One of the first things kids learn in school is how to share. Slowly, they decipher when it’s okay to hold on to their favorite toy and when it’s time to let little Suzy have a turn. In the current information age, media businesses are struggling with the same diplomatic dilemma. This time, however, their future depends on it.
When IBM Business Consulting Services released a report last year predicting what characteristics successful media companies will share in the future, it foretold major changes for TV and film entities. Titled Media & Entertainment 2010, the report warns of shifts in technology and consumer consumption habits. Like the music sector, industry and market forces are propelling TV and film companies to become more accepting of business partners, customers and consumers – opening content reserves and formatting, production processes, packaging and sales options – without subjecting the company to increased vulnerability.
While consumers have limited attention, they also want to manage their own entertainment experiences. This trend will be accentuated in the next five years. Consumers have already shown a desire to increase their involvement in media creation, production and distribution, all of which builds on the blogging and basement-produced TV programs we see today.
We need technology to make this work. As consumer budgets for media remain limited and the number of media choices expands, it will continue to be difficult to keep the attention of consumers – but not impossible. Here are four things media companies need to do in the next five years to compete:
Embrace open standards: Give consumers the ability to customize, tailor, change, overdub or repurpose content. This will allow media companies to sell increasingly smaller elements of their content – including music tracks, individual clips or ring tones, and video clips over cell phones – using technology. Open industry accepted standards allow media companies to deliver multiple packages with variable pricing and ‘always on’ customer service.
Begin sophisticated content management and distribution systems: Media companies can’t play in the game if they don’t have their content in digital form. Once there, they will have to manage the content for optimum flexibility and asset value. This means having it digitally stored to include meta tagging, cataloging and content management capability. Open standards access will give consumers the freedom to experience content as they wish.
Use advanced business intelligence and data analytics: This will help you focus on key initiatives, satisfy your customers, and make ongoing evaluations of where there’s value. Media companies need to determine what to do with that intelligence, listen to consumer feedback and create new business models that respond to the data.
Develop a strong ‘Attention Loop’: This concept is based on how we expect customer and consumer experiences to evolve, and how media companies will transform their businesses to serve them, as well as to restructure for the changing media landscape. Consumers will continue to look to trusted brands and innovators for their content.
To really compete in this environment, media companies need to streamline – consolidate overhead, reduce costs and get ready to scale. If you can provide this digital platform, optimize your offerings, and drive direct-to-consumer relationships, then you will be prepared for a fully integrated media future. We define companies that have these characteristics as ‘open,’ because they are open to business partners, open to intermediaries and open to end consumers. Are you open to the future?
Sarah Shortreed is the media and entertainment industry lead for business consulting services at IBM Canada. Shortreed and her team provide strategy and implementation services to IBM’s Canadian clients.