Building a media enterprise for the digital age
To thrive in the digital era, media companies will need to be leaner, nimbler and more open to working with ecosystem partners.
Partnerships have become much more important as the creation and distribution of content has fragmented across many different platforms.
To engage new audiences, media businesses will need to partner with consumers to co-create and crowdsource material. Alongside the move toward greater collaboration across the industry, digital transformation is pushing companies toward the industrialization of their content-creation workflows and the automation of their content distribution processes..
Partnerships and industrialization is one of three themes that we believe will be central to the digitization of the media and entertainment industry over the next decade. The other themes we examine are content fragmentation, and personalization and contextualization.
Engagement, co-creation and crowdsourcing
Consumers fall into two camps when consuming media: active and passive. Viewers tend to involve themselves actively in sitcoms or reality shows and even more so in live events and sports. With improved connectivity, data collection and analytics, content creators are now able to take advantage of this to harness their audience’s ideas when creating shows.
The ubiquity of social media and smartphones now gives content creators far greater power to create new storylines almost in real time.
Enabling audiences to interact with content creators has the potential to build more loyalty and engagement with the content, particularly if seamless second-screen support for an interactive, community-based experience can be designed.
Some enterprises have taken a different approach to co-creating content by partnering with promising talent to create youth-oriented content for YouTube. These multichannel networks, such as Maker Studios, which was acquired by Disney in March 2014, offer the filmmakers and on-screen talent a cut of the gross revenue from the films that are produced. Maker, which partners with 55,000 independent content creators in more than 100 countries, is one of the biggest producers of short films, with 10 billion views every month and 650 million subscribers.¹
The digital organization
Many of the titans of the media industry matured in the predigital age, as analog broadcasters, newspaper publishers or film studios. These companies have, in many cases, struggled to overhaul their processes, operations and structures to become enterprises designed for the digital age. The temptation for many firms has been to focus on the latest shiny new technology rather than the basics: wholesale digitization of content and processes and adapting their business for social and mobile. This is particularly important as users spend much more time on mobile rather than desktop versions of most popular social media sites (see Figure 1).
However, these basic steps are not enough, as a new breed of digitally native media organization has demonstrated. These enterprises are leaner, nimbler and better suited to keeping pace with the fast-changing preferences and habits of consumers.
Vox Media is an American digital media company that currently has eight editorial brands including SB Nation, The Verge and Re/code. Vox has created an innovative digital-first content management system that integrates content and advertising. Dubbed Chorus, it seamlessly allows journalists to publish content to any of the company’s websites, promote their content on social media and interact with readers.²
Companies such as Vox Media and Vice Media provide some pointers to what we think the digital organization of the future will look like. The organization will have a centralized, data-driven infrastructure and management (cloud services, digitized catalog of content). Around this core there will be independent units that can move fast to create new products across different platforms or apps.
Digital organizations will have the perfect balance of art and science, with a mixture of creative roles (such as designers and editors) and data-oriented roles (such as engineers and data scientists).
Attracting and keeping the right talent will be crucial. Diversity, especially generational diversity, will be important, with creative teams needing to think and talk the language of digital natives.
Flexible, predictive, precise content creation
Data is becoming more important in almost every aspect of our lives, and the creation of films, news articles, music and TV shows is no exception. Perhaps the clearest example of this is content creators using predictive analytics to try to maximize their chances of creating successful content, as exemplified by film studios using the tools provided by Epagogix to reduce their investment risk when green-lighting movies. Epagogix uses analytics to help studios with decisions about which scripts to commission, how to improve the script and at what level to set the budget.³
This approach is likely to become more popular and widely used, drawing on data from many sources (such as social, behavioral or personal). The widespread use of predictive analytics raises the possibility that this method of content creation could become a victim of its own success. If it is widely used, there is a danger that the algorithms employed might tend toward creating a ‘sea of sameness’, with audiences bored by predictable story arcs and characterization. If companies choose to employ predictive analytics in content creation, they will need to be careful not to sideline completely human input, allowing creative staff to use their imagination and experience to create original and unique content.
There are other approaches that can be taken to harness the power of social media in content creation. Snappy TV, which was acquired by Twitter in June 2014, provides powerful tools that allow users to edit and create clips from live TV feeds, which can then be instantly published on social media. Snappy TV has been used by sports organizations such as the US Open and NASCAR to put highlights clips on social media as quickly as possible. Snappy TV also supplies the clip publisher with metrics about where the clip is being viewed and how engaged viewers are.
Media is one of six industries (along with automotive, consumer, electricity, healthcare, and logistics) that have been the focus of the World Economic Forum’s Digital Transformation of Industries (DTI) 2016 project. An overview of the DTI program can be found here.
Our in-depth findings about the digital transformation of the media and entertainment industries are available in a white paper, which can be downloaded here.
To explore a selection of related articles and case studies, please select one of the tags below.