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
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
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
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.