The future of entertainment and media looks “fan”-tastic
As user experience becomes the driving force in global entertainment and media, those companies that are adept at building, activating, and monetizing fans will emerge as the industry’s leaders. Entertainment & media (E&M) businesses today — from feature films to sports teams, video games to scripted series — simply cannot thrive without the economic, social, and emotional power of fans.
This is a perspective that I am discussing throughout this week at the Cannes Lions International Festival of Creativity. Among 15,000 of the world’s most innovative, talented, and creative business executives, the fans are out in full force. A year ago, we called it a “dramatic shift” in the formula for success — the imperative to create a fan-centric business. In a matter of months, it has become even more pronounced.
E&M businesses designed around, and for, fans command multiple strategic advantages. In today’s hypercompetitive environment, these companies know more about who their users are, what they want, and how and where to deliver it. They recognize that their fans spend more, are more loyal and will recruit tomorrow’s fans. They realize that in an increasingly Darwinian and direct-to-consumer environment, only the “most wanted” brands and experience will win. There is just too much competition for users and their time to allow E&M businesses to survive on experiences that cater to casual “eyeballs.”
E&M companies need to orient themselves around fans. To become fan-centric, E&M companies need to build stronger functional capabilities in five key areas:
- User/fan insight: Understand the functional, emotional and social behaviors of users that translate into habitual, passionate and loyal usage and, ultimately, fandom.
- Content & experiences: Prioritize initiatives that super-serve fans — deepening engagement while extending the brands and franchises associated with passionate fans into new areas.
- Distribution: As social media, mobile devices, and streaming become a larger share of consumption, E&M companies have to adapt to ensure they are building and strengthening their fan bases. For many players, this means developing not only powerful owned and operated showcase destinations, but also designing experiences on partner platforms.
- Monetization: Companies with fan bases have to be able to capture their premium value effectively, and selling fans has different requirements than selling eyeballs. Companies have to become more sophisticated with respect to data, technology, and sales structures to monetize their fans smartly and at scale wherever they are.
- Operations: The highest performing E&M companies will tightly link their revenue and cost agendas. Does it make a difference for fans? Typically, not everything does. Answering this question has to be the starting point for making changes to company operations — and reallocating resources to where they do make a difference … for fans.
Every E&M business today wants growth. A major market opportunity exists for those players that can become truly fan-centric. Following fan passions creates a natural pathway to identifying new revenue opportunities. Take the example of live events. Ample market data suggests how much millennials prioritize live experiences over physical products, and indicates that they are spending more time and money on them.
Millennials are also more likely to be drawn to live events when they are powered by recognizable content or brands from a favorite TV show, video game, sports team, magazine, author, or musical artist. Why? One dominant reason is that live events are sharable experiences on social media, and play into user desires for recognition and influence. The resulting connections and communities can translate into multiple monetization opportunities for the companies that create the experiences and activate the fans.
Even in a period of disruption, some realities endure. The most valuable constituents in the E&M industry remain the active, loyal, and passionate fans. Yes, technology has empowered them — giving them more control, choice, and convenience than ever before. Yet these users continue to reward their favorite brands with a disproportionate share of their time and spending — because these brands’ experiences deliver unique emotional connectivity, attachment and affinity in a world of massive media supply.
Focusing on user experience will be a game changer for our industry. It is exciting to see its future potential on display this week in Cannes. You can find an in-depth analysis of the key functions needed to make E&M businesses “fan”-tastic in my recent strategy+business article. For more on where the E&M industry is headed, check out PwC’s Global entertainment and media outlook 2017–2021.