It is often said that Big Data is the new oil. For a media industry dependent on advertisers, attention and engagement are the new oxygen. In a world of seemingly infinite choices in content and ways to engage with it, today’s media companies are increasingly under pressure to maintain relevance, audience, and engagement to drive profitable revenue. It is not all gloom though: the digital revolution offers new opportunities, new business models, and deeper connections to audiences, powered by more insights than ever before. The winners will be those companies who build flexible platforms, that allow fast experimentation and rapid evolution as the sands shift.
It is clear that this digital innovation has blurred media and other industry boundaries. It has meant a transition from an older business model that centered on the product to models that focus on fragmented audiences. Traditionally, the media product was pushed through a distribution partner, and the consumer was its receiver at the end of the value chain. Now the consumer is at the center of the value chain, and the shift is from product-centric mass media to a consumer-centric model. With the new models, the content is pulled by the consumer instead of being pushed by the media company and value comes directly from consumer interaction. All of these factors have been disruptions of the older models.
One of the most fundamental technology differences is the emergence of the platform. This trend means that everyone at all stages of media delivery is digitally interconnected. This is a major disrupting force to older business channels. They were poorly equipped to handle a fully connected network of individuals. But today’s media audiences are socially oriented. Communication and instant access are important to them. The hyperconnectivity of a platform meets this need. Audiences congregate on social media and cloud platforms, sharing opinions and preferences.
3 key disruption factors in the media industry
1. New competition
Platforms are being developed from the ground up and by companies that are digital natives by core competency. Their DNA is software; delivery of media content is an extension of this competency. Whether movies, books, music, or news, these platforms are built around the consumer as the central hub of the ecosystem. Companies like Facebook, Pandora, Spotify, Amazon, Netflix, Hulu, Snapchat, and Skyrock have developed features and communities around content. Media is intrinsically a social experience, we like to enjoy and discuss songs, news stories, and films with our friends. These digital-native platforms understand and facilitate that. They constantly invest in new functionality to keep things fresh (think Facebook Live or Periscope) with a fail-fast mindset. This is a stark departure from the longer development times and greater risk adversity seen in companies of the past
2. Smarter consumers demanding new content consumption models
Consumers are demanding much more in all kinds of commerce. They are digitally enabled and ready for immediate access to products and services. Digital innovation has re-imagined all business processes. Flexible access to cloud-stored content is replacing media ownership of that content. Digital subscription and bundling of content are now common.
This creates all new revenue opportunities that can be explored. Media companies can use long-tail content to attract and engage new audience members. With this they can define and attract niche audiences. Furthermore, they now can monetize the content across all platforms. They can bundle content for business to business (B2B) and direct to consumer (D2C) mobile audiences.
Digital capabilities offer real-time visibility. And this visibility is not limited; it reveals everything from sources to the rights to content. Flexible bundling options with solutions for customer engagement and commerce mean that your marketing teams will not be restricted by the technology when they are being creative.
This disruption also creates its own revenue opportunities. A consumer-centric relationship becomes content driven. With knowledge about the audience, this relationship can be leveraged to capture and create value. Entirely new revenue streams can emerge by cross-selling and up-selling to consumers. This is true because you know more about them. And this holds true not only for digital goods, but for additional physical goods, as well. The opportunity exists to drive revenue of static advertising to convert browsing into transactions.
Customer engagement solutions help you create more dynamic campaigns. They allow you to target specific audience segments. They also improve the performance of display ads by driving commerce in your digital channels.
3. Customization and specialization based on audience insights
The combination of many more places and devices to consume content has led to fragmented audiences. Advertising firms like reach and scale, and fragmentation threatens those traditional cornerstones. More importantly, we have the ability to identify, reach, engage, and – above all – demonstrate return on advertising investment to brands that want to reach content viewers.
As we all consume media, we leave a vast audit trail of digital breadcrumbs that, if correctly collected, analyzed, and used for insight, can unlock value and radical opportunities. With respect to advertisers, content creators, distributors, and consumers, these insights can be used to decide what to produce, where to best distribute, how to upsell or cross sell, and, for the consumer, where to find content they want to spend time engaging with. By using this information, the data “owner” can create a picture that is used to target advertising and promotions. Insights into your audience create a knowledge base that grows with each participation – but to do this you have to own that consumer relationship rather than secede it to the distributor.
Digital breadcrumbs include viewing habits, social graphs, social media interactions, and content preferences, and they can be synthesized with other lifestyle data to create a detailed understanding of the “audience of one.” Targeted marketing is directed to individuals based on this profile information and may go beyond pure content into content-enabled commerce for example.
This is the real opportunity in the digital disruption occurring in media
Learn more about disruption in the media industry.