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The future of broadcasting, issue IV: A new era of optimism

Read Accenture’s report about the key trends that are shaping developments in the broadcasting industry and which strategies broadcasters can adopt to drive more growth.

Overview

The broadcasting industry is settling into a new era of cautious optimism. With the global economy showing some signs of improvement, demand for consumer entertainment and advertising is also on the upswing supported by online channels.

Increased M&A activity, easing of regulatory barriers and advancement of broadband capabilities have opened the gate for new, larger, more aggressive competitors to enter the broadcasting ecosystem.

Accenture’s annual value analysis research found that future values have increased threefold since 2012. While this signifies optimism in the broadcasting industry, it also highlights a crucial question: Where will growth come from to justify these lofty future values?

We believe that success will depend on increasing revenues and controlling costs through balanced investments in content, developing innovative approaches to monetizing existing assets, establishing a content-centric operating model that supports flexibility at low cost and optimizing the consumer experience.

Find out how broadcasters can strategize their next move for driving growth for their organization.

Background

Over the past four years, Accenture’s Future of Broadcasting series has tracked the fundamental shift in the broadcasting industry—from an insular environment dominated by a Pay TV business model to a dynamic industry that’s adapted to digital disruption, expanded competition and changing consumer needs.

The fourth edition of the Future of Broadcasting series outlines the findings of our annual broadcasting value analysis, and shares four value creation themes that we believe broadcasters should act on to meet rising market expectations. It also takes into account the challenges along the way.

Key Findings
Our analysis of key players in the global broadcasting industry identified three key trends that are shaping the market:

  • Rapidly increasing market expectations: Multiple factors taken together explain the steep rise in future value. Broadcasters will need to grow their revenues considerably while making significant cost reductions.

  • Balancing operations and investments: Our value analysis saw share price increases for our top performing companies arising from the positive impact of changes to their capital structures. It also established direct correlation between content investment and performance.

  • Blurring of segment boundaries: More and more Pay TV providers are offering FTA services and vice versa. Individual strategies and respective investor responses are stronger determinants of success than any overarching preference for a specific segment. However, segment specific conditions mustn’t be overlooked.

Recommendations

The three industry trends enable us to draw out four value creation themes that broadcasters will need to focus on in order to meet the market’s future value expectations. Understanding consumers and ensuring decision-making is centered on consumer insights will be key to success.

  • Premium and cost-efficient content—Acquire and create premium content to meet the needs of the consumers while balancing investment and driving cost efficiency

  • Consumer optimization—Create customized content to enhance consumer interactions and constantly look for new ways to engage them

  • Converged operating models—Develop agile, nimble and lean operating models that can leverage the power of digital for synching content generation and delivery, optimizing resources and increasing enterprise agility

  • Monetization—Unlock future value from existing assets to increase profits, and look at launching new products and services that address specific market needs