How much does a Slice of Life cost?- How Digital Media companies could build a prominent B2B offering
Introduction
How we choose to spend our time is of great importance to companies, because each leisure activity you could choose is a business opportunity. Humans as creatures of heightened sentience gravitate towards self-actualizing things to spend our free time into — things like music, movies, and games. So, it shouldn’t come off as a surprise that the Media and Entertainment industry is one of the biggest business spaces in the world, not just in the context of market size in monetary terms but also how much mindshare it occupies.
What we explore here as “Digital Media” in this article would largely be channels of Media and Entertainment that function on a digital backbone such as Music Streaming, OTT, Video Games and so on. Such businesses have so far raked in the money through consumer offerings and charging the end-users, except for the odd B2B partnerships on IP rights and brand placements but by the end of this read I would like to explore is there another way of monetization that Digital Media has been overlooking.
Minding the Business-Psychographics over Demographics to research markets in the 21st century
Ask any business student or business professional who would be the ideal customer(s) for a certain product or service, and you’ll find the most used metrics to define customer profiles would be a description of age, geography, income status, etc. which broadly fall under ‘demographics ‘. This is the most widely used lens of viewing markets and on the surface seems to be working just fine. But in the wake of 21st century, the democratization of information happened through internet and subsequently the rise of social media platforms and affordability of multimedia technology such as smartphones. This phenomenon blurred the line between habits and cultures as access to knowledge about lifestyles was now easily available and has visibly shaped the society in interesting amalgamations.
Thus, our biases on social segments based on demographic inferences is disconnected from the reality of the market and this dissonance is only accelerating making our known ways of market dissection more and more irrelevant. A simple example for this would be a fun team exercise asking people to define what are the characteristics of a bean bag customer. Chances are you would get responses that go “urban, millennial, upper middle-class income” etc. which aren’t entirely unwarranted.
But this line of thinking would hide you from the fact that a rapidly growing market for bean bags in India are rural villages (refer how this Karnataka village is transforming its local library: Local initiatives are spreading the magic of public libraries across rural Karnataka — The Hindu) and the reason is simple — Bean bag is a surface-agnostic piece of furniture and can be placed on any terrain. It is a matter of convenience which surprisingly fits the needs of a rural lifestyle. If the ideal customer for the bean bag was defined in a rather behavioral sense or “psychographics” (“Someone who would prefer makeshift comfiness over sturdy seats, someone who values mobility of furniture highly, etc.”) we would have a better chance in capturing these diffusions in segments, which could very well turn out to be an untapped market.
But there also lies the challenge in conducting psychographic research- where do you find the “how and why” of customer behavior. It is quite ambiguous, difficult to quantify, and hard to identify in each population, right? Well, as we become increasingly digital in each facet of our private and public activities, the data points gathered are becoming increasingly nuanced to the point of making more realistic demarcations of customers in a behavioral and psychographic perspective. While the field of social media marketing has been the leader of this phase, Digital Media could very well be nestling a dark horse without being aware of it …..
Mind over Matter-The rise of Digital Media
Over the span of just two decades, Digital Media has transformed from a niche to arguably the default way of consuming entertainment. Major types of Digital Media include videos, music streaming, podcasts, video games. While there are multiple factors that differentiate digital media from other forms, the key aspect of focus in this article is interactions.
Contrary to conventional media channels, Digital channels have the aspect of two-way data flow. When content flows on one side, the choices the user makes flow the other way.
As these ‘choices’ pile up across individuals, regions and time, the art of data science can make meaningful inferences from it. Of course, this is no secret given the well-known story of Netflix recommendation engine. Media companies that have truly embraced digital for their business models have become big repositories of data insights on consumer’s attitudes and views on morals, social issues, etc. based on the content they are attracted towards.
It is also no big secret on how digital media is always in the hunt for new monetization ways. The struggle of Netflix in recent times when it comes to subscriber retention and stable revenue has been a recent challenge as the firm is trying out various new pricing models, including a freemium ad-based model in collaboration with Microsoft. OTTs and other cloud-based media offerings have been in the cash-burning side of financial health as standalones (i.e. digital media offerings without the context of a group or investor backing) and are yet to establish a consistent bottom line.
While the usual digital media monetization has been in the space of consumer pricing (B2C models of business), the question here is perhaps there is yet another avenue of monetization to someone in a real need of it….
A Piece of Mind-How can Digital Media position as Consumer Insight companies in the B2B space
Okay, let’s maybe take a break and talk about something else- Brands. The key challenge that brands face in the current millennial market is balancing between a global image while also catering to regional sentiments and preferences.
By structure, brands deal with this by having separate regional brands which are identified as part of an umbrella brand. This method has varying degrees of success since it is not ubiquitously repeatable. While it works fairly for certain types of product businesses like retail-based companies owing to a clear difference of their offerings between geographies, it has always been a challenge to service-based companies. Even the geographic walls between product sellers are being broken down by the internet through third-party connecters and “drop-shippers” and the general flow of information across the world on what are the products available in different geographies.
Apart from this, Brand consciousness has become a big part of society’s purchasing choices since brands are seen as a projection of individual’s values and lifestyles. Thus, we see even bad practices by a certain company in a particular region having ripple effects on its brand goodwill worldwide.
There is also the added factor of hyperlocal and regionally close brands being preferred over brands that are global yet feel “distant”, and this comes down largely to the region-specific positioning and engagement strategy. Most companies do not understand how the consumers are segmented and how sentiments vary across these segments. India is a prominent case study in this regard as South India has distinctly separate tastes and preferences than, say North India or East. Understandably then, Demographic marketing is rapidly being replaced by psychographic understanding of consumer markets.
What brands struggle in, hence, are in understanding these nuances of people’s attitudes and morals based on their region. Currently, most of these insights are being led in-house by each company while also leveraging the help of emerging data-science based insights companies. The problem here is majorly the data set used by in-house analytics would largely be confined to the firm-generated data while outsourcing would depend more on open-source data or how much data the company discloses to them.
This is where Digital Media could enter and make a difference.
While viewed from the lens of consumer insights, digital media companies are far better positioned than conventional insight companies owing to their first-party massive repositories of consumer data with unique insights on psychographic details that are difficult to replicate by any other data collection method such as open-sourced surveys or other business-focused data collection. Consumer data repositories of digital media are untainted by the conscious bias of giving a survey and are derived more organically. They also capture the social psyche and how they vary across regions quite precisely. This could give it a strong competitive advantage in becoming the data insight providers to brands that are in need for assistance in strategic positioning based on regional values and sentiments and this could be used to explore a new revenue stream through innovative strategic partnerships.
Conclusion
This idea of using digital media for consumer insights isn’t new either. Look at the Amazon ecosystem. Prime Video is not just an OTT but also functions as a way for Amazon to derive what do people prefer in regions and use that to finetune their retail and other services. While such cross-sights are currently leveraged only by closed ecosystems such as Amazon, Google, Apple, it leaves the rest of the firms at a backfoot.
Thus, perhaps closely emulating these ecosystems in an open, collaborative partnership models could be mutually beneficial for the entire market. While Digital media can unlock a new revenue potential and strengthen inter-business partnerships that can pave way for future collaborations and synergies, the businesses that purchase these insights could also cater to the consumers better and focused and compete evenly against big tech oligopolies that exist in multiple markets.
Open-source ecosystems aren’t a new topic either. “Nothing” — The new consumer tech firm founded by former One Plus director and founder Carl Pei has openly stated as heavily leaning into this concept.
What the future holds for Digital Media to play a part in such open source ecosystems will be exciting to observe in the coming years.
S Lal Vasanth Rupan is a Business Consultant for Tata Consultancy Services in the India, Middle East & Africa regions and a part of TCS’ Strategic Leadership Program
