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April 21, 2017
Charting the course to success in the video industry
By: Sef Tuma

We are living in a time of almost unprecedented disruption and intense competition among a growing array of players in the video industry. There’s a lot keeping video providers up at night, including:

  • New pricing models from digital disruptors
  • Rising costs of content
  • Creating new services rapidly and at scale
  • Cultural and organizational barriers to becoming data-driven businesses
  • Maintaining engagement and loyalty across diverse digital platforms

Meeting these challenges and thriving in a digital world is the subject of the seventh edition of Accenture Digital Video’s popular series, “Bringing TV to Life,” entitled “Charting the Course to Success.”

Companies born in the digital era are rewriting the rules of competition in the video industry. The industry as a whole continues to grow materially, yet much of the growth is coming from these digital disrupters, who enjoy several advantages in the marketplace:

  • Ecosystem power: 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.).
  • Cash advantage: 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.

A challenging journey is ahead for traditional players: Content aggregators—organizations that operate a traditional aggregation platform such as a cable company —as well as content distributors, organizations that own or acquire content rights such as a programmer or broadcaster. Both types of companies need to become fully digital, both in how they operate and how they monetize.

These companies are starting to make short-term and long-term moves, both to control their cost base and to maximize their access to the market.

  • 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 traditional distributors and digital native providers. Many aggregators are beginning to look harder at their technology investments to make sure they are structured in a way that helps them compete effectively in a more liquid marketplace.
  • Distributors are threatened by the shift in consumer behaviors. As customers fragment their media consumption, distributors will need to drive higher customer engagement to increase loyalty and revenue per user. This means that they need to figure out how to better understand content performance, launch new direct-to-consumer digital businesses and command a premium on their own advertising inventory.

To attack the digital market in a manner that allows incumbents to grow from their traditional approach while capitalizing on their advantages in the new, digital era, they must navigate what’s commonly referred to as an “S-curve,” growing the core while enabling the new. They must eventually make a leap from the growth curve of a traditional business to a new growth curve of a digital business.

Charting the course to success in the video industry Chart

Incumbents, depending on whether they are distributors or aggregators, have several strengths to leverage:

  • 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
  • Local service capabilities

Companies should use their strengths to lay foundations for the "new" to defend and extend value—to take action in a way that allows their strong core to enable their new direction.

It’s important to deal with both vision and reality—that is, where companies’ money is right now versus later, as well as their ability to disrupt themselves in the midst of organizational and technological legacy, and to deal with disruption while protecting their existing business.

Many of the things incumbents must do might seem counter-intuitive because the actions go against traditional thinking or motivations in their current business model. But it’s the only course to success as companies navigate through digital disruption.

Bringing TV to Life VII: Charting the Course to Success

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