The Rise of Customer Experience in Media & Entertainment
By Oracle_Media-Oracle on Aug 30, 2013
What are the key market drivers behind the rise of Customer Experience (CX) in media and entertainment? Obviously, the digital transformation disrupts the traditional value chain - broadcasters and publishers
controlling their market - in four key ways:
- Consumers expect digital content to be delivered to all of their devices in an engaging way anytime – increasing the costs and complexity for the media companies
- Old revenue models are being impacted: reduced sales of physical/packaged media, and reducing advertising spend (part cyclical economy, part declining traditional audience) – these have not been replaced by equivalent digital revenues ("analogue pounds replaced by digital pennies”)
- Internet connected devices create the potential for a direct relationship with the consumer for the first time. The mostly-unrealised potential for those media companies that understand how to connect with the audience and create an engaging digital proposition
- New competitors and partners coming in to the value chain – e.g. Google, Facebook, Apple, Amazon, Netflix, Flipboard – these “digital native” players are capturing a large share of digital revenues at the expense of traditional players
On top of this there are specific changes in advertising – e.g. the shift towards automatically-traded digital online advertising which means data is an increasingly-valuable raw commodity.
Taking the “three Cs” the overall impact is:
- Consumer ... direct engagement is key to compete with digital natives and to grow digital ad revenues through data. Delivering a compelling, engaging customer experience is critical.
- Content ... alone is no longer enough and is becoming increasingly commoditised, but owning and managing great content is still key. Renewed focus needed on creating/managing truly multi-platform content, removing traditional platform silos. And increased focus on cost and efficiency of creating, managing and distributing content across platforms.
- Commerce ... two key revenues streams, media companies need to balance both. Advertising still depressed, but owning and managing data and direct consumer relationships key to increasing rates. Payment/subscription revenues not yet working in digital for many traditional players. Need to focus on the customer, and building models where the payment is for the value and experience the customer receives, not just “paying for content”.
So, not so obviously, within just a few years the media & entertainment industry becomes a highly competitive digital B2C market where customer, not content, is king. What it means? Many new challenges, but exciting times ahead to mix and mashup all those C's - content, commerce, community - into new compelling digital customer experiences.