Karan Puri, Corporate VP and Head of Commercial and Consumer Services, HCL Technologies
The global media, publishing and entertainment (MPE) sector is undergoing rapid disruption. Multiple innovative content creation and distribution platforms have upended conventional business models. Digitally empowered customers are seeking personalized content on demand—anytime, anywhere.
The opportunity for MPE companies to achieve sustained and profitable growth is for real, though. According to PricewaterhouseCoopers’2014-2019 Entertainment & Media Outlook, the size of the U.S. MPE market–the largest globally–is expected to expand to $771bn by 2019, from $632bn in 2015.
And, disruptive digital technologies such as mobility, Big Data, cloud computing and social media could play a big role in enabling the industry to diversify revenue streams, boost margins, and enhance customer experience.
Broadcasters today face fierce competition from several nimble over-the-top (OTT) operators, who have pioneered innovative content distribution models. The rapid ‘appification’ of media and entertainment in a direct-to-consumer world means broadcasters must reimagine the way they build and integrate core business processes.
As for the rapidly consolidating publishing segment, major headwinds include the shrinking footprint of physical bookstores, limited production scalability, and suboptimal supply chain flexibility. Meanwhile, the gaming segment is confronting reduced consumer spending on non-discretionary entertainment activities, with increasingly popular online games squeezing traditional revenue streams.
Here are five ways in which MPE companies can grow their customer base, increase profits, and strengthen competitive advantage:
1. Invest in digital technologies
Through proactive adoption of innovative digital technologies, broadcasters can break functional and information silos, and deliver quality content in engaging formats. Automation can be a key enabler, with IP-based networking and content delivery strengthening program creation and distribution mechanisms.
For publishers, offering crisp and interactive content across differentiated, intuitive mobile apps will be crucial. For instance, Cengage Learning, a higher education publisher, provides quizzes and flash cards to customers on mobile devices through its MindTap learning platform. Simultaneously, publishers need to invest in sophisticated rights management systems and commercial rule engines.
Publishers are recognizing the growing correlation between customer experience and brand loyalty in this hyperconnected world
For gaming companies, virtual reality (VR) is likely to emerge as a significant growth driver. By commercializing the hand-held technology, leveraging wearables, and offering holographic slot games, firms could make gaming more immersive.
2. Focus on personalized customer experience
To provision personalized, relevant and unique content for their next-generation subscribers, broadcasters must reimagine existing business processes and IT systems. They can take a cue from Netflix, which has aggressively used advanced data analytics tools to aggregate and mine consumer behavior-related information, for optimizing its content pipeline.
Publishers are also recognizing the growing correlation between customer experience and brand loyalty in this hyperconnected world. For example, Penguin Random House has boosted reader engagement by launching Signature, a website covering interviews, essays and reportage on book-related events. Similarly, publishers could acquire new customers by using rich metadata content that fosters increased discoverability of books and authors, as well as enhanced SEO and social media traction.
Casino operators can delight customers even more by combining social networking features with online gaming. Skill based and fantasy sports games built on platforms like Facebook can attract more audiences, boosting revenue growth.
3. Diversify revenue streams through portfolio innovation
Broadcasters are increasingly experimenting with subscription-based content distribution over the Internet and connected devices, as disruptive digital startups eye their market share and ad revenues. Pay television operators and fellow broadcasters have stepped up efforts to streamline production processes for developing custom content across different formats and devices.
Fledgling publishing ventures, on the other hand, are carving out a niche for themselves by offering not just products but an array of related services. Many firms have also started providing self-publishing platforms for authors to directly interact with readers. Moreover, publishers can extract greater value from a given unit of proprietary content by innovating around their multi-media licensing arrangements. Rovio’s Angry Birds and Marvel’s The Avengers, for example, are available simultaneously as games, books, toys, films, TV programs and apps.
4. Embrace the cloud
Pay TV operators are increasingly leveraging cloud computing to offer their own OTT solutions and multi-screen experiences. Companies have been aggressively using off-premise computing resources to revamp video delivery operating models, and provide rich content across multiple devices. Other innovative use cases on this front include adoption of SaaS-based security solutions such as FilmTrack a content protection offering for tracking assets and governing use terms.
5. Institutionalize data centricity
Publishers, broadcasters and gaming firms must consistently track, and holistically manage, data across the value chain, spanning content creation, production and delivery. Companies need to effectively leverage data analytics tools for generating actionable insights on customer behavior, and accordingly optimize production and cross-channel distribution.
To remain relevant in a rapidly evolving landscape, broadcasters, publishers and gaming firms will have to orchestrate their business processes and systems around customer experience. And, each company will need to figure out–based on its core competencies and business goals–as to which set of digital technologies can facilitate compelling client engagement.