Fear of losing audience to Internet competitors and telcos behind move

Media and entertainment companies are investing in direct consumer engagement technology to drive revenue growth. The move is mostly fuelled by fear of losing their audience to competitors like Internet players and telcos, says a new survey by Accenture.

Released on Jan 20, the fourth annual Global Media Content Survey included over 100 senior leaders and decision-makers in the media and entertainment industry from 17 markets including Singapore, China, India, Australia, the US and the UK. The aim of the survey, which was based on in-depth telephone interviews over the past year, was to identify where industry leaders believe the greatest opportunities and challenges will come from over the next five years.

Accenture is one of the world’s largest management consulting, technology services and outsourcing firms.  

One challenge facing the industry is obtaining consumer data through direct relationships. While most respondents acknowledge that data is “critical”, over half do not believe they are leaders in data collection and a quarter said their ability was “poor”. However, respondents plan to capitalise on their relationships with consumers by developing new offers (77%), shaping content production (71%) and gaining feedback (50%).

Another avenue of growth for the industry is a multi-platform approach to content distribution. Nearly two-thirds of the respondents cited new platforms like mobile devices and gaming consoles as a main source of future revenue growth. Of the platforms available, respondents believe the main sources of growth in the next three years will be mobile and wireless (53%) and online-streaming (44%).

Despite the downturn, 69% said their companies “increased spending in digital supply chains” over the past year. For an overwhelming number of respondents, the most important capability that digital technology offers is “content production and innovation”, followed by “distribution and access management”.

“Revenue growth requires media and entertainment companies to deliver the right quality and genre of content to the right consumers via the right platform,” said Marco Vernocchi, global managing director of Accenture’s Media & Entertainment industry group in a statement on Jan 20.

As a result of their investments, one in three of the companies surveyed is now three-quarters of the way through the transformation from an offline business model to an integrated digital enterprise. This represents a 12-percentage point increase from 2007 and 2008 when only 21% of companies surveyed were digital enterprises. Challenges these companies face in going digital are financial (67%), organisational (66%) and technological (55%).

Vernocchi concludes that while the process is challenging, it is critical that media companies adapt to a more flexible digital enterprise that places the “consumer at its core”.



This article appeared on the Media & Advertising page, The Edge Financial Daily, Feb 4, 2010.