December 02, 2016
Digital Disruptor Learnings
By: Sef Tuma
Amazon, Facebook and Google are redefining the digital video market. They are putting pressure on the future of the media and entertainment (M&E) industry by pushing a new content aggregation and distribution model – “super platforms” - that deliver a wide array of digital services.
While these developments are great for consumers—less cost, more choice and convenience, and no iron-clad pay TV contacts—they threaten traditional content providers (TV and cable networks) and aggregators (cable and telco companies) who lack the infrastructure of a super platform.
What can these providers and aggregators do? It’s about applying the methodology that bests leverage their unique strengths. A successful digital business model should have scale, monetization and personalization. That can mean building a direct business-to-consumer digital service from the ground up, or working with affiliate partners who are already have those digital credentials in place. The clock is ticking though.
Content providers have some distinct advantages in editorial voice and market penetration that can serve them well in the digital realm:
- Work Across Digital Content Aggregators While Maintaining Affiliate Relationships – It will be important to strike mutually beneficial relationships while being flexible to diversify across a number of platforms to better match where the market is going. Add capabilities to provide marketing and advertising across multiple channels and the ability to quickly pivot based on the platform providing the most value.
- Move Fast – Turn to digital platforms that can handle multiple customer loads at scale and at a cost advantage, and agile, continuous delivery-based product engineering to allow new services to be rolled quickly.
- Stay Close to the Consumer – Where possible, strike one-on-one relationships with consumers by leveraging available analytics tools to better cater to their needs while embedding those insights into every touchpoint the consumer engages with.
- Support Multiple Digital Models – No one digital business model will suffice. Be able to quickly launch, test and adjust multiple models that cover the wide variety of old and new customers coming aboard.
The strategies for aggregators that support the content distribution channel still hit on the major themes of scalability, personalization and monetization; leveraging some advantages unique to them:
- New Packaging Models – Repackage traditional content into appropriately priced bundles that offer targeted programming at affordable prices with optimized margins.
- Scaling Up – To main scale with super platforms, aggregators should launch streaming services alongside their traditional distribution channels, or bundling different services from across their business, similar to a triple-play offer.
- Leverage Consumer Insight, Maintain their Trust – Aggregators should use their consumer insight to build stronger consumer relationships in the digital realm and use it as a draw to enable content providers to be profitable on their platforms. The key to maintaining this advantage is to put safeguards in place that protect privacy and security.
- Leverage their Advantage in the Living Room – The living room is still a prized space to own in media and Aggregators have the advantage through consumer premise equipment. They should promote development tools and interfaces that build out this advantage, creating relationships across numerous digital services providers.
The battle for the digital content consumer continues to escalate, but traditional M&E brands are not down for the count. They can still compete or partner with newer, digital entrants if they invest in the appropriate capabilities that take advantage of and extend their current strengths and use those advantages to carve out their place in the digital market.