Accenture taking-the-pulse-executive-summary

Taking the Pulse
Re-examining content, experiences and
monetization in the digital world

I am pleased to welcome you to the executive summary
report of #pulseofmedia, Accenture’s latest study of the
major trends that we see shaping the present – and future
– of the media and entertainment industry.

The developments in digital content, experiences The complexity of this still emerging industry
and their monetization are disrupting the status ecosystem is considerable. Our aim in this
quo at a rate and extent we have not seen study is to provide clarity where possible,
before. No media or entertainment business but also to raise the key questions that we
will remain untouched by their influence. believe all businesses will need to address as
New technologies, data, tools and applications they navigate their journey to the future. By
are giving the consumer unprecedented control taking the pulse of the industry today we are
and influence over the content they choose not claiming to provide an exact prognosis.
to consume, along with how, when and Rather, we’re seeking to raise critical questions
where they do so. and provoke the debates that leaders in media
and entertainment will need to engage in
Innovation in devices, platforms and delivery as they re-examine and shape their agenda
is shaping new ways of doing business. In this for the future.
executive summary and in other materials on
the #pulseofmedia site, we give our views on On the site, you will be also able to find the
what this means for players in the industry. views of industry disruptors, commentators and
By examining the changes we see taking place, operators. I hope you will join in the debate.
we hope to provide a fresh perspective of how
business and operating models will need to
respond and change to accommodate them.

Marco Vernocchi
Global Managing Director,
Accenture Media & Entertainment

Taking the Pulse: re-examining content, experiences and monetization in the digital world 02

Introduction

Our industries are in a state of In this fast reconfiguring ecosystem, they’ll need to work in new ways.
continual transformation. New consumers have become creators. Experimentation and testing of new
connections and relationships create Passive consumption has become approaches will become part of business
significant disruption. What used active participation. Mass media has as usual. Hybrid business and operating
to be the linear progression of content become personal. As established norms models will be tested and adapted as
from creator to consumer is now a are overhauled, traditional and non- market needs shift. Legacies may be
more complex web of interactions. traditional media and entertainment in danger as past success will be no
The rules of the game are being companies alike are adjusting and guarantee of future performance.
changed by new forms of digital preparing for a consumer-driven,
content, easy-to-use creation and social-veined, ultra-personalized future. This report takes a look at some
editing tools, and integration across And those that aren’t, should be. of the major developments driving
and between devices and screens. change. We examine how these may
Consumers, no longer beholden to As businesses develop their strategies, impact media and entertainment
schedules, tethered to one location or using yesterday’s version of the content businesses and suggest the critical
tied to a screen, are in charge and at value chain will not help. Rather issues all companies – established
the center of everything. than just focusing on distinct core and new entrants – will need to
capabilities, businesses will need to address as they develop their
understand the interplay of a broad strategies for the future.
range of creative, commercial and
technological skills. To create value

03 Taking the Pulse: re-examining content, experiences and monetization in the digital world

Consumers, no longer
beholden to schedules,
tethered to one location
or tied to a screen, are in
charge and at the center
of everything.


Consumer is King of Content
Empowered by new tools and Consumers in charge means big changes I’m in charge here Technology that was a decade or so ago
technologies, consumers are taking for traditional media and entertainment What were channels with fixed, centrally- available only to professional studios is now
control. They are creating their own businesses. Those that have to date controlled controlled schedules will become looser and within easy reach of millions of consumers.
what, how, where and when content is available High definition video cameras can be bought
new digital experiences across channels more flexible collections of content that can
now need to put the consumer at the center be accessed according to each consumer’s for less than $300, many laptops and tablets
and devices, planning their own as they rethink their business and operating come pre-loaded with sophisticated video
entertainment schedules, and finding personal preferences. Music services such as
models. It’s a move that takes businesses Spotify, Pandora and Rdio show the way by editing tools and the internet, with its now
new ways to interact with content closer to a retail mindset than traditional media ubiquitous social layer, has made distribution
giving consumers access to a vast database
itself. They are at the heart of the approaches. IP-based technology enables two- to millions of people as simple as pressing a
of music from which they can variously make
new waves of the industry, from the way communications, measurement and better and share playlists as well as listen to ‘stations’ button to upload. New tools are also making it
rapid global rise of mold-breaking personalization than ever before. The limitations generated by individuals’ listening habits and easy to make money. Vimeo, for example, has a
new brands, to the transformation that both shaped and constrained the media preferences. In video, Netflix and Amazon feature called Tip Jar that allows its members
imperatives of the corporations that industry as it exists today are disappearing fast. learn from previous behavior and purchases to add buttons to their uploaded content
Advertising and subscription models are changing. that enable viewers to donate any amount
have long controlled media. and recommend similar titles, enabling
And new technology capabilities and skill-sets consumers to discover new content suited between $0.99 and $5001. A quick glance at
are called for. to their preferences. the recent publishing best-seller lists shows the
commercial potential of amateurs turning into
While unencumbered by legacy technology Consumers are doing it for themselves professionals. Fifty Shades of Grey started as a
and ideals, newer innovative arrivals to the fan-site, and a self-published novel on the web.
The top end of today’s ‘user-generated content’
media and entertainment industry also need to With the help of social media acting as
will become simply ‘content’ and compete with
be aware of the implications of a consumer- ‘word-of-mouth’, it has become one of the
everything else for share of mind. The rise of
centric model. Naturally, they’ll need to keep fastest selling books of all time2.
‘prosumer’ content, empowered by increasingly
innovating. But they also need to ensure
sophisticated, low cost technology, means
that they invest in content – keeping it fresh,
that some more easy-to-replicate professional
original and high quality – to hold consumers’
content, such as news, reality TV, some
attention in the face of constantly emerging,
factual and minor sports programming,
ever more innovative competition. And as
will be threatened.
they pursue profitable growth, they also
need to keep in mind their responsibilities to
maintain standards, monitoring and preventing
inappropriate content and illegal activity on
their platforms.


Current business and
operating models are
rarely set up for success
in this future environment.
Fundamental changes
will be needed.


Consumer is King of Content

From What’s on? to What’s up? Coming up on your schedule Given the tremendous range of content What does that mean for you?
Current business and operating models are rarely Linear scheduling will not disappear, but it available to consumers via integrated content
set up for success in this future environment. will need to find a new role alongside other services, tracking and understanding consumer What is the right blend of
Fundamental changes will be needed. Channels over-the-top, time-shifted and on-demand preferences will become a critical capability professional curation, algorithms,
and aggregators will need to find ways to blend content. Consumers will be able to create for content providers. Much as leading and consumer tools to deliver a
professional curating activities with the tools for their own playlists that include scheduled and retailers create unique offers for their relevant content service?
consumers to create their own schedules. This selected content from a variety of other sources. customers according to shopping habits,
so media businesses will need to become How can content companies deliver
will require changes in the way that technologies Successful brands will guide them. They’ll
adept at creating personal schedules to mixed schedules offering linear and
and rights are managed, finding new ways to provide them with tools and algorithmically-
maintain their relevance to consumers. on-demand content?
offer flexibility while maintaining (and seeking driven services that enable them to discover
Accordingly, scheduling will move from
to increase) revenues. Channel brands – and new content and integrate those choices with How should analytics and algorithms
predominantly an art to much more of a
technologies – will emerge that enable all these scheduled items. be used to drive consumption and
science. The use of sophisticated consumer
to happen, blending curated, prosumer and better commissioning of content?
premium content. These brands will become The launch of services such as YouView in the data could become much more important
venues for digital experiences rather than a UK, and YouTube Leanback globally, also offer for gathering the information that will drive Should traditional media and content
linear conduit for simple, passive consumption possible signposts to the future. YouView is content commissioning choices. companies reinvent themselves as
of scheduled content. Their success will depend an Internet TV service that combines the UK’s consumer businesses?
on the rich data-based algorithms and tools they digital free-to-air channels with on-demand What are the ‘platforms of the future’
employ to empower consumer choice. content in a seamless experience, delivered that will enable a consumer-driven world?
without a subscription. In other words, it allows
We asked US and UK online consumers how they consumers to mix scheduled and time-shifted
would most like to discover new video content with on-demand content within a single
and the results were revealing. Far from wanting interface. Powered by data on user behavior
professional recommendations, a clearer picture and preferences, YouTube’s Leanback experience
is emerging of the desire to be better understood combines on-demand viewing in a personalized
as individuals and have content recommended sequential play list structure.
based on past behavior3.

Powering the Digital Experience

The screens through which we are To satisfy consumers and advertisers, media A new dawn for the TV screen Here, there, everywhere
accustomed to consuming our businesses have to create a compelling presence The shift from simple mobile devices But the TV won’t be the only screen. The
entertainment experiences are on and across all screens, from TV to tablet and to multifunctional smartphones has simultaneous use of more than one screen is
beyond. They’ll need to orchestrate content
changing fast. Content, communication, revolutionized what consumers do with far from unusual today. According to Accenture
and services to deliver multiscreen digital the devices they carry with them. The same research, more than 40 percent of US viewers
interaction and gaming are all colliding experiences. That means baking in, rather than
on the same screens – with an magnitude of change is about to happen to already engage with their smartphones or tablets
adding on, a multiplatform approach to the the TV. Smart, connected devices will enable when watching TV4. And the trend is set to
expectation of being able to move entire creative process from start to finish. so much more than simply viewing – they’ll accelerate rapidly. As it does, it will make greater
from one screen to another seamlessly.
be the focal point for digital experiences and demands on media businesses. Content across
The very nature of competition on To deliver new experiences, fluency in communication in the home. For example, screens will not only need to be complementary
these screens is evolving. Broadcasters, technology will become as important as while today reliable video conferencing but it will also have to be device-relevant and
for example, will need to worry not broadcast, publishing, or entertainment is largely confined to business, the same differentiated according to use. Shrinking-to-fit
only about what rival broadcasters are content know-how. Over-the-top, or IP-based, technology will soon start to appear in homes won’t be enough to grab and maintain consumer
technology will become the new normal for
making available on screen but what - and that’s just one of the ways connectivity attention. Gaming and social media will become
content delivery. Media and entertainment and TV will combine to create far-reaching an integral element of delivering compelling and
other forms of ‘screen experience’ will
businesses will therefore need to develop or change. Cloud-based services, higher immersive digital experiences. Media companies
compete for their customers. What acquire the technology skills they lack – and
happens, for example, when high bandwidth connectivity and the integrated will need to be fluent in the technology that
know where to find the right partnerships, use of different devices are set to transform enables these experiences.
definition video calling is a normal collaborations or acquisitions to do so. the role that the biggest screen in the
feature of the TV screen? household plays – becoming the anchor
Innovative digital delivery platforms have point for digital experiences.
made a huge impact across the industry. But
they haven’t had it all their own way. Content
owners – particularly in video – have retained
significant control. Innovators will need to
collaborate effectively with content owners,
recognizing their mutual dependency.

Taking Media 2016: Rethinking content, experiences and monetization in the digital world 10
the Pulse: re-examining 05

Delivering the digital experience
of the future will call for new skills,
new creative and technological
capabilities, backed up by new
organizational approaches.


Powering the Digital Experience

Orchestrating for multiplatform businesses will therefore need to explore new What does that mean for you?
Delivering the digital experience of the future will solutions – that compress or stream video data
call for new skills, new creative and technological in new ways – to maintain acceptable services What new forms of creativity are needed to power
capabilities, backed up by new organizational over constrained networks. multiplatform experiences?
approaches. They’ll need to work across multiple
Again, experimentation and testing will How should media businesses distinguish core and non-core
platforms, in novel ways that will demand
become a central element of developing technologies and manage them appropriately?
mastery of new and different technologies.
new approaches with technology playing as
They’ll need to track and analyze data to shape How can media companies address technology constraints
important a role as traditional broadcast skills.
and customize experiences. Overcoming to get the best out of future distribution networks?
inevitable constraints on network performance
also stands to become increasingly important. Speed will be critical. This is a world that’s How do global media companies address different delivery models
The number of connected devices will skyrocket moving faster than ever. The timetables for new for markets at different stages of technological maturity?
over the next few years. All of them will drive service and platform launches is compressing to
a matter of weeks rather than years. Legacy What new forms of partnerships and collaborations do media
demand for digital video content. The strains businesses need to explore to meet the needs of the consumer?
on bandwidth for all but the most generously processes and infrastructure must give way to
provisioned territories (e.g. South Korea) will a model that affords this speed and agility. The
be considerable. Technology will have a key role investment to get there is justified by the future
to play in delivering high-quality service. Media sustainability it will create.


Brave New Business Models

The ascent of the consumer requires Signs of things to come predecessor. Data therefore needs to work
business models built around consumer Subscriptions could well shift away from harder, leveraging sophisticated analytics to
needs rather than those of a particular bloated bundles to à la carte options enabling deliver premium, personalized, interactive
advertising, and creating richer, more detailed
channel, platform or advertiser. consumers to pick and pay for exactly the
content they want and no more, from a understanding of specific consumer groups
A single, shared view of the customer – or fan bases – that will respond to new
– often across different channels range of different providers. Content moving
unstoppably to digital and inexorably offers. But advertising market structures and
to market – is a prerequisite for legacy business processes need to adapt more
over-the-top presents profound challenges
a successful, consumer-focused wholeheartedly to a new world of performance
to the traditional models of advertising as
multiplatform strategy. well as subscription. metrics – and that will take time.

The businesses that adapt successfully To satisfy advertisers and improve their And what of the wisdom – or rather the
will need to try different approaches, all consumer experience, they will have to be able wallets – of crowds? Crowdfunding is
becoming big business, with over $250m now
at the same time. They’ll need to create to track, measure and communicate consumer
behavior in a way that demonstrates return pledged to Kickstarter projects (a platform
and run with hybrid business models and
on investment (ROI). To a great extent, digital for seed funding new initiatives, projects
constantly re-evaluate their place in the and products)5. Could this be the new deficit
media value ‘ecosystem’ in order to spot removes the guesswork from ad-funded
models – data is infinitely more accurate financing for content?
and capture new revenue opportunities.
and more granular than its analog


Content moving unstoppably to
digital and inexorably over-the-
top presents profound challenges
to traditional advertising and
subscription models.

15 Taking the Pulse: re-examining content, experiences and monetization in the digital world Media 2016: Rethinking content, experiences and monetization in the digital world 05

Brave New Business Models

Content part of a bigger picture their businesses. Google’s core business is What does that mean for you?
We’ve already seen the arrival and growth of search, yet via YouTube they stream four
businesses that offer new ways for consumers billion videos a day6. Can the new digital economic models be made to work
to access digital content. Those new entrants for all parts of the new value chain?
Apple, ostensibly a device manufacturer, made
like YouTube and Netflix are also now creating
$2 billion in revenue in the third quarter of Will new industry business models sustain investment
their own content to differentiate their
2012 alone from the iTunes Store, App Store back into high quality content – or will profits be
brand and overcome the need to battle for
and the iBookstore7. Accordingly, content channeled elsewhere?
content rights. In the next few years, the
owners are likely to have to find new ways to
major distributors of content are likely to be What are the new content windows and associated
work with non-traditional players to make the
businesses outside the traditional content monetization / pricing?
most of those distribution channels, extract
industry. Amazon, Google and Apple already
offer consumers access to significant amounts
maximum value from their intellectual property Will the subscription pay TV behemoths be outmaneuvered
of content, but it is not at the core of any of
and find new sources of revenue. by new over-the-top offerings?
How can the traditional advertising industry ‘move together’
to a new world of multiplatform advertising?


The road ahead...

Any one of the trends we describe
above has the power to disrupt and
Study methodology
The study is based on a collection of
Those businesses that can
change today’s business and operating
models. The combined impact of all
hypotheses developed by Accenture subject
matter advisors, strategy consultants, understand and in turn satisfy
developments is shaking everything architects and engineers working in the
to its core. Some businesses will field. The hypotheses have been screened
against inputs from an array of other sources
new consumer needs with
struggle to survive the impact of these
seismic shocks. But there’s everything
to play for. Consumers’ appetite for
including relevant Accenture research, third
party data analysis, academic literature, the compelling new services and
flow of venture capital funding and dialogue
new digital experiences continues
to grow. Those businesses that can
with industry commentators, operators
and disruptors.
propositions will have their
understand and in turn satisfy those
needs with compelling new services For more information efforts amply rewarded.
and propositions will have their efforts Please visit www.accenture.com/pulseofmedia
amply rewarded. to view the Prezi for more data supporting
these trends, watch industry commentators,
operators and disruptors as they offer diverse
perspectives on what these trends mean for
the future of the media and entertainment
industry…and to join the conversation.


Authors and Contributors
Marco Vernocchi
Robin Murdoch
Charlie Marshall
Bikash Mishra
Kevan Yalowitz
Kit Friend

Contacts
Marco Vernocchi
marco.vernocchi@accenture.com

Robin Murdoch
robin.murdoch@accenture.com

Sources:
1. http://techcrunch.com/tag/online-video/
2.
http://www.novafm.com.au/article/fifty-shades-grey-becomes-fastest-selling-book-all-time
2. Accenture’s #mydigitalexperience Survey
4. Accenture Video-Over-Internet Consumer Survey 2012
5. http://gigaom.com/2012/06/21/kickstarter-by-the-numbers-new-stats-page-gives-daily-updates/
6.
http://www.reuters.com/video/2012/10/05/youtube-hits-4-billion-daily-streams? videoId=228990470videoChannel=2602
7. http://www.apple.com/pr/library/2012/07/24Apple-Reports-Third-Quarter-Results.html


About Accenture
Accenture is a global management consulting, technology services and outsourcing
company, with 257,000 people serving clients in more than 120 countries. Combining
unparalleled experience, comprehensive capabilities across all industries and business
functions, and extensive research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance businesses and
governments. The company generated net revenues of US$27.9 billion for the fiscal
year ended Aug. 31, 2012. Its home page is www.accenture.com.

Accenture Digital Services
Accenture Digital Services is designed to deliver value from digital content in
a complex environment. It engages digital consumers with unique, personalized
interactive experiences—on a massive scale. It supports a mix of business models
to drive new revenue streams and find new ways to monetize content. It distributes
digital content in any format, across all platforms, to any device. And it optimizes
operating models, delivering next-generation solutions on a pay-as-you-grow
basis — all to help clients thrive in a changing digital ecosystem.
Its home page is www.accenture.com/digital-services.

This document is produced by consultants at Accenture as general guidance. It is not
intended to provide specific advice on your circumstances. If you require advice or further
details on any matters referred to, please contact your Accenture representative.

This document makes descriptive reference to trademarks that may be owned by others.
The use of such trademarks herein is not an assertion of ownership of such trademarks
by Accenture and is not intended to represent or imply the existence of an association
between Accenture and the lawful owners of such trademarks.

Copyright © 2012 Accenture
All rights reserved.

Accenture, its logo, and
High Performance Delivered
are trademarks of Accenturee.

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