Capitalizing and Controlling Content in 2020 (Part 2)
In this first part of this blog series, we looked at how direct-to-consumer (DTC) content relationships are evolving and the optimized infrastructure required to capture the connected consumer has significant complexity.
Now we look at the last two things the industry needs to know to ensure that it succeeds in this rapidly changing and highly volatile environment.
2. Attracting younger consumers into the entertainment retail content chain requires a new paradigm.
Back in cable’s heyday in the 1980s, households couldn’t wait to get their MTV. Technicians recall “truck chasers” running down the street begging them to install cable service right away. Some doubted that TV, which everyone was used to getting for free, (though subsidized through advertising), could ever be sold by subscription, but it emerged as a highly lucrative business model for decades. Now, with advances in mobile, video and wireless technologies, consumers enjoy an abundance of options for not just content, but also delivery method and device, while huge media, entertainment and technology competitors vie for their dollars and eyeballs.
But for all its volume and consumption, not enough has changed in how entertainment content is produced and marketed. The subscription cable model is still around, but it’s lost a lot of ground over the past three years to cord-cutting and competition from Netflix, Amazon and the like. And the pricing model for entertainment has stubbornly stayed the same. Studios are still pricing a home video download just like they do a DVD, and it’s not the same product.
Millennials – and Gen Z coming up right behind them – are used to IWWIWWIWI – I Want What I Want When I Want It. When it comes to entertainment, they don’t want to be forced to buy a bundle of networks or shows that they won’t watch. Additionally, they are used to enjoying and sharing with their friends an abundance of free content and short bursts of video. The notion of purchasing content, even if it’s long-form and has top-notch Hollywood production values – has to hold more value in their eyes than just a one-off transaction.
To successfully monetize your content from today’s younger consumers, you have to develop more complex, end-to-end solutions. Where do you find these consumers? How do you service them? How do you build a relationship with them? They expect a much more personalized, 360°experience. They want to be in control. They want to be rewarded for their business and their loyalty, with extended content, relevant experiential opportunities and related licensed products – games, t-shirts, action figures, etc.
In 2020, content providers, digital retailers, and operators that want to stay competitive and relevant must break away from the 30- and 40-year-old business models and design new end-to-end customer experiences that put the connected consumer in the driver’s seat. This means looking at pricing models that better reflect the way in which consumers now choose and value what they buy, use and share – look at Uber, Airbnb, and demand pricing for airline tickets.
Airlines, hotels, clothing stores, coffee shops – and movie theaters – all have loyalty programs and have had them for years, creating enhanced value
and presenting rewards, additional options for upgrades and purchases of related products, seamlessly along their journey. Why not Hollywood? Why not cable and satellite operators? Why not Netflix?
It’s also time for content creators to consider rethinking programming’s traditional time blocks, such as the 30-minute sitcom and the 60-minute drama. Many media companies are exploring alternative content formats geared to smaller screens and shorter attention spans. These include both short-form content (6-10 minutes in length) as well as extended formats that target binge watchers of serialized programming. All this content should be optimized for mobile devices, as according to a recent Cisco Report, by 2021, mobile video will drive 24 percent of all internet video traffic.
3. Embracing the “Realities” – Augmented (AR), Virtual (VR), and Mixed (MR).
While there is still some debate over how successful these immersive experience technologies will (or will not) become, the fact is, they’re here now, and innovative segments of the entertainment industry are moving confidently forward. The Void, which offers a “hyper-reality” experience blending AR, VR and sensory elements (wind, temperature) is working with Disney and will follow its first adventure, “Star Wars: Secrets of the Empire” in Anaheim and Orlando, with additional experiences and locations in 2019. Dreamscape Immersive, an immersive experience company backed by several major media companies and director Steven Spielberg, is pursuing an aggressive push into shopping malls and movie theaters.
The approaching broad-based deployment of 5G beginning in 2019 has the potential to make 2020-2021 watershed years for the growth of immersive experiences, particularly for entertainment but also for other applications such as healthcare and business. The new wireless standard will enable faster speeds and minimal signal latency in the home as well as in public venues. As prices come down for hardware, activities such as gaming, e-sports and experiential storytelling will become more prevalent, especially among Generation Z and connected consumers.
Imagine the concept of having unlimited seats in a stadium for a football game or a music concert, where you could extend the experience to someone at home. Studios, operators and retailers have tremendous opportunity to generate additional revenue if they begin to see the bigger picture and broader potential of their content in an increasingly immersive world. Start planning now to take your IP into new realms and deploying the systems that will enable the right licensing, data and content to effectively exploit the growth potential in the marketplace for maximum value.
2020 will be here soon, and the time is now to start preparing your company for the challenges and opportunities described above. The industry knows that doing business the way it’s been done for years simply will not work. The media and entertainment industry must combine the creativity that develops the amazing films and TV shows we love with a consumer-centric philosophy, giving careful consideration to the experiences offered, across multiple business models, personalization, better search and discovery based on contextual metadata, and embracing the new ways of immersive, experiential storytelling. Collecting and exploiting the correct data and converged automation are essential to your enterprise. This is required both internally among all your departments, and externally throughout the entire entertainment ecosystem. It’s time to connect the dots between the front end of the provider-user relationship, and the back end of the content value management chain to optimize your business now and for the future. The systems to allow this are already from Mediamorph. Rather than evolution, think revolution.