SORRY BROADCASTERS, YOU’RE HISTORY
Today, consumers are bombarded with content vying for their attention. Shows such as Games of Thrones are competing for eyeballs alongside videos from YouTube, Netflix and Instagram. In this world of open access to content, attention spans are short and customer loyalty is low.
How to win?
Winning in media requires the ability to connect consumers to the content they want. The days of selling expensive bundles of 100s of irrelevant television channels are over.
There are two viable strategies media companies can pursue, a defensive one we see today and a disruptive one which will emerge:
- “Defend” – Invest in content that consumers love – This year Netflix will spend $7bn on acquiring new content and ESPN will spend a similar amount on sports rights.
- “Disrupt” – Leverage content that consumers love – There is a gap in the media ecosystem for a central actor to aggregate all of the content, similar to Spotify and music
What the future will look like
The number of intermediaries that separate content creators and content consumers will fall. Instead, there will be multisided platforms in which consumers and creators connect. These aggregators will be powered by content-matching engines which use data to cut through the noise and find the content of interest.
Imagine this use case: You get notified that your favourite sports team have a match, you watch, you pay, and the rights holder gets remunerated.
- Power will lie with the rights holders and the aggregators who build the best matching capabilities
- Consumers, who will only pay for the content they consume, will also be better off
- Internet service providers will see a rise in demand, particularly for mobile
- Broadcast networks and TV channels will become superfluous
- Reduced barriers to entry will incentivise user generated content, we will see more amateur/independent stars rise to fame à la Justin Bieber/PewDiePie
- A vehicle for peer-to-peer recommendations will emerge
- Financing of content will become interesting, expect to see crowdfunded content
- Technologies to enhance the content consumption experience will become increasingly popular e.g. AR/VR/second screen
- Winning in media is about connecting consumers to the content they want quickly
- In the future, the media ecosystem will be controlled by platforms that aggregate content creators and content consumers
- There will be no role for the broadcaster