You’re a Media Company. Now What?

 Sometime in the future, when Tesla, or Chinese automaker BYD, or Apple produces a digitally enhanced, connected, self-driving car, it could unlock as much as a billion hours per day of customer attention now devoted to watching the road. Instead of checking the speedometer and the rearview mirror, passengers could be watching videos, playing games, reading blogs, or shopping. And it’s unclear whether this new commercial real estate will be owned by automakers, retailers, entertainment studios, or wireless providers.

The possibility that the car will emerge as the next great media platform is but one example of how digitization and the resulting shifts in user behavior are eroding the once-solid borders defining industries and sectors. In a variety of industries, an eclectic mix of new players is importing new capabilities, and competitors armed with new business models are on the attack. In PwC’s 2015 Global CEO Survey, 58 percent of 2,200 CEOs said they were concerned about being disrupted by new market entrants.

Nowhere are these porous and evolving borders more evident than in the entertainment and media (E&M) industry. The past 20 years have brought a wave of disruptions to distribution, formats, technologies, and consumption patterns. As a result, in many of the 156 countries in which PwC operates, companies — not just E&M companies — are investing in content and direct customer media relationships.

There has always been an intimate and complex relationship among consumer and industrial companies, on the one hand, and E&M on the other. The 1950s-era daytime serials were known as “soap operas” because they were sponsored by the companies that made soap. In 1940, at the dawn of the radio era, listeners tuned in to the Texaco Metropolitan Opera broadcasts. The Wonderful World of Disney, the television show that debuted in 1969, integrated media, experience, entertainment, and merchandising. Hello Kitty was born in Japan in 1975 as a way to cute-ify merchandise, and then developed into television series, comics, and video games. Still, through the 20th century, most brands relied on the creativity and expertise of the media, advertising, and entertainment companies to create content and deliver audiences.

In the 21st century, however, as consumers have been gradually shifting away from traditional forms of media content and distribution, the media universe has become both more fragmented and more digital. Consumers can choose from seemingly limitless content, on their own terms and on their own devices. In parallel, new platforms and technologies have arisen that can connect marketers in all industries more directly with users and customers, through websites, blogs, apps, and social media. Meanwhile, the battle for the consumer’s attention has become brutal, and requires new strategies and capabilities. Companies have recognized these developments and are reaching the same conclusion: We all have to be in the media business.

The evidence is ubiquitous. Nike has become a major presence in social media, digital video, mobile apps, and e-commerce — witness the company’s recently launched YouTube miniseries focusing on a fitness bet between two sisters. ANZ Bank, one of Australia’s largest financial institutions, has built a finance news portal, BlueNotes, which is staffed by well-known business journalists. Marriott has created a content studio, supported by Hollywood talent, to develop videos for distribution in social media and elsewhere, all with the business objective of increasing the hotel brand’s appeal to millennials. FairPrice, a Singapore-based supermarket, maintains the highly popular food content platform Food for Life, which hosts 2,000 video assets in a range of languages. And the list goes on.Empowered by digitization, compelled by competitive pressures, enabled by data, and eager to connect directly with customers, companies are now expanding their marketing playbooks to include more E&M-like capabilities. In so doing, they have forged new segments in the entertainment and media industry — especially in advertising. Native advertising, or content marketing, became a US$10.7 billion business in 2015, up 35 percent from the previous year, according to BI Intelligence. Given this simultaneous redefinition of what it means to be a media company and the rekindled investment by many, many companies in new content and in direct audience relationships, it’s not too much of a stretch to say every company is a media company — or will be one soon.

But whether they are dabbling, experimenting, or going all in, companies need to proceed carefully. The media ecosystem includes many different kinds of companies: creators, packagers, distributors, service providers, and aggregators. Companies must grasp how they fit in best. They must have clarity about the type of media company they aim to be, understand who they need to hire, and discern how to design and execute high-quality offerings that meet their business requirements. To a degree, such efforts represent a strategic challenge to traditional entertainment and media players. But these developments also represent an opportunity, especially if the incumbents can reposition their capabilities to thrive in a remixed entertainment and media landscape where those that excel at capturing user attention with a digital-first approach will be those that reign supreme.Read more

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