The Evolving Media, Publishing and Entertainment Landscape:Challenges and Opportunities
The global media, publishing and entertainment (MPE) sector is undergoing disruption at an unprecedented pace in the 21st century. A plethora of innovative content creation and distribution platforms have upended the conventional business models of various segments across the industry. More importantly, the seemingly irreversible ‘consumerization’ of the MPE landscape continues to reflect in rapidly evolving expectations of digitally empowered customers, who today seek personalized, on-demand products and services.
While these powerful dynamics pose major challenges for MPE companies, the opportunity for sustained and profitable growth is real. According to the 2014 - 2019 Entertainment & Media Outlook published by PricewaterhouseCoopers (PwC), the size of the U.S. MPE market–the largest globally–is expected to expand to $771 billion by 2019, from $632 billion in 2015.
So, how can the industry harness various disruptive digital technologies such as the Internet of Things (IoT), mobility, Big Data, cloud computing and social media to diversify its revenue streams, and expand customer base? What strategies and implementation roadmaps can companies adopt to enhance customer experience, for increased brand loyalty? Which specific digital technologies–including wearables and virtual reality–should MPE firms embrace, given their respective contexts, to boost customer engagement and margins?
In this blog, we take a look at the changing dynamics of the broadcasting, publishing and gaming segments in particular, and explore how companies could achieve their key business goals.
For broadcasters, fierce competition from over-the-top (OTT) operators has emerged as a key challenge, with these nimble upstarts disrupting the conventional content distribution model. The rapid ‘appification’ of consumer media and entertainment is forcing broadcasters to redefine the way they build and integrate their business processes. In a direct-to-customer world, where subscribers demand personalized content anywhere, anytime–and on any platform–broadcasters need to rethink their traditional business models. The industry is also confronting new risks associated with copyright infringement and data privacy, given the increasing digitization of music and movies. Other major concerns include protecting video IP, and managing user generated content in both amateur and professional environments.
As far as the rapidly consolidating publishing segment is concerned, top challenges include the ever shrinking footprint of physical bookstores and the need for enhancing discoverability of new authors and books. While the digital revolution has resulted in dramatically reduced circulation and advertising revenues for the print media, the rising popularity of eBooks threatens traditional book publishers.
To thrive in a volatile environment, book publishers must effectively reach out to the always-on, digitally savvy millennials by building a strong mobile presence. Other noteworthy challenges for publishers include scaling up production capacity, and building a flexible, asset-based supply chain for effectively meeting demand.
The gaming segment, on the other hand, is grappling with reduced consumer spending on non-discretionary entertainment activities, as highlighted by sluggish revenue growth across key casino markets and theme parks. Key challenges here include rationalizing the massive upfront capital expenditure associated with setting up or revamping gaming facilities, and sustaining offline revenues amid the soaring popularity of online gaming.
In my next blog I would provide the roadmap which Media and Entertainment companies can utilize to address these key business challenges.