Contributed By Mr Shekhar Purohit – Ceo, TalentNext.com
To survive the rapid transition to a direct-to-consumer future, companies across the Media and Entertainment (M&E) sector need an effective fan-centric strategy — or risk decline and irrelevance.
Despite a record number of film releases, 2016 was a mixed year for the industry, which compared to 2015, will be lower by 5-10% in collections, primarily driven by poor content but also by the demonetization of the currency in the past two months. We saw digital platforms such as Viral Fever, and Culture Machine again take market share from TV and films as Indian millennial are becoming a larger driving force for better content development as more and more content is being consumed in the “third screen” than all other screens combined.
Additionally, there were a few other trends and launches in 2016 that will pave the way for the future.
- Aggressive use of social media, specially, Twitter and Facebook, in particular the emergence of Facebook Live;
- Global entrants and local emergence of multiple OTT platforms (e.g. Netflix, Amazon Prime, ALT, Voot, Hotstar) that offered original programming based on a deep understanding of the demographic served by a particular content genre;
- Alliances and formation of new content companies that will create and promote cross-border content;
Many of these developments foreshadow the industry’s rapid transition to a direct-to-consumer world, where most content will remain the same — at first, anyway — but the packaging and distribution will change significantly. Specifically, the expansion of digital technology, manifested in more ubiquitous fixed and wireless network connectivity enabling growing numbers of connected devices and new routes to the user, is altering the industry’s structure, driving new ways to produce, distribute, and monetize content across its landscape. Creators can more readily pursue opportunities outside traditional studios and distribution channels. Consumers have far more content to choose from, available to them at any time, in any mix, through many more delivery options and devices. In every corner of the industry, empowered users are gravitating to brands, experiences, and platforms that are differentiated as much by the quality of their curation, customization, and convenience as by the quality of their content.
If you are an executive in the M&E industry, your formula for success is already shifting radically. No longer is it enough to develop content solely to attract eyeballs, seeking the largest audiences possible for advertising and subscription revenues. Now, you must create fans: active users united by shared ideas, interests, and experiences, who will return every day to your brands and properties. As a fan-centric business, buoyed by the loyalty of passionate users, you will command substantial strategic advantages. You will know more about who your users are, what they want, and how to deliver what they want. This will enable you to monetize your products and experiences more effectively and more broadly. Current fans recruit new fans. Best of all, fans spend more per capita and are less likely to churn.
In every M&E sector, disruptive companies are racing against incumbents to drive fan value — to be the first to deliver what users want, perhaps even before it is clear they want it. In 2017, the pace will accelerate. Any companies hoping to join the fray will need to be better than the competition at locking up fan engagement, loyalty, and spending, and at investing in efforts that drive fan value.
Here are a few predictions for 2017:
- “All Things Live”: With the emergence of Facebook Live in India, content being delivered on a real-time basis.
- “Mobile Shows”: Telecom operators such as Airtel, Vodafone, and Jio will start creating their own original content
- “SVOD Overload”: We will be “overwhelmed” by too many SVOD offerings in the market; can they all survive? Will all types of original programming be successful?
- “Exhibition”: PPP (public, private, partnerships) will emerge to significantly expand the number of cinema screens we have; for the film industry to thrive, this must happen and the government needs to be involved.
- “Digital Influencers”: Digital influencers will be become major players for driving and delivering new content on television and streaming platforms;
- “Year of VR”: Virtual reality will become a key factor in driving audience engagement
- “Shorts”: Especially with Millennials—an interest in shorter forms of content such as serialized web and YouTube segments that are a mere six to ten minutes in length will emerge as the primary form of messaging
- “Win the App War”: While the screen space is dominated by social media, messaging and games — and limited available real estate on mobile device home screens — the fight for users among M&E companies will be brutal, and critical as outside of messaging and social media, entertainment apps in India have the highest usage
- “Digital to Physical Experiences”: As fans spend more time on their digital devices, they feel more personally connected to their favourite artists, stars, athletes, and fellow fans — so much so that they crave more live, direct interactions with them. Live events in India must grow quickly, and this has a direct implication on monetizing digital entertainment or media relationship through ticket sales, merchandise, sponsorships, and advertising.
The winners and losers in this coming fan-centric, direct-to-consumer world have yet to be determined. What is clear today is the list of requirements for success: attributes that will excite users — more customization, control, and perceived value — and distinctive, habit-forming brands and experiences that turn commodity eyeballs into devoted fans. Transitioning to a more direct-to-consumer world will not be easy for many media companies. Existing capabilities need to be reimagined to stress content development, user insights, digital distribution, fan management, and mobile advertising sales, as well as app design, data science, and new business models. This will require sustained senior leadership and greater investment in content, technology, and experience. It will mean making tough decisions regarding brands and businesses not associated with a meaningful fan base. Given the rapid speed of change in India, we need to move now.