Shekhar Purohit speaks about the continuous Improvement in M&E Technology
Although the media & entertainment industry was among the first to digitize its products and services, most M&E businesses don’t consider themselves to be digital leaders. Established players need to use their early momentum to pivot to new business, operating and technology models in which digital not only permeates the front office but is also infused into the middle and back offices, powering innovation and efficiency across the value chain.
Talkies. Cinerama. Betamax. DVDs. Napster. Kindle. Netflix. MP3s. Augmented reality (AR). Virtual reality (VR). Whatever the delivery mechanism du jour, media & entertainment businesses have been grappling for decades to leverage technological advancements to innovate their platforms.
The examples are legion. The “small screen” of living room TVs supplanting the “big screen” of movie theaters, and then the “mini-screen” of mobile devices eclipsing both. The expanding reach and market value of gaming, with universities in the America’s and Western Europe now offering e-sport scholarships. Amazon’s swift emergence as a major studio and content creator. Facebook’s hyper-personalized ad-serving. Netflix’s data mining to finely tailor content offerings to customer tastes.
Yet, even though M&E companies were among the earliest adopters of advanced digital technologies, it’s as if they’ve only just begun. Some would say they’re experiencing the “second half of the chessboard” conundrum, in which an exponentially growing factor begins to significantly impact business strategy (akin to doubling the number of grains of rice on each of the 32 squares of a chessboard). If the industry once thought that digitizing its products and services was the endgame, M&E players now realize they’ve only made their first few moves.
In the spectrum of disruption, different segments of the M&E industry are at different points of maturity. The onslaught of change has arguably ushered in a golden age of television, a resurgence in documentary film making, an uptick in quality journalism, and bold new immersive experiences in gaming. Opportunities to increase revenues, tap new markets and beat the competition lurk everywhere. At the same time, it’s getting harder to discern the “clean bright lines” of the various M&E sectors, especially when every headline grabs at our attention, and every tweet is clickbait. Just keeping up with these changes, let alone setting a direction for the work ahead, is a full-time job.
To better understand the pressures facing M&E businesses and the progress they’re making on adapting for the future of work, various market research studies have found that with their running start, and despite the critical business challenges of heavy consolidation and profit pressures, M&E organizations are now poised to expand their digital mastery across their business, operating and technology models to significantly impact market performance.
Beyond the front office, where consumers have been treated to digital products and services from M&E providers for the better part of two decades, the middle and back offices are the new digital frontier. Consider that in early 2018, Netflix released the latest film in the Cloverfield series to a rapturous reception from fans with no advance warning, save for one commercial during the Super Bowl, just a few hours prior to release. That’s a media game-changer, all at the push of a (very sophisticated) digital button. More out-of-left-field moves like Netflix’s will rock the operating models and organizational alignment of all players in the industry.
At the same time, market research shows that more than 95% of M&E companies would not characterize themselves as being digital leaders. This is a shocking admission that requires urgent action if these businesses are to master digital for business success.
Even for those in the middle of the pack, it is critical to learn how to achieve the best return on their digital investments, in order to overcome the lack-luster growth and profitability challenges of recent years. To enable the agile innovations required to compete, M&E players need to invest now in technologies such as artificial intelligence (AI), blockchain, and AR and VR, and develop the processes necessary to experiment rapidly and move on to new initiatives if the expected benefits do not materialize quickly.
We believe as the markets evolve that five keys trends will continue to play a pivotal role in the coming years in M&E organizations as they expand their digital efforts beyond the customer interface:
Technology spending will increase by more than 50% in the next few years. Generally, Most M&E businesses plan’s call for a technology spending of about 10% of annual revenues today. This will jump to 15% in 2023, which is somewhat less than other industries as technology has always played a role in M&E. Most organizations believe that mobility will have the greatest impact, with the use of wearables rising, especially in gaming (92%). AI, AR, VR and blockchain are all expected to play important roles.
True M&E digital leaders – those with an integrated front- and back-end, and strong digital growth and innovation – are rare and will emerge as the leaders of the industry, which may come from industry sub-sectors, such as gaming, cable and advertising. For this to rare movement to occur, M&E businesses need leadership with a growth mindset.
War for Talent: Again. The path to digital leadership rests on coupling talent to a strategic vision. Digital leaders exhibit a variety of common behaviors, such as building a culture of innovation, instilling a customer-focused vision, rewarding “intrapreneurship” and defining leadership roles. Although it’s important to stay ahead of the technology curve and continuously innovate products and services, digital sprinters recognize that with the right culture, processes and team, the other pieces will fall into place.
Customer Experiences: “Entertainment” will give way to AR- and VR-powered “experiences.” Rather than passively seeking to be “entertained,” consumers will soon demand immersive experiences powered by AR and VR. All M&E sectors plan significant AR/VR adoption by 2020. M&E businesses will need agile IT systems and flexible processes to deliver compelling experiences – and to create new ones when the whims of consumer desires shift.
Complete connection of the entire value chain: End-to-end operating models will connect the customer experience to middle- and back-office processes. Integration of front-, middle- and back-end processes is a hallmark of digital maturity – a level that few M&E companies have yet achieved. The payoff of end-to-end integration is the capacity to deliver on-demand content, tailored to the platform, location, language and format of the consumer, and personalized to consumer preferences, behaviors and needs, globally, in a profitable fashion.
The holy grail is to be able to convert all five of the key trends above sequentially that will lead to leader a better ROI on your technology spend tomorrow than today.
(Shekhar Purohit is the Co-Founder and Chief Executive Officer (CEO) of TalentNext.com Entertainment, India’s leading online discovery platform for the entertainment industry and the founder of Dapper Don, India’s first on-line fashion and styling portal).