70% of media and entertainment companies are willing to accept short-term revenue losses for long-term digital growth
28 January 2014
EY’s Sustaining digital leadership! study, released today, shows leading media and entertainment (M&E) companies are putting innovation at the centre of everything they do. Digital models are embedding a range of M&E business processes – from product development and distribution to customer experience, supply chains, profit models and risk management. Specifically, this study finds 70% of the companies identified are willing to accept short-term revenue losses for long-term digital growth.
Consumers driving technology-enabled change
The study goes onto shows that 85% of M & E companies want direct relationships with customers. Related findings show these relationships are the basis for a new “radical intimacy” based on 360 degree profiles of customer behaviours and desires when mobile, social, online, at home, in theatres or at work. For example:
- 77% of respondents said they can access customer data in real time;
- 64% of respondents claimed “creating a culture of innovation” as a top strategic priority from their business; and
- 57% of respondents gave the same weight to “listening to customers and analysing customer interactions.” These two strategies combine to make customer engagement central to innovation.
Big data power and challenges exemplify M&E’s journey to digital transformation
M&E companies often contend with big data issues. Rich in data collected as their customers click, engage or turn away from the content and services offered. However, many companies in this sector wrestle with data reliability and a shortfall in the skills and tools needed to derive useful product development and marketing insight. Specifically:
Data reliability is a challenge for 49% of respondents;
- Only 19% of respondents state they are integrating customer data across all distribution channels today;
- Only 41% of respondents are employing second- or later-generation analytics – improving audience segmentation and other functionality based on lessons learned from early implementations; and
- 39% of respondents say they are not yet obtaining insight from big data.
“While technology is enabling a lot of innovation in M&E, we’ve found that the most successful examples in both B2B and D2C, are being driven by customers, their changing behaviours and how they’re adopting both the technology and the technology-enabled innovations,” says JB Berty, EY UK Technology, Media & Telecommunications Leader. “Customers have unprecedented control over content consumption – how, when and where.”
He adds: “The continuous nature of technology-enabled innovation makes this a kind of never-ending journey. No single new product or service will ever be the answer. Winners will be those who build organisational systems, processes and cultures that always drive innovation building on today’s successes.”