As we emerge from the downturn, organisations across every industry are debating how to acquire and relate to customers in an entirely new world. For those in media, the rise of digital platforms is sure to present the greatest challenge as consumers transition online.
While it is impossible to predict how the media industry might fair during this period of flux, UK Head of Media David Elms offers his views on five possible game-changers.
The internet has put viewers firmly in control of content consumption and connected households are an increasing trend. Future generations will insist upon flexible access to on-demand, catch-up and catalogue material and it goes without saying that broadcasters will need to keep pace with smart technology in order to deliver this.
Despite the emergence of digital distribution platforms, it is worth noting that linear television has remained resilient and I believe that there will always be a place for traditional broadcasting. The industry has faced successive waves of innovation and technological change but it is the quality of content that continues to characterise success.
In my opinion, it is the quality, relevance and timeliness of content that dictates consumption patterns and broadcasters are well placed to maintain their primacy if they are able to address the issue of access. Live linear broadcasts still account for 89% of total television viewing but I see the current lack of access and interactivity as shortcomings. While linear television will surely remain the best delivery platform for live content, such as sport and current affairs, audiences are likely to become frustrated by the limitations of broadcasting as we currently know it.
“In 10-15 years time broadcasting networks will be competing with individuals”
It is without doubt that digital technology will multiply the number of broadcast platforms and enable individuals to transmit their own material but today’s internet simply cannot deliver the transmission quality of established networks.
I therefore disagree with this statement - contemporary digital platforms are not yet considered viable alternatives to traditional broadcasting - but it is inconceivable to expect this disparity to remain.
Looking ahead, individuals will certainly play an increasing role in both the production and distribution of content but I expect broadcasting networks will embrace this, much like Stv has encouraged hyperlocal, user-generated content for regional news services.
I stress that it is the quality of content that drives consumption but if broadcasters are to protect their primacy, the issue of access must be an equal priority. The proliferation of digital platforms will only intensify the demand for great content but to attract the modern audience, distributors must enable it more effectively.
Enabling content in the digital age will call for greater choice, flexibility and interaction and we are likely to see the boundaries between broadcasting and technology begin to blur. Indeed, digital technology may precipitate a number of cross-sector alliances as more organisations develop online multimedia services; YouTube; Netflix; Facebook etc. In my view, technology companies are in a strong position to lead the pack if they can shift focus from physical hardware to the implementation and monetisation of content.
For now, broadcasting will be supplemented by technology but it is not beyond the realms of possibility for the two industries to be one and the same in years to come.
Technology is reshaping the relationship between content and consumers and two dominant trends are flexi-linear and mobile consumption. According to the 2011 Kantar Worldpanel, one in two consumers now owns a smartphone and 80 percent of adults in the UK view content online.
In spite of this, mobile distribution, in its current form, cannot compete with the quality of traditional broadcasting and only 12 percent say that they are likely to watch TV on their mobile. In my view, mobile distribution is currently best suited to ‘bite-size’ content which explains why YouTube consistently draws the greatest proportion of total online viewers.
TV everywhere is a reality and while digital players are sure to close the ‘quality gap’ there is no evidence to suggest that mobile consumption will undermine established broadcasters. To the contrary, platforms such as BBC iPlayer and 4oD are gaining popularity and will only augment conventional models.
Crucially, networks must think fast and exploit their inherent strengths - brand value; expertise; insight and capital. Of course, there is no ‘one-size-fits-all’ solution but those who shy away from technology are sure to endanger their competitive advantage.
Many industry watchers are debating whether the printed newspaper has a future. I believe that it does for the foreseeable future - but whether that future extends beyond another ten years is a far trickier question.
Online platforms have unveiled opportunties to engage audiences and raise revenues in ways not previously possible but for many in media, the digital age has created an invidious predicament – margins and profits are under pressure, print circulations are falling and advertising rates are being squeezed. In the words of Alan Rusbridger, Editor of The Guardian, “the economics of newspaper publishing do not add up” and the only supposed route back to growth lies in the online medium.
So why are so many organisations persisting with business models rooted firmly in the analogue past and not the digital future?
Instinct tells me that some are waiting for some sort of magic bullet; the perfect solution that will work for them all. But of course, there is no single solution and different online content models will work for different publications. It is only by a process of trial and error that publishers will eventually figure out what the ideal content model is for an individual publication.
However, I think that many organisations perceive this issue as more of a short-term threat than a long-term opportunity; thus explaining the degree of reticence which remains.
Much of the inaction is also driven by a fear that that venturing too far online can only serve to cannibalise existing market share in the traditional print world. That’s understandable but embracing the world of digital content is now a business imperative. Early winners will surely be those who demonstrate the nerve to make a fundamental change; who are not afraid to experiment and who can translate that experience into a workable and profitable model. In my view, simply not playing the game isn’t an option.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.