TO LIFE VII
CHARTING THE
COURSE TO
SUCCESS
BRINGING
TV TO LIFE VII
CHARTING THE COURSE TO SUCCESS
OVERVIEW
This year’s report, “Charting the Course to Success,” the seventh edition of Accenture’s acclaimed “Bringing TV to Life” series, comes at a time of almost unprecedented disruption and intense competition among a growing array of players in the video industry. There’s a lot keeping digital video providers up at night, including:
NEW PRICING
MODELS FROM DIGITAL DISRUPTORS
RISING COSTS OF CONTENT
CREATING NEW
SERVICES RAPIDLY AND AT SCALE
TRANSFORMING TO BECOME DATA-DRIVEN BUSINESSES
DRIVING
ENGAGEMENT ACROSS DIVERSE DIGITAL PLATFORMS
DIGITAL NATIVES ARE REWRITING
THE RULES OF COMPETITION.
THE RULES OF COMPETITION.
They position themselves as innovators, with platforms that enable other businesses to innovate alongside. Platform economics allows them to enter new markets quickly and at scale, and to monetize original content rapidly. Through their data-driven operating models, they deliver rich and compelling video experiences to consumers.
Incumbent video companies need to attack the digital market in a manner that allows them to continue to grow their traditional business while leveraging their advantages in the new. That means pivoting eventually from the growth curve of their existing business to a new growth curve for the digital era. This strategy can transform the core business to fuel growth while enabling the company to launch new services.
The report provides specific recommendations for two types of providers:
- Content aggregators—organizations that operate a traditional aggregation platform such as a cable company
- Content distributors—organizations that own or acquire content rights such as a programmer or broadcaster
KEY FINDINGS
DIGITAL DISRUPTERS
DISRUPTERS ENJOY SEVERAL ADVANTAGES IN THE MARKETPLACE:
DISRUPTERS ENJOY SEVERAL ADVANTAGES IN THE MARKETPLACE:
ECOSYSTEM POWER:
Digital disrupters position themselves as innovators, with open platforms that enable other businesses to innovate alongside.
Digital disrupters position themselves as innovators, with open platforms that enable other businesses to innovate alongside.
ADJACENT MARKET PLAYS:
Disrupters can operate across industries, aggregated around specific consumer use cases, and into several adjacent markets (retail, search advertising, etc.).
Disrupters can operate across industries, aggregated around specific consumer use cases, and into several adjacent markets (retail, search advertising, etc.).
CASH ADVANTAGE:
Disrupters’ platforms can serve multiple business models economically.
Disrupters’ platforms can serve multiple business models economically.
ORIGINAL CONTENT DIFFERENTIATION AND
GLOBAL MONETIZATION:
Disrupters are investing heavily in content; they increase competition among traditional and internet platforms to succeed with local content.
Disrupters are investing heavily in content; they increase competition among traditional and internet platforms to succeed with local content.
TRADITIONAL INCUMBENTS: CHALLENGES AND OPPORTUNITIES
DISTRIBUTORS:
Distributors are threatened by the shift in consumer behaviors. As customers fragment their media consumption, the channels-to-market of a distributor are also fragmenting. This means that distributors need to figure out how to monetize these audiences.
Distributors are threatened by the shift in consumer behaviors. As customers fragment their media consumption, the channels-to-market of a distributor are also fragmenting. This means that distributors need to figure out how to monetize these audiences.
AGGREGATORS:
Aggregators will need to live up to their name: They must be the easiest and most engaging place to find the content that consumers love across a number of distributors and digital native providers.
Aggregators will need to live up to their name: They must be the easiest and most engaging place to find the content that consumers love across a number of distributors and digital native providers.
Distributors need to focus on driving engagement to increase loyalty. To do so, they should diversify into a number of direct-to-consumer digital businesses, and also increase their understanding of content performance.
Aggregators have a different imperative: They need to deliver the easiest and most engaging experience to increasingly demanding digital video consumers. To achieve this, they should consider two actions: become a more data-driven organization, and use their strong in-home footprint to anchor new business models.
RECOMMENDATIONS:
INCUMBENTS SHOULD USE THEIR STRENGTHS TO LAY FOUNDATIONS FOR THE "NEW" TO DEFEND AND EXTEND VALUE:
ORIGINAL CONTENT PRODUCTION
EDITORIAL VOICE AND BRAND POWER
STRATEGIC USE OF TECHNOLOGY TO AUGMENT CURRENT ADVANTAGES AND BUILD NEW ASSETS
CONTROL OF THE ACCESS POINT— THE HOME FOOTPRINT
NAVIGATION
STRATEGIES
STRATEGIES
Incumbents must navigate an “S-curve,” growing the core while enabling the new. They must eventually “pivot to the new,” making a leap from the growth curve of a traditional business to a new growth curve of a digital business.
-
1TRANSFORM THE COREDrive optimization to fuel growth.
Divest capabilities that are no longer strategic:
AGGREGATORS: logistics and infrastructure for broadcast stream aggregation
DISTRIBUTORS: broadcast equipment and IT for traditional supply chain
Shift investments to more agile platforms that enable a direct relationship with the consumer.
-
2GROW THE CORERelease trapped value to sustain growth.
The importance of data: Use analytics to optimize spending
Leverage usage and consumption data to inform marketing and customer-retention activities:
AGGREGATORS: Draw on data from consumer relationships to tailor and personalize interactions
DISTRIBUTORS: Use data to address niche audiences with a highly curated content offering
Better cooperation between aggregators and distributors: a flow of content, metadata and curation in one direction, matched by a flow of revenue, data and insights in the other
Achieve organic growth through increased distribution
Maximize ad revenue by targeting the individual
-
3SCALE THE NEWRespond to headwinds in legacy by leveraging advantages in new models.
Redefine the business:
AGGREGATORS: Create a platform that allows new business models to be introduced to customers
DISTRIBUTORS: Determine how their content skills can strengthen their relationship with consumers
The investments from growing the core should help create the foundation for building the new
4MAKE THE PIVOTIndustrialize and scale the new business model.
Invest in assets that allow you to make the most of the advantages you already possess as you create new business models
Making models platform-compatible can deliver greater power in the value chain
There needs to be a time when the new business model is embraced, industrialized and scaled:
AGGREGATORS: The pivot is complicated because consumer ARPU may decrease with an expectation that ecosystem revenue will make up for the erosion of revenue
DISTRIBUTORS: The choice is (1) abandon B2C aspirations and only embrace affiliate partnerships with highly innovative content production initiatives, or (2) “double down” so that their operating model is fully informed by their digital channels
LEAD
AUTHORS
AUTHORS
"Bringing TV to Life" series explores the technology and business trends and market drivers that are radically reshaping the video industry. Our perspective reflects our experience with players across the ecosystem and makes use of Accenture’s primary industry surveys. Our series aims to help all the players in this rapidly evolving space to accelerate their journey as high performance businesses.
To read last year’s issue, please visit Bringing TV to Life, Issue VI
Sef Tuma
Managing Director
Accenture Digital Video
James Weeks
Manager
Accenture Digital Video
ACCENTURE DIGITAL VIDEO CONTRIBUTORS
- Simona Buono
- Michael Chapman
- Laura Chittick
- John Maguire
- Craig Mindrum
- Bikash Mishra
- Gemma Moorby
- Shruti Shalini
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All rights reserved.
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High Performance Delivered
are trademarks of Accenture.
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.