Findings from a survey conducted by renowned consulting firm Accenture suggest that an ‘overwhelming’ majority (91 per cent) of senior executives of media and entertainment companies admit that they are not taking full advantage of customer data that can deliver customised content, leaving them ill-prepared to seize the revenue opportunities of today’s digital technologies.
The study also found that 95 per cent of the executives surveyed indicated that they did not have strong digital customer relationship management (CRM) capabilities in place. And more than half (58 per cent) say they are still in the early stages of developing such capabilities.
According to Accenture’s Global Media & Entertainment High Performance Study, fewer than ten per cent of the executives indicated that their companies have a fully integrated view of their digital consumers. This suggests that the vast majority (91 per cent) of industry players must consider altering their way of doing business if they are to succeed in growing revenues in today’s digital landscape.
The study canvassed opinions from 130 senior industry executives across Europe, North America, South America and Asia Pacific in order to identify the characteristics that will be required of high-performing media and entertainment companies of the future. It involved speaking to leaders and decision-makers in the media and entertainment industry, including television, gaming, film, music, publishing, portals and advertising.
Accenture also notes that after five years of carrying out exhaustive industry surveys by Accenture, the latest shows that only 57 per cent of the executives say their companies are making continued progress on the journey from analogue to digital. In fact, only 43 per cent of the executives surveyed say their companies have digitised more than half their properties. A year ago, similar Accenture research found that a third (33 per cent) of the companies were transforming their businesses from analogue to an integrated, file-based digital enterprise.
“Although some companies have made more progress toward achieving the goal of distributing content via any channel, in any format, to any device, most still need to form a holistic view of their digital consumer so they can monetise their content,” said Marco Vernocchi, global managing director of Accenture’s Media & Entertainment industry group. “Revenue growth in this new, multi-platform world is dependent on delivering personalised, consumer-driven content to individual consumers via the right platform. This change in focus from the mass-market audience to an audience of one requires a complex shift from mass media to mass technology.”
Accenture’s research found that 80 per cent of those interviewed said the media and entertainment industry is still changing with more rapid change yet to come. As a result, 85 per cent of the executives believe their business will continue to change significantly.
When asked about the implications of social media for their business, more than half the executives (55 per cent) indicated their companies had a clearly defined social networking strategy in place. Thirty-eight per cent of the executives indicated they use social networking to gain customer intimacy while only 17 per cent indicated that it is employed to gain sales. According to Vernocchi, these findings may indicate that the key imperative for business growth is to establish a direct relationship with the consumer.
The study also showed that 42 per cent of the executives expect advertising to be the primary source of revenue over the next two years.
Another key area of focus was rights management as a result of its impact on the monetisation of digital content as a way of maximising return on investment. Yet, more than three-quarters (77 per cent) of the executives interviewed indicated that their companies did not have an integrated approach to rights management. Accenture believes this is an urgent need that must be addressed by the industry due to the rising cost of content creation and acquisition.
Nearly half the entertainment executives interviewed (48 per cent) indicated that they might collaborate with their competitors within the next year or two. This is a much lower percentage than their counterparts in other industry segments; publishing (77 per cent); portals (65 per cent); and broadcasting (64 per cent).
“Clearly, the industry has lots of work to do to take advantage of the opportunities presented by the digital distribution of content,” said Vernocchi. “A clear view of the customer, improved customer relationships and digital rights management are just a few areas that could yield significant results.”