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Taking the PulseRe-examining content, experiences andmonetization in the digital world
I am pleased to welcome you to the executive summaryreport of #pulseofmedia, Accenture’s latest study of themajor trends t...
IntroductionOur industries are in a state of                             In this fast reconfiguring ecosystem,       they’...
Consumers, no longer   beholden to schedules,   tethered to one location   or tied to a screen, are in   charge and at the...
05 Taking the Pulse: re-examining content, experiences and monetization in the digital world
Consumer is King of ContentEmpowered by new tools and                Consumers in charge means big changes                ...
Current business andoperating models arerarely set up for successin this future environment.Fundamental changeswill be nee...
Consumer is King of ContentFrom What’s on? to What’s up?                         Coming up on your schedule               ...
09 Taking the Pulse: re-examining content, experiences and monetization in the digital world
Powering the Digital ExperienceThe screens through which we are           To satisfy consumers and advertisers, media     ...
Delivering the digital experienceof the future will call for new skills,new creative and technologicalcapabilities, backed...
Powering the Digital ExperienceOrchestrating for multiplatform                        businesses will therefore need to ex...
13 Taking the Pulse: re-examining content, experiences and monetization in the digital world
Brave New Business ModelsThe ascent of the consumer requires          Signs of things to come                           pr...
Content moving unstoppably to                                                                                             ...
Brave New Business ModelsContent part of a bigger picture                  their businesses. Google’s core business is    ...
The road ahead...Any one of the trends we describeabove has the power to disrupt and                                      ...
Authors and ContributorsMarco VernocchiRobin MurdochCharlie MarshallBikash MishraKevan YalowitzKit FriendContactsMarco Ver...
About AccentureAccenture is a global management consulting, technology services and outsourcingcompany, with 257,000 peopl...
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  1. 1. Taking the PulseRe-examining content, experiences andmonetization in the digital world
  2. 2. I am pleased to welcome you to the executive summaryreport of #pulseofmedia, Accenture’s latest study of themajor trends that we see shaping the present – and future– of the media and entertainment industry.The developments in digital content, experiences The complexity of this still emerging industryand their monetization are disrupting the status ecosystem is considerable. Our aim in thisquo at a rate and extent we have not seen study is to provide clarity where possible,before. No media or entertainment business but also to raise the key questions that wewill remain untouched by their influence. believe all businesses will need to address asNew technologies, data, tools and applications they navigate their journey to the future. Byare giving the consumer unprecedented control taking the pulse of the industry today we areand influence over the content they choose not claiming to provide an exact prognosis.to consume, along with how, when and Rather, we’re seeking to raise critical questionswhere they do so. and provoke the debates that leaders in media and entertainment will need to engage inInnovation in devices, platforms and delivery as they re-examine and shape their agendais shaping new ways of doing business. In this for the future.executive summary and in other materials onthe #pulseofmedia site, we give our views on On the site, you will be also able to find thewhat this means for players in the industry. views of industry disruptors, commentators andBy examining the changes we see taking place, operators. I hope you will join in the debate.we hope to provide a fresh perspective of howbusiness and operating models will need torespond and change to accommodate them. Marco Vernocchi Global Managing Director, Accenture Media & Entertainment Taking the Pulse: re-examining content, experiences and monetization in the digital world 02
  3. 3. IntroductionOur industries are in a state of In this fast reconfiguring ecosystem, they’ll need to work in new ways.continual transformation. New consumers have become creators. Experimentation and testing of newconnections and relationships create Passive consumption has become approaches will become part of businesssignificant disruption. What used active participation. Mass media has as usual. Hybrid business and operatingto be the linear progression of content become personal. As established norms models will be tested and adapted asfrom creator to consumer is now a are overhauled, traditional and non- market needs shift. Legacies may bemore complex web of interactions. traditional media and entertainment in danger as past success will be noThe rules of the game are being companies alike are adjusting and guarantee of future performance.changed by new forms of digital preparing for a consumer-driven,content, easy-to-use creation and social-veined, ultra-personalized future. This report takes a look at someediting tools, and integration across And those that aren’t, should be. of the major developments drivingand between devices and screens. change. We examine how these mayConsumers, no longer beholden to As businesses develop their strategies, impact media and entertainmentschedules, tethered to one location or using yesterday’s version of the content businesses and suggest the criticaltied to a screen, are in charge and at value chain will not help. Rather issues all companies – establishedthe center of everything. than just focusing on distinct core and new entrants – will need to capabilities, businesses will need to address as they develop their understand the interplay of a broad strategies for the future. range of creative, commercial and technological skills. To create value03 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  4. 4. Consumers, no longer beholden to schedules, tethered to one location or tied to a screen, are in charge and at the center of everything.Taking the Pulse: re-examining content, experiences and monetization in the digital world 04
  5. 5. 05 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  6. 6. Consumer is King of ContentEmpowered by new tools and Consumers in charge means big changes I’m in charge here Technology that was a decade or so agotechnologies, consumers are taking for traditional media and entertainment What were channels with fixed, centrally- available only to professional studios is nowcontrol. They are creating their own businesses. Those that have to date controlled controlled schedules will become looser and within easy reach of millions of consumers. what, how, where and when content is available High definition video cameras can be boughtnew digital experiences across channels more flexible collections of content that can now need to put the consumer at the center be accessed according to each consumer’s for less than $300, many laptops and tabletsand devices, planning their own as they rethink their business and operating come pre-loaded with sophisticated videoentertainment schedules, and finding personal preferences. Music services such as models. It’s a move that takes businesses Spotify, Pandora and Rdio show the way by editing tools and the internet, with its nownew ways to interact with content closer to a retail mindset than traditional media ubiquitous social layer, has made distribution giving consumers access to a vast databaseitself. They are at the heart of the approaches. IP-based technology enables two- to millions of people as simple as pressing a of music from which they can variously makenew waves of the industry, from the way communications, measurement and better and share playlists as well as listen to ‘stations’ button to upload. New tools are also making itrapid global rise of mold-breaking personalization than ever before. The limitations generated by individuals’ listening habits and easy to make money. Vimeo, for example, has anew brands, to the transformation that both shaped and constrained the media preferences. In video, Netflix and Amazon feature called Tip Jar that allows its membersimperatives of the corporations that industry as it exists today are disappearing fast. learn from previous behavior and purchases to add buttons to their uploaded content Advertising and subscription models are changing. that enable viewers to donate any amounthave long controlled media. and recommend similar titles, enabling And new technology capabilities and skill-sets consumers to discover new content suited between $0.99 and $5001. A quick glance at are called for. to their preferences. the recent publishing best-seller lists shows the commercial potential of amateurs turning into While unencumbered by legacy technology Consumers are doing it for themselves professionals. Fifty Shades of Grey started as a and ideals, newer innovative arrivals to the fan-site, and a self-published novel on the web. The top end of today’s ‘user-generated content’ media and entertainment industry also need to With the help of social media acting as will become simply ‘content’ and compete with be aware of the implications of a consumer- ‘word-of-mouth’, it has become one of the everything else for share of mind. The rise of centric model. Naturally, they’ll need to keep fastest selling books of all time2. ‘prosumer’ content, empowered by increasingly innovating. But they also need to ensure sophisticated, low cost technology, means that they invest in content – keeping it fresh, that some more easy-to-replicate professional original and high quality – to hold consumers’ content, such as news, reality TV, some attention in the face of constantly emerging, factual and minor sports programming, ever more innovative competition. And as will be threatened. they pursue profitable growth, they also need to keep in mind their responsibilities to maintain standards, monitoring and preventing inappropriate content and illegal activity on their platforms. Taking the Pulse: re-examining content, experiences and monetization in the digital world 06
  7. 7. Current business andoperating models arerarely set up for successin this future environment.Fundamental changeswill be needed.07 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  8. 8. Consumer is King of ContentFrom What’s on? to What’s up? Coming up on your schedule Given the tremendous range of content What does that mean for you?Current business and operating models are rarely Linear scheduling will not disappear, but it available to consumers via integrated contentset up for success in this future environment. will need to find a new role alongside other services, tracking and understanding consumer What is the right blend ofFundamental changes will be needed. Channels over-the-top, time-shifted and on-demand preferences will become a critical capability professional curation, algorithms,and aggregators will need to find ways to blend content. Consumers will be able to create for content providers. Much as leading and consumer tools to deliver aprofessional curating activities with the tools for their own playlists that include scheduled and retailers create unique offers for their relevant content service?consumers to create their own schedules. This selected content from a variety of other sources. customers according to shopping habits, so media businesses will need to become How can content companies deliverwill require changes in the way that technologies Successful brands will guide them. They’ll adept at creating personal schedules to mixed schedules offering linear andand rights are managed, finding new ways to provide them with tools and algorithmically- maintain their relevance to consumers. on-demand content?offer flexibility while maintaining (and seeking driven services that enable them to discover Accordingly, scheduling will move fromto increase) revenues. Channel brands – and new content and integrate those choices with How should analytics and algorithms predominantly an art to much more of atechnologies – will emerge that enable all these scheduled items. be used to drive consumption and science. The use of sophisticated consumerto happen, blending curated, prosumer and better commissioning of content?premium content. These brands will become The launch of services such as YouView in the data could become much more importantvenues for digital experiences rather than a UK, and YouTube Leanback globally, also offer for gathering the information that will drive Should traditional media and contentlinear conduit for simple, passive consumption possible signposts to the future. YouView is content commissioning choices. companies reinvent themselves asof scheduled content. Their success will depend an Internet TV service that combines the UK’s consumer businesses?on the rich data-based algorithms and tools they digital free-to-air channels with on-demand What are the ‘platforms of the future’employ to empower consumer choice. content in a seamless experience, delivered that will enable a consumer-driven world? without a subscription. In other words, it allowsWe asked US and UK online consumers how they consumers to mix scheduled and time-shiftedwould most like to discover new video content with on-demand content within a singleand the results were revealing. Far from wanting interface. Powered by data on user behaviorprofessional recommendations, a clearer picture and preferences, YouTube’s Leanback experienceis emerging of the desire to be better understood combines on-demand viewing in a personalizedas individuals and have content recommended sequential play list structure.based on past behavior3. Taking the Pulse: re-examining content, experiences and monetization in the digital world 08
  9. 9. 09 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  10. 10. Powering the Digital ExperienceThe screens through which we are To satisfy consumers and advertisers, media A new dawn for the TV screen Here, there, everywhereaccustomed to consuming our businesses have to create a compelling presence The shift from simple mobile devices But the TV won’t be the only screen. Theentertainment experiences are on and across all screens, from TV to tablet and to multifunctional smartphones has simultaneous use of more than one screen is beyond. They’ll need to orchestrate contentchanging fast. Content, communication, revolutionized what consumers do with far from unusual today. According to Accenture and services to deliver multiscreen digital the devices they carry with them. The same research, more than 40 percent of US viewersinteraction and gaming are all colliding experiences. That means baking in, rather thanon the same screens – with an magnitude of change is about to happen to already engage with their smartphones or tablets adding on, a multiplatform approach to the the TV. Smart, connected devices will enable when watching TV4. And the trend is set toexpectation of being able to move entire creative process from start to finish. so much more than simply viewing – they’ll accelerate rapidly. As it does, it will make greaterfrom one screen to another seamlessly. be the focal point for digital experiences and demands on media businesses. Content acrossThe very nature of competition on To deliver new experiences, fluency in communication in the home. For example, screens will not only need to be complementarythese screens is evolving. Broadcasters, technology will become as important as while today reliable video conferencing but it will also have to be device-relevant andfor example, will need to worry not broadcast, publishing, or entertainment is largely confined to business, the same differentiated according to use. Shrinking-to-fitonly about what rival broadcasters are content know-how. Over-the-top, or IP-based, technology will soon start to appear in homes won’t be enough to grab and maintain consumer technology will become the new normal formaking available on screen but what - and that’s just one of the ways connectivity attention. Gaming and social media will become content delivery. Media and entertainment and TV will combine to create far-reaching an integral element of delivering compelling andother forms of ‘screen experience’ will businesses will therefore need to develop or change. Cloud-based services, higher immersive digital experiences. Media companiescompete for their customers. What acquire the technology skills they lack – andhappens, for example, when high bandwidth connectivity and the integrated will need to be fluent in the technology that know where to find the right partnerships, use of different devices are set to transform enables these experiences.definition video calling is a normal collaborations or acquisitions to do so. the role that the biggest screen in thefeature of the TV screen? household plays – becoming the anchor Innovative digital delivery platforms have point for digital experiences. made a huge impact across the industry. But they haven’t had it all their own way. Content owners – particularly in video – have retained significant control. Innovators will need to collaborate effectively with content owners, recognizing their mutual dependency. Taking Media 2016: Rethinking content, experiences and monetization in the digital world 10 the Pulse: re-examining 05
  11. 11. Delivering the digital experienceof the future will call for new skills,new creative and technologicalcapabilities, backed up by neworganizational approaches.11 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  12. 12. Powering the Digital ExperienceOrchestrating for multiplatform businesses will therefore need to explore new What does that mean for you?Delivering the digital experience of the future will solutions – that compress or stream video datacall for new skills, new creative and technological in new ways – to maintain acceptable services What new forms of creativity are needed to powercapabilities, backed up by new organizational over constrained networks. multiplatform experiences?approaches. They’ll need to work across multiple Again, experimentation and testing will How should media businesses distinguish core and non-coreplatforms, in novel ways that will demand become a central element of developing technologies and manage them appropriately?mastery of new and different technologies. new approaches with technology playing asThey’ll need to track and analyze data to shape How can media companies address technology constraints important a role as traditional broadcast skills.and customize experiences. Overcoming to get the best out of future distribution networks?inevitable constraints on network performancealso stands to become increasingly important. Speed will be critical. This is a world that’s How do global media companies address different delivery modelsThe number of connected devices will skyrocket moving faster than ever. The timetables for new for markets at different stages of technological maturity?over the next few years. All of them will drive service and platform launches is compressing to a matter of weeks rather than years. Legacy What new forms of partnerships and collaborations do mediademand for digital video content. The strains businesses need to explore to meet the needs of the consumer?on bandwidth for all but the most generously processes and infrastructure must give way toprovisioned territories (e.g. South Korea) will a model that affords this speed and agility. Thebe considerable. Technology will have a key role investment to get there is justified by the futureto play in delivering high-quality service. Media sustainability it will create. Taking the Pulse: re-examining content, experiences and monetization in the digital world 12
  13. 13. 13 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  14. 14. Brave New Business ModelsThe ascent of the consumer requires Signs of things to come predecessor. Data therefore needs to workbusiness models built around consumer Subscriptions could well shift away from harder, leveraging sophisticated analytics toneeds rather than those of a particular bloated bundles to à la carte options enabling deliver premium, personalized, interactive advertising, and creating richer, more detailedchannel, platform or advertiser. consumers to pick and pay for exactly the content they want and no more, from a understanding of specific consumer groupsA single, shared view of the customer – or fan bases – that will respond to new– often across different channels range of different providers. Content moving unstoppably to digital and inexorably offers. But advertising market structures andto market – is a prerequisite for legacy business processes need to adapt more over-the-top presents profound challengesa successful, consumer-focused wholeheartedly to a new world of performance to the traditional models of advertising asmultiplatform strategy. well as subscription. metrics – and that will take time.The businesses that adapt successfully To satisfy advertisers and improve their And what of the wisdom – or rather thewill need to try different approaches, all consumer experience, they will have to be able wallets – of crowds? Crowdfunding is becoming big business, with over $250m nowat the same time. They’ll need to create to track, measure and communicate consumer behavior in a way that demonstrates return pledged to Kickstarter projects (a platformand run with hybrid business models and on investment (ROI). To a great extent, digital for seed funding new initiatives, projectsconstantly re-evaluate their place in the and products)5. Could this be the new deficitmedia value ‘ecosystem’ in order to spot removes the guesswork from ad-funded models – data is infinitely more accurate financing for content?and capture new revenue opportunities. and more granular than its analog Taking the Pulse: re-examining content, experiences and monetization in the digital world 14
  15. 15. Content moving unstoppably to digital and inexorably over-the- top presents profound challenges to traditional advertising and subscription models.15 Taking the Pulse: re-examining content, experiences and monetization in the digital world Media 2016: Rethinking content, experiences and monetization in the digital world 05
  16. 16. Brave New Business ModelsContent part of a bigger picture their businesses. Google’s core business is What does that mean for you?We’ve already seen the arrival and growth of search, yet via YouTube they stream fourbusinesses that offer new ways for consumers billion videos a day6. Can the new digital economic models be made to workto access digital content. Those new entrants for all parts of the new value chain? Apple, ostensibly a device manufacturer, madelike YouTube and Netflix are also now creating $2 billion in revenue in the third quarter of Will new industry business models sustain investmenttheir own content to differentiate their 2012 alone from the iTunes Store, App Store back into high quality content – or will profits bebrand and overcome the need to battle for and the iBookstore7. Accordingly, content channeled elsewhere?content rights. In the next few years, the owners are likely to have to find new ways tomajor distributors of content are likely to be What are the new content windows and associated work with non-traditional players to make thebusinesses outside the traditional content monetization / pricing? most of those distribution channels, extractindustry. Amazon, Google and Apple alreadyoffer consumers access to significant amounts maximum value from their intellectual property Will the subscription pay TV behemoths be outmaneuveredof content, but it is not at the core of any of and find new sources of revenue. by new over-the-top offerings? How can the traditional advertising industry ‘move together’ to a new world of multiplatform advertising? Taking the Pulse: re-examining content, experiences and monetization in the digital world 16
  17. 17. The road ahead...Any one of the trends we describeabove has the power to disrupt and Study methodology The study is based on a collection of Those businesses that canchange today’s business and operatingmodels. The combined impact of all hypotheses developed by Accenture subject matter advisors, strategy consultants, understand and in turn satisfydevelopments is shaking everything architects and engineers working in theto its core. Some businesses will field. The hypotheses have been screened against inputs from an array of other sources new consumer needs withstruggle to survive the impact of theseseismic shocks. But there’s everythingto play for. Consumers’ appetite for including relevant Accenture research, third party data analysis, academic literature, the compelling new services and flow of venture capital funding and dialoguenew digital experiences continuesto grow. Those businesses that can with industry commentators, operators and disruptors. propositions will have theirunderstand and in turn satisfy thoseneeds with compelling new services For more information efforts amply rewarded.and propositions will have their efforts Please visit www.accenture.com/pulseofmediaamply rewarded. to view the Prezi for more data supporting these trends, watch industry commentators, operators and disruptors as they offer diverse perspectives on what these trends mean for the future of the media and entertainment industry…and to join the conversation.17 Taking the Pulse: re-examining content, experiences and monetization in the digital world
  18. 18. Authors and ContributorsMarco VernocchiRobin MurdochCharlie MarshallBikash MishraKevan YalowitzKit FriendContactsMarco Vernocchimarco.vernocchi@accenture.comRobin Murdochrobin.murdoch@accenture.comSources:1. http://techcrunch.com/tag/online-video/2. http://www.novafm.com.au/article/fifty-shades-grey-becomes-fastest-selling-book-all-time2. Accenture’s #mydigitalexperience Survey4. Accenture Video-Over-Internet Consumer Survey 20125. http://gigaom.com/2012/06/21/kickstarter-by-the-numbers-new-stats-page-gives-daily-updates/6. http://www.reuters.com/video/2012/10/05/youtube-hits-4-billion-daily-streams? videoId=228990470videoChannel=26027. http://www.apple.com/pr/library/2012/07/24Apple-Reports-Third-Quarter-Results.html Taking the Pulse: re-examining content, experiences and monetization in the digital world 18
  19. 19. About AccentureAccenture is a global management consulting, technology services and outsourcingcompany, with 257,000 people serving clients in more than 120 countries. Combiningunparalleled experience, comprehensive capabilities across all industries and businessfunctions, and extensive research on the world’s most successful companies, Accenturecollaborates with clients to help them become high-performance businesses andgovernments. The company generated net revenues of US$27.9 billion for the fiscalyear ended Aug. 31, 2012. Its home page is www.accenture.com.Accenture Digital ServicesAccenture Digital Services is designed to deliver value from digital content ina complex environment. It engages digital consumers with unique, personalizedinteractive experiences—on a massive scale. It supports a mix of business modelsto drive new revenue streams and find new ways to monetize content. It distributesdigital content in any format, across all platforms, to any device. And it optimizesoperating models, delivering next-generation solutions on a pay-as-you-growbasis — all to help clients thrive in a changing digital ecosystem.Its home page is www.accenture.com/digital-services.This document is produced by consultants at Accenture as general guidance. It is notintended to provide specific advice on your circumstances. If you require advice or furtherdetails on any matters referred to, please contact your Accenture representative.This document makes descriptive reference to trademarks that may be owned by others.The use of such trademarks herein is not an assertion of ownership of such trademarksby Accenture and is not intended to represent or imply the existence of an associationbetween Accenture and the lawful owners of such trademarks.Copyright © 2012 AccentureAll rights reserved.Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenturee.
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