Over the summer, streaming giant and industry up-ender Netflix reported its first domestic subscriber loss since 2011 and its lowest quarterly subscriber growth in three years. Within hours, its stock value tanked $17 billion in a single day. You read that right: $17 BILLION. Clearly, no one is immune from digital transformation trends in media—even those who helped create and spur them forward.
Last year, we looked at digital transformation trends for media and entertainment focusing on things like the increase in video ads, a clamor for digital experience, and a rise in mobile data usage due to such high demand. Heading into 2020, all of those things will likely to continue. After all, we as consumers haven’t changed that much. We still want lots of content, everywhere, right now.
The greater trends we’ll be seeing from the media and entertainment companies themselves, however, will focus more on getting a handle on the wild masses of content being created and shared across an endless number of channels. In other words: we need to cap the crazy and realize what types of technology advancements and content creation will really drive business in 2020—and which will merely drive companies into the ground.
Top Digital Transformation Trends in Media: Step Away from the Money Pit
A recent—and incredibly illuminating—report from Accenture noted that Opex for today’s media and entertainment companies is rising faster than revenue. I’m guessing Netflix could give a personal testimony to that one. In layman terms, spending is increasing faster than profit, and in business that’s always a bad thing. Accenture notes that media companies are caught in a “spending trap beyond their control.” I tend to be more optimistic about the problem. Yes, as we head into 2020, media and entertainment groups need to get a handle on content and spending, but I don’t feel that it’s beyond their control. Every company today, aided by AI and machine learning, has the power to be smarter about where and how they’re spending. They have the ability to see what’s working and what isn’t. It is no longer necessary to create content merely for the effort of making content. It’s high time they get honest about what content is worth creating and act accordingly.
Top Digital Transformation Trends in Media: Focus on the Enterprise
It’s easy to get stuck on the tech side of digital transformation when it comes to media and development because today’s streaming, mobile, real-time beacons and AI seem to have been developed specifically for this industry. What we’re learning from the spending issue above however is that media and entertainment companies need to start focusing on building intelligent enterprises—not just cool and exciting media arms. It’s time that they start to implement Enterprise Resource Planning to ensure higher efficiencies, lower spending, and more efficient work processes overall. That’s what digital transformation is here for! It’s time to stop limiting your interest to only the big and shiny, and moving it to the back of the house.
Top Digital Transformation Trends in Media: Smart(er) Personalization
Reports show that 40 percent of Millennials and Gen Z’ers are willing to pay for personalization done well. They want the deeper engagement that digital transformation done well can provide. As we head into 2020, I think we’ll see companies turn inward to figure out what content they’re actually good at creating and which audiences they’re connecting with on a deeper level. From there, I think we’ll see more niche communication and content development geared toward those audiences, rather than the content free-for-all we’re seeing now. Of course, this means a greater increase in AI and machine learning to draw out those connection points so that we can understand our audiences even better.
I want to be clear: when I say “smarter personalization,” I’m again not just talking about content recommendations. I’ve personally received numerous email and mail campaigns from certain cable companies asking me to subscribe … when I’m already a subscriber. It’s time for the industries to clean up their databases and make smarter outreach. As a technologist by trade, I’m likely to cut off service from someone who doesn’t even know I’m a customer than sign on to more services! 2020 will leave no room for messy communication and CRM. It’s time to use technology for what it’s meant to do: bring us closer to our customers.
If there’s one thing Netflix’s shocking subscriber loss taught all of us is that no one can coast their way through digital transformation. Even those who helped disrupt their industry need to be vigilant when it comes to personalization, content development, and spending. There is no relaxing for media and entertainment this coming year. If nothing else, it’s a time to regroup and get serious about using technology not just to excite our fan bases, but to make smarter and deeper connections with them.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
The original version of this article was first published on Forbes.
- What IT Leaders Need to Know about CDP Adoption - July 6, 2020
- 4 Actionable Customer Experience Statistics For 2020 - July 1, 2020
- If Intel Lost Apple as a Customer, it Would be Good News - June 22, 2020