Digital transformation hit the media and entertainment sector especially early compared to other verticals, and the impact is still being felt today. What customers expect and want from their entertainment, media, and news is radically different from what it was just a few short years ago. Newspapers, media, and entertainment companies that haven’t already transitioned to today’s digital world must quickly adapt if they are to compete and survive. And for those who have transitioned, staying on top of new strategies and technologies to ensure investments are optimized is a challenge.
As ad revenues have plummeted, publishers in particular have found themselves looking to create new revenue streams. Some of them are creating original content, while others are exploring branded ecommerce opportunities. All of these companies will have to digitally transform their business models from the inside out in order to meet customer demand.
Here’s a look at the challenges in today’s media and entertainment marketplace and how forward-thinking companies are succeeding with a strategy that puts the customer at the centre of everything they do.
Revenue Pressure and the Mandate to Monetise Content
Whether your business is a newspaper, a media company, or a sports entertainment franchise, chances are your top priority is figuring out how to create new revenue streams. Social media has completely disrupted the traditional news consumption model, streaming services are encroaching on entertainment properties’ market share, and some publishers are finding they must pursue content licensing opportunities in order to stay viable. Here are some of the challenges they’re encountering.
News organisations are under tremendous revenue pressure as ad revenue is dwindling. News consumers enjoy incredible choice today – they can browse the latest news stories for free right on their mobile devices or simply fire up Twitter and get instant access to breaking news on demand. This is as true for sports as it is for news. Fans often check Twitter first to get real-time updates on a match in progress because they know that when they check a news site, it’ll always be a bit behind. Because of this lag, they tend to rely on social media channels for access to breaking news updates – and this has created a revenue crunch for news organisations as subscription models have begun to falter.
Entertainment properties are grappling with heavy competition from streaming services and those that don’t have a solid streaming offering are finding it hard to catch up. Blockbuster is a perfect example with which we’re all familiar. They failed to adapt to digital streaming and now they’re a relic of the past. By contrast, successful entertainment businesses have embraced streaming and used it to give their customers an even better experience at an attractive price point. For example, Sky TV has embraced Netflix and extended their capabilities so their customers can get Sky on its own as well as Netflix directly on the Sky service that they already know and love
Publishers have not been spared from the pressure to digitally transform their companies. Many travel magazines, for example, were once able to generate enough revenue from their attractive in-flight publications. Now, however, they have had to pivot their strategy to include more digital media and content. A massive publisher that produces airplane magazines might now also be building out content on a specific topic like the best way to spend three days in California, then selling it to the tourism boards there. This helps the publisher diversify revenue streams and offset the revenue challenges it’s encountering.
All companies in the media and entertainment space are trying to figure out how to monetise content since this is the most viable option for business survival in the new paradigm. But the bar is higher now. It’s no longer about simply reaching your customers but motivating them. With so much choice and competition, how do you break through and keep people engaged on your site? The answer lies in creating memorable experiences they will talk about, turning anonymous visitors into your engaged fans.