The pandemic has drastically changed the way media is consumed globally. Social distancing and whack-a-mole lockdowns have forced our work and social lives to transition online, leading to a sudden surge in media consumption across the at-home segments of television, gaming, and over-the-top (OTT) media platforms.
On the contrary, physical media production has suffered a steep decline during this period. Trends induced by the pandemic, such as unprecedented changes in consumer behaviour and media platforms acting as conduits for virtual experiences, have resulted in a major paradigm shift. The shift is forcing the industry to understand its dramatically changed economic reality in order to paint a very real picture of what lies ahead. Those who were ready with digital platforms and e-commerce channels have survived, but the laggards have almost vanished.
The physical impact of the crisis is hindering many M&E segments, and the economic impact has led to an unprecedented decline in revenue for theatres, publishers, studios, broadcasters, and other physical outlets. Advertising revenue will likely return as the economy recovers, but with significant uncertainties around what will return and the form it’ll take. With consumers re-examining how they live and work, the move to robust could-enabled platforms, mature direct-to-consumer (DTC) connections, and innovative content is evermore in demand.
And who knows, the ‘nostalgia effect’ might even create a return for physical goods in the future. In the brief period when the lockdown eased, people flocked to the shops and malls after proclaiming the doom of retail stores!
Data-driven content
Content creators and distributors face pressing decisions which will dramatically affect the M&E industry for years to come. During the crisis, movie studios made new titles available directly to video-on-demand (VOD) and streaming services. VOD distribution may be a simple short-term solution, but the impact on the future of movie theatres could be catastrophic. With easier accessibility to the latest films at lower prices and convenience, consumer habits may be altered forever, not only changing the physical reality, but also the way we think.
As streaming usage explodes, the need to activate DTC models couldn’t be more urgent. Organisations are striving to accelerate their IT transformations and modify business models to enable a shift to DTC distribution and sales, using customer data. Netflix has already set an example by developing data-driven content based on consumer viewing habits, preferences and desires, and has proven that enhancing the creative process using data analytics is key to maximise market reach. Netflix has recently shocked the M&E world once again by launching the first ‘TV channel’ in France. The decision is driven by insights into consumers who prefer a ‘lean back experience’ - where they don’t have to choose shows.
Or consider music and book publishing companies, who are undergoing a major strategic shift in their business model, from the traditional B2B business model to the DTC approach. Being able to rapidly meet and address audience needs is crucial. The M&E industry needs to accelerate efforts to enhance the audience experience using advanced data, analytics, and artificial intelligence (AI) to aid more granular insights and segmenting. This is an opportunity to capture more data around usage and engagement to deepen relationships with consumers, enabling people to get access to what they want, when they want, and how they want it.
Building strong and sustained engagement now, will help substantially once the economy recovers. This will deliver greater value to consumers, but also enhance advertising, such as data around who is watching what, and improve financial returns, for example from understanding what content is more popular and cheaper to produce. It will also create more cross-sell opportunities by offering end-consumers the merchandising and personalised offers, based on their interests.
Adopting lean technology for flexible production and processes
The sudden surge in working from home has led to the circulation of high-powered tech equipment to people’s homes and decentralised the use of hardware and software, completely shifting the paradigm of production processes. With DTC and working from home demand higher than ever, producers need to make do with less and still produce rich and engaging content. Creative teams require the freedom and flexibility to turn vision into reality, but spending must be carefully monitored and controlled to ensure that overspend is eliminated and profits are maximised, now more than ever before.
Producers need to continue exploring new and non-traditional content production formats and structures, while also racing to accurately manage budgets and cash flow, an already exceptionally difficult task. This will increasingly include ‘digital sets’, comprising of home filming via smartphones and webcams, and moving away from traditional standards.
But to manage budgets and cash flow, businesses need the right tools for greenlighting, financial control, and real-time budget vs spend visibility to make prudent choices. Our deep experience in the media industry has enabled us to address these key pain areas for our customers and has helped us to build unique solutions, made available in a cloud environment, substantially reducing the total cost of ownership (TCO).
User-generated content, virtual production capabilities, real-time collaboration platforms, along with augmented reality (AR) and virtual reality (VR) will become important for success in the M&E landscape. Technologies such as, CGIs, VR and AR will continue to be experimented with in the post-pandemic world as the demand for emerging markets - home entertainment, immersive experiences, confluence of TV and video games (take The Witcher for example) - will only continue to grow.
Diversifying delivery for a global audience
OTT platforms have already torn down the traditional walls for audience reach. Large markets like India, China and Latin America are drawing up a spotlight. As the success of Hotstar has shown, there is money to be made in these markets with the sheer number of audiences to be reached. It’s no wonder these emerging markets are taking a centre stage in the strategy for other giants like Netflix, Disney+ and Amazon Prime. The key is to achieve the right price point, deliver the right mix of local and international content, and create scalable systems to meet increasing demands.
The other advantage, these markets also serve as the source for the content. With changing consumer habits, such as ‘one season a weekend’, there is constant pressure to release new content. Dubbing and rehashing regional content allows the OTT players to fulfil this demand, while the current pandemic continues to pose challenges for creating new content.
One of the most effective ways to tap into this opportunity could be through partnerships. The aftermath of COVID-19 will necessitate partnerships like never before.
The need to partner up and thrive, to monetise content by working with brands who value the same message and target audience, will grow rapidly. Having systems in place which can not only handle this sort of change but also grow through it is paramount if businesses want to succeed. The M&E industry has only been scratching the surface of global collaboration over the last two decades.
Disorder, disruption and uncertainties are rare opportunities for creative industries to implement overdue changes to traditional tools and practices, which will be demonstrated in the content produced and result in greater distribution and diversity globally. Aggressive IT transformation will help M&E companies compete by taking better advantage of the technological disruptions of the past two decades, while unearthing new opportunities, capabilities, and experiences to expand revenues and enable an ‘anti-fragile supply chain’.
Watch our on-demand webinar to learn how we helped BBC Studios to fully automate their revenue recognition process. Our M&E experts enabled the business to reduce laborious manual tasks significantly, automate financial postings, and improve the accuracy of revenue reporting.