Digital transformation has become a new buzzword that opens brand new opportunities to both market leaders and startups in each and every industry. According to the recent study featuring the World Economic Forum, digital transformation and the active use of technology will open up a huge $100 trillion market and will stand behind 30% of all revenues.
While the digital revolution gives new opportunities to business, it brings new challenges too: it forces industry players to be on the constant lookout for emergent trends and welcome change to be ready to keep up with the Joneses.
FTP Software, a global leader in IT consulting, is sharing its view on the digital transformation in Media & Entertainment and the mistakes that make companies fail in this quest.
Digital Transformation in Media & Entertainment
The media and entertainment industry has been really responsive to new technologies and the shares of its digital revenues have been rising year to year. According to the PwC Global Entertainment & Media Outlook for 2019-2023, digital revenues now account for more than half of all industry revenues and this figure is yet to increase in the next five years to 60% and more.
Source: PwC Global Entertainment & Media Outlook 2019-2023, www.pwc.com/outlook
The heavy impact on technology on media and entertainment can be also seen from looking at the top 5 industry segments with the largest annual growth rate that gradually diminish the impact of traditional TV, newspapers, and consumer magazines. These are:
- OTT video
- Internet advertising
- Video games and e-sports
- Internet access
Media and entertainment digitalization follows a distinct path: it making consumer experience more personalized, responsive, immersive and uninterrupted with nasty ads.
Digital transformation in media and entertainment is making consumer experiences more rich and personalized. FPT Software had a chance to contribute to this trend by developing a meta-data recommendation system that allowed the client’s 20 million subscribers worldwide be served entertainment content that fits their preferences most.
Media and entertainment is no longer something people passively consume. Users are already used to giving responses to information and video content and affecting its distribution through ratings and shares. Now, they are also given the right to manage their preferences and even decide how your favorite series should end.
The media content is becoming not only more personalized and responsive but also immersive, VR being the fastest-growing segment of media and entertainment. This means the number and complexity of solutions for gaming platforms and mobile VR experiences will continue to increase. What’s more, live broadcasting is expected to leverage VR technologies such as 360-degree cameras too to provide seamless experiences for those watching global news.
Paid media advertising has always been a main source of revenue for media and still powers up free entertainment solutions. However, as users are getting more and more annoyed with ads, they are increasingly eager to pay for the subscription and ads-free consumption of digital content. Notably, the subscription economy is not limited to platforms like Netflix or Spotify – the shift can be seen industry-wide, including e-commerce and written media.
Why Now Everyone Can Make it Happen
Unfortunately, not all companies are able to meet the requirements of a transformed market and fail with digital transformation. Through many years of IT consulting, we have seen many reasons for that. Although each company is unique, the common challenges that do not allow companies to transform can be grouped into the following themes:
- Resistance to change. Some companies find it hard to let go of old technology and practices and continue to support it even it becomes outdated and unprofitable. They are suspicious of innovations and prefer to make only cosmetic changes without changing the business models as such.
- Poor management culture. Sometimes, management makes digital transformation in media and entertainment doomed for failure from the very beginning. This happens when the management fails to define the goals of the company or the agreement stages take too long due to the lack of compromise and the absence of effective decision-making practices.
- Poor technological solutions. A mature company that is ready to embrace digital transformation can still fail to do so is the technological solution does not meet the industry standards in terms of quality and security. This is why the choice of an IT consulting partner is so critical.
FPT Software has experience and resources to handle digital transformation in media & entertainment of any complexity. Contact us to gain expert insight on your transformation goals and set out to deliver winning media and entertainment products and services.