This post summarizes the initiatives presented in Digital Transformation of Industries, a white paper released by the World Economic Forum. This is the second of a series of three posts that further examine subjects covered in the research report Discoverability: Toward a Common Frame of Reference.
It’s become commonplace to state that the media industry has been confronted for many years with complex challenges. As pointed out in the World Economic Forum’s white paper titled Digital Transformation of Industries: Media, Entertainment and Information, these challenges have taken form through successive waves of innovation and transformation.
From the first wave—launched by the birth of Napster and online file transfers—to the current wave, characterized by the exploitation of content, user- and use-generated data, the industry has experienced a whirlwind of changes.
This whirlwind’s main components are known but reminders are always appropriate: the increased importance of millenials; consumers’ new behaviours and new expectations; the increasingly thin line separating editorial content, advertising and manipulation; the popularity of amateur content (YouTubers); the importance of the consumer experience quality; security, privacy and trust issues; processing big data; and real-time content management.
After presenting a portrait of the context and its challenges, the report analyzes three concepts that will influence how the media industry evolves over the next ten years:
Personalization and contextualization
The overabundance of content will force creators and distributors to produce ever increasing quantities of personalized content and advertising while learning to navigate in complete transparency through the meander of data security and privacy issues.
Advertising in particular faces a major challenge with respect to personalization. As pointed out in this series’ first post, people today are at best interested by advertising and at worst totally hostile to it. This is especially the case among millennials.
Online personalized advertising—which continues to track consumers long after they have lost interest for a given search object—may become particularly intrusive and irritating.
Seeking forgiveness for these youthful mistakes, the advertising industry will need to make more intelligent use of technology tools and demonstrate both creativity and innovation in raising awareness of a product’s or service’s benefits without resorting to publicity.
That explains the existence of branded content, professional blogs, expert articles and other strategies that are used to foster conversations on a product. Or yet, as proposed by the World Economic Forum, why not adopt “advicetising,” i.e., advertising that offers personalized advice. However, the report points out that, despite the progress made in this regard, there remains a lot to be done to convince consumers that branded advice is not self-interested or that their emotions are not being manipulated for commercial purposes.
As far as personalized content is concerned, platforms that collect content also have everything to gain from a recommendation engine capable of earning consumers’ trust and providing unbiased recommendations.
Finally, the World Economic Forum estimates that media content personalization and contextualization will end up migrating to the physical environment. It’s what the WEF refers to as ‘phygital,’ digital media integrated in the physical world, in particular in retail and live events.
In-store purchases shall result from ‘connected’ sales, i.e., sales facilitated by an online interaction (video, special offer) with the consumer during his in-store visit or yet again through ads sent to the smartphones of fans attending the Super Bowl.
Whereas the volume of content has exploded, the number of platforms, devices and media outlets available for disseminating this content has increased exponentially. Media companies must therefore learn to juggle with unprecedented challenges.
The number of online streaming services continues to increase. The World Economic Forum foresees the arrival of ‘OTT 2.0,’ i.e., synchronized main-screen and second-screen services, somewhat like what Shazam does for music. These 2.0 services will harmoniously combine action and information, interactions with social media, the opportunity to purchase derived products, etc. In addition to issues involving rights, regulations and contracts, OTT 2.0 will not become a reality before certain technological constraints are overcome.
For an industry whose business model depends mainly on the sale and exploitation of broadcasting rights, this content fragmentation in the digital space has shaken up the intellectual property field and intellectual property rights themselves. On a global scale, many users do not understand—or do not want to understand—the artificial scarcity that is created by laws, regulations and contracts in a context of overabundance.
In addition to the revenue lost by the industry due to the unlawful viewing of copyright protected content, the use of a virtual private network (VPN) skews the analysis of fundamental data in the intention of measuring the impact of an advertisement or a service.
Partnerships and industrialization
In this fragmented world, partnerships become increasingly important strategic assets. This is especially true of co-creation initiatives with audiences which are today facilitated by technology. The digital transformation underway also suggests that media companies acquire full control over technology tools and learn to strike a balance between creativity and the industrialization of digital processes.
In the future, media companies will need to transform themselves into organizations that are at once flexible, light, agile and able to quickly adapt to the evolution of both technology and consumer habits. To succeed, they will absolutely need to recruit the right talent, namely by calling upon fields such as technology that were once far from the media universe. Media companies will also need to encourage diversity in general and generational diversity in particular. As we can read in the World Economic Forum’s white paper: “Creative teams will need to think and speak in native digital terms.”
Finally, data will form an essential component of tomorrow’s media company. Data will preside over a form of industrialization of the content creation. Data processing will be industrialized such that data collected from multiple sources (e.g., social media, behavioural and personal data) are systematically used to produce predictive analyses, which in turn enable production studios to select the best scenarios, improve them based on major trends and set budgets based on revenue projections.
However, a word of caution is in order: as the industry adopts this type of approach, the risk of producing a ‘sea of similarities’ presenting predictable narratives and characters to bored audiences will increase. Tomorrow’s media company will need to systematically integrate a human touch and call upon its teams’ imagination, experience and intuition to create content that is both original and unique.
By taking into consideration the time required and the complexity of these media company transformation phases, the World Economic Forum estimates that they will deploy themselves over the next five years. Timelines extend from at most three years in the case of personalized advertising to more than six years to industrialize the creative process.
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