How Digital Transformation is Transmuting the Media and Entertainment Industry?
The digital transformation in the media and entertainment industry (M&E) is accelerating exponentially. For the industries to succeed today and in the future, media and entertainment marketers have to understand the profound shifts taking place in the industry.
A recent study by Accenture shows that the media and entertainment industry is losing money right when they need it most. Around 81 percent of the media and entertainment industry believe that they would exceed their 2018 Opex budget. With an increase in Opex spending, media companies’ spending is falling right off the cliff.
Understanding the reasons behind this downfall is important to make the media and entertainment industry survive. Apart from the above-mentioned, various other challenges are affecting the media and entertainment industry and paving the way for new technologies.
The current state of digital transformation in media
Before the pandemic hit the world, PwC predicted that about 62 percent of the estimated revenues in the global M&E industry were expected to be generated in 2023. The majority of the industry’s revenues are occupied by digital shares.
Digital disruption with new technologies is changing the medium of operation of the media and entertainment industry. Marketers should lean into digitization and should be willing to experiment to keep their place in the industry. In the year 2018, the expected number of TV viewers in the United States was expected to drop below 297.7 million and the number of OTT viewers was expected to increase to 198.6 million.
The opportunities that are presented by digital growth are one of the best gifts given to the media and entertainment industry. According to recent statistics, China is crossing the United States when it comes to growth in the media and entertainment industry.
It is quite evident that digital transformation, on one hand, is sweeping the media off its feet, and on the other presenting several opportunities for this industry. With the digitization and invention of new technologies, the time spent by users on mobile technologies has increased from 1.6 hours a day to 3.3 hours a day, making a room for mobile app devel0pment in the media and entertainment industry.
Another trend that defines the current state of digital transformation is that smartphone data consumption would overtake the data consumption of fixed broadband, and in countries where technology has not reached its saturation point, the future of media and entertainment marketing is digital. Talking from the back 90s, the M&E industry has witnessed many drastic changes. This flowchart would help you understand better:
Surprisingly by 2023, the media industry marketers would allocate about 50 percent of the budgets to the digital advertising sectors. Media and entertainment industries are spending a large number of their budgets on making their websites more appealing and online presence more visible.
According to Gartner, this financial focus is consistent with the industry-wide push to websites to provide people with rich, responsive, personalized experiences.
Hence, keeping up with the digital transformation of the consumers is important for the survival of the M&E industry. While some of the organizations are looking for ways to adapt, others are still struggling to land the initial leap.
Digital transformation trends in the media and entertainment industry
1. D2C Video Streaming
During the initial phases of the pandemic, video streaming witnessed a boost worldwide. As people were forced to stay indoors, they demanded more diverse and quality video streaming content. This change also brought up a downfall in Pay-Tv subscriptions for US customers.
Over the top, platforms such as Netflix, Hulu, and Amazon prime offer a great diversity of choices to customers which they haven’t had before. This trend has also resulted in a war on top streaming websites. Disney was the first streaming website that retracted its content from Netflix and offered it to another D2C channel through Disney+.
2. The role of Artificial Intelligence
Due to the rising competition between OTT platforms, the media companies are facing the dilemma of upgrading their media content. To attract more consumers, media companies are adopting new technologies such as Blockchain and AI.
Every organization today, which is aided by AI and machine learning has the power to be smarter about how they’re spending. Moreover, AI tools help to create personalized content for users.
3. Personalized content
This is the era of personalization. Many music based and audio streaming organizations are successful because they provide personalized content to their viewers.
This chart would help you understand how personalization is everything:
Gen-Z and millennials are willing to pay even huge amounts for the personalized content. Streaming websites such as Netflix and Amazon Prime are successful and even attracting more audiences because they pr0vide personalized content.
4. Role of Blockchain in the media industry
Blockchain technology has powered many businesses and brought up innumerable benefits to enterprises. Transparency, authenticity, and proof-of-content are some of the biggest advantages provided by Blockchain technology. The introduction of Blockchain technology in the music and entertainment industry can bring about great transformations.
This disruption can revamp the media and entertainment industry systems of pricing, revenue sharing, and royalty payment systems. Payment transactions with Blockchain can be less expensive, and through predefined smart contracts, the allocation of profits can be automated.
5. Focus on enterprise
Digital transformation is the need of the hour when it comes to media and development due to rising consumer demands. Technologies such as AI and Blockchain have been developed specifically for the media and entertainment industry.
This industry needs to focus on building enterprises that are intelligent, just not cool, and exciting media firms. Media companies need to start implementing enterprise resource planning to ensure high efficiencies and low spending.
In conclusion, digital transformation is the need of the hour for the media and entertainment industry. As the competition and need for efficiency for this industry continue to rise, digitization becomes important for the industry. New technologies fuel innovation, and are a survival tool these days.
From personalized content to the advent of technologies such as Blockchain and AI, the trends for the media and entertainment industry are show-casing a positive future for the industry.
Ignoring the disruptions brought up by the latest technologies such as Blockchain technology in the media and entertainment industry can cost your enterprise a massive loss.
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