The Next-Generation Media Firm

By Marco Vernocci, Accenture -- Multichannel News, 10/17/2011 12:01:00 AM

Consider for a moment the word media. What images come first to mind? Your Sunday newspaper? The endless drone of 24x7 television news? Or perhaps your favorite radio station?

This is the context within which we have thought of and discussed media for years. Taken from its original Latin root, media described “an intervening agency, means or instrument” and was first applied to newspapers two centuries ago.

For decades, media companies were tasked with essentially one core skill: storytelling. And they were great at it. Now that core skill of storytelling is not enough.

Today’s media company is not built for tomorrow’s consumer, who demands a customized, compelling experience, regardless of how that experience is delivered.

This is a shift most media companies simply aren’t built for. Our recent Global Media & Entertainment High Performance Study found that 91% of senior executives at media and entertainment companies admit they are not taking full advantage of customer data that can deliver customized content, leaving them ill-prepared to seize the revenue opportunities of today’s digital technologies and provide the personalized experience consumers are demanding.

THREE ELEMENTS OF SUCCESS

So how do media companies embrace this shift? There are three key elements:

First, they must embrace the audience of one. Today’s consumer expects a media company to get to know them as an individual. We’re starting to see some of this in services like Netflix’s complex movie recommendation engine or Flipboard’s tablet magazine app that curates content based on what our friends read and found interesting.

Second, media companies must rethink monetization, both in terms of content and advertising. Media companies will succeed by selling the same content multiple times to as many consumers on as many devices as possible.

Digital advertising also must change, because marketers are demanding to pay based on outcomes (marketing impact, feedback or even sales), not inputs (pages, spots, banners, etc.). This is a major transformation with major risks. If brands aren’t getting meaningful results and engagement, they will abandon traditional media, which will feel more and more like a guessing game.

The third element is in the content supply chain, which will continue to become more complex. Today, the live broadcast is only one of many opportunities to reach an audience, and media companies must figure out how to monetize across multiple platforms, such as PCs, smartphones and tablets.

NEW MODEL NEEDED

All of these changes add up to a total rethinking of the underlying media operating model, which is essential for enabling the changes described above. The new digital world won’t replace the old overnight, but the media landscape will continue to grow more complex.

Increasing fragmentation and complexities will drive media companies to find new economies of scale and new technology platforms. To leverage this new model, they must stop forcing content into “vertical” silos (TV, Web, etc.). Instead, they must reorganize around core capabilities to develop competitive “horizontal” assets to increase their relevance to the digital consumer. This will accelerate their ability to quickly monetize new business models, facilitate cooperation in the digital ecosystem and enable strategic repositioning in the value chain.

Things have indeed changed. Yesterday’s mass media is tomorrow’s mass technology. The next-generation media company is at hand, if we are ready to grasp it.

---

Marco Vernocchi is the global managing director of Accenture’s Media & Entertainment industry group.