According to the latest study by Big Four auditing and advisory firm, EY, the media and entertainment industry is squaring up to the challenges of shifting customer demands, technological innovation, regulatory and policy-based upheaval, and a strategic reshaping of the competitive landscape. With the competition intensifying, companies will possibly have to adopt a multi-generation strategy and broaden their focus beyond younger demographics or risk losing huge growth potential.
The report released by the EY Global Media & Entertainment Sector titled “Ten opportunities and threats for media and entertainment companies, 2019” shortlists the biggest opportunities and potential threats facing the industry over the next 12 months, highlighting priorities for industry leaders and how they can respond.
In recent years, the industry has placed younger generations at the heart of content and channel strategies, potentially at the risk of overlooking older generations. The report points out that while Gen Z and millennials are regarded as digital natives, baby boomers typically have more disposable income and are becoming increasingly adept in how they consume content and embrace technology.
In addition, boomers are more loyal than younger generations, and with people aged 65 and older set to exceed the number of children under the age of five by 2020, this demographic offers an emerging growth opportunity. The report states that companies must now take steps to better understand boomers’ unique preferences.
John Harrison, EY global media & entertainment leader, said, “As a demographic group, the older generation is simply too big to ignore and will only become more influential over time as they ascend the technology ladder. With competition intensifying, to get closer to the customer, media and entertainment companies must now broaden their focus beyond younger demographics if they are to succeed in an increasingly complex landscape.”
He added that a data-driven approach will be essential for companies seeking to understand how older generations are adopting technology, and to help facilitate the development of personalised experiences across the right channels, thereby unlocking huge opportunities for growth.
The report also suggests marketers rethink advertising currencies, experiences, and incentives. The current media landscape is caught between two very different forms of marketing: performance-driven marketing built in the native digital world defined by targetability and precision, and brand marketing built on scale and efficient distribution. Marketers will need to strike a new balance to understand the precise math of these differing approaches to marketing
Meanwhile, currencies for advertising are not yet fluid enough to enable the calculations to move seamlessly between traditional, linear media, and digital formats. While digital continues to ascend, there is still significant scale and importance on more linear experiences, which must be enabled for brands to achieve their goals.
The report cites “obsessing about the customer” as one of the top ten themes for 2019. While media companies are continually reinventing products to compete with digital natives, complexity breeds inconsistency that can deliver poor customer experience. In particular, many companies lack the infrastructure to gather relevant information from multiple channels and feed it back into their ecosystems. To mitigate this, the report states that companies must deploy technology more like digital natives to enable better customer experiences.
With such rapid advancements in technology, and with media companies amassing huge volumes of personal data, cybersecurity is featured as a critical threat facing the sector. The report points out how the Internet of Things and a growing number of connected ecosystems have multiplied the potential threat level in recent years. Companies need to take steps to devise a multilayered cybersecurity strategy, with a particular focus placed around brand-related assets.
The report also points out the disruption across the tax landscape presenting both a huge opportunity and threat to the industry. A range of macro trends, including Brexit, trade disputes and a global drive toward increased transparency, are playing into a deepening sense of uncertainty.
Other opportunities and threats cited in the report include intelligent automation, which can help companies achieve tangible benefits on both the bottom and top lines; the prospects of building direct-to-consumer business models; and the intensifying battle for content.
Harrison said: “We have known for some time that media and entertainment companies are at the centre of disruption, driven by the inception of new technologies and changing consumer attitudes. As ecosystems continue to shift at an even greater pace across the industry, the imperative to act is now as companies place their bets on new technologies, business models and mergers and acquisitions to improve how they interact with their customers. But in doing so, they must not overlook the urgency to build higher levels of cyber resilience across what is becoming a much wider content delivery chain.”