Transformation of Media Companies

According to Accenture research and a panel discussion at the 2008 Accenture Global Convergence Forum, media companies need to take four critical steps to be a winner in the-next-generation-media-industry:

• Focus on strengths and use them across multiple channels
• Understand and get to know B2C and B2B consumers better
• Give existing workforce and new talent as much autonomy as realistically possible.
• Get the cost base right.

While an exciting future may loom on the horizon, there are major challenges around strategic execution, the panelists said. In the “age of execution,” the potential to relate to and engage with B2C and B2B consumers is more profound than ever before. Media companies must be prepared to change much more and much faster than in any other time in their recent history.

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Proliferating technology is enabling ubiquitous media. This, in turn, is facilitating the shift in consumption habits and content participation and creating huge growth opportunities for media companies.

Media companies will need to transition from analogue, offline delivery to integrated, file-based, digital enterprises. Media companies that want to survive are well-advised to start their path toward it today if they have nor done so already.

But turning around media organizations is a huge, and typically slow, undertaking. To learn more about how prepared the industry is to make this transformation and take advantage of industry change, Accenture interviewed more than 100 of the world’s top media executives.

The research results show that two out of three industry organizations have less than 40 percent of the capabilities to complete the transformation successfully and become a true digital, high performance business. And this statistic is likely overstated.

32 percent of respondents generated less than 10 percent of their 2007 revenues from nonlinear consumption (downloads and on-demand broadcasts, for example). And only a small minority—9 percent—have broken the 25 percent barrier.

A critical component of enabling transformational capabilities quickly and effectively is an integrated multi-platform. About 63 percent of respondents said they are pursuing a three-screen distribution strategy—using TV, online and mobile. However in doing so, at least 30 percent of them are using a completely siloed approach, which has been shown to result in low customer satisfaction and lost revenues.

An integrated, multi-platform, value-creation-network capability will help media companies find new ways to reach consumers, to be more valuable for consumers, to respond to how and where they access media and make digital content available to consumers whenever and wherever they want it. The panel saw this as the largest growth driver for content companies over the next five years. It would appear, then, that the media market is no longer characterized by the big eating the small but the fast eating the slow.

David de Boer, Head of B2B Marketing, Sanoma Uitgevers, The Netherlands