This is what Dr S Raghunath, IIM-B Professor for Corporate Strategy and Policy said in Pickle-CII BIG PICTURE SUMMIT 2014 special edition
How to create, deliver and capture value in the evolving landscape of information and communication technologies, Dr S Raghunath, IIM-B Professor for Corporate Strategy and Policy, shows the way.
Never before in the history of media and entertainment industry has costly content been so easy to reproduce, re-purpose and distribute . Therefore the focus is on IP value management rather than just IP protection and the creation of digital security format which enables interoperability between devices.
From an era of one way delivery of public content like feature films in movie theatres and soap operas on television and two way delivery of private content like telephone based conversations it has expanded to include multiple ways of delivering content that provides connectivity to private conversation in public domain about public content.
Therefore the central question of monetization is how to create, deliver and capture value in the evolving landscape of information and communication technologies.
There are several challenges to be addressed: moving from medium specific content to content that is available in formats compatible with multiple platforms. There is increased interdependence of communication systems as opposed to stand alone broadcasting of content triggered by the use of multiple devices for accessing content . Then there is a difficult relationship of top down corporate culture and evolving bottom up participatory media and entertainment culture.
Access to audience through the internet has also changed the supply scenario for entertainment content. Amateurs are joining the galaxy of established professionals as producers of content. Crowd sourcing has given rise to more experimentation and aggregation of capabilities. Media is no longer a mere object of consumption, it is a medium of utilization. Earlier media and entertainment content was a product produced by professionals for the consumption of amateurs. It is now the connection between experimenting amateurs and established professionals with a wider global audience. For example, an average of one hundred videos are being uploaded on YouTube every minute, Twitter receives more than one hundred and seventy five million tweets a day.
With availability of free content, advertising has to become more creative about what products consumer want with free content . Advertising is different in the digital media as it is about one on one interactive communication with audience.
The good news is that a personalization software app , a machine learning system can set up a detailed profile of every person’s interests and then match the digital inventory of content to find exactly what the person wants. It then can provide TV programmes or a set of movies which exactly fit whatever a person finds interesting. Therefore the phenomenon of digitalization has turned entertainment content into information goods.
Data analytics facilitates transformation of entertainment content for mass market to thousands of niches made economically feasible by digital delivery . The evolving technology of delivery allows focused distribution to individual consumers.
The individual consumers using a device or a collection of devices now connect and interact with social network through these devices. The preferences of the individual can be identified and shared across devices giving rise to a never before opportunity of personalizing not only entertainment but advertising that pays for the entertainment. The same individual’s presence on multiple devices along with the ability to pay for the experience provides new opportunities for developers to create applications that link to entertainment as well as the social network.
However, increasingly affluent segments of audience population are preferring to watch premium programming content that eliminates advertising. Therefore the insertion of the commercial products within the scenes of the content and the story line will find favour with corporate sponsors resulting in such product placements in feature films and television content.
The laptops, smart phones and tablets have not displaced traditional distribution systems such as televisions from living rooms. The difference is that today people continue to watch television but they do so also through their tablet or smartphone.
In our country,internet penetration is estimated to cover fifteen per cent of the population. A Nielsen survey indicates that the highest penetration for mobile Internet is in the age group of 15-24. This has its implications for advertising and e commerce and there is an emerging preference for quality content.
However, low quality content will continue to mushroom with improving technology and increasing access to the internet . This is likely to bring a decline in the average content quality. However, the range available would result in clear demarcation of better content and best among the rest . Uncontrolled access to variety of content will lead to self selection of the best which will benefit society at large though it has access to a wide variety of junk.Thus the only mass curator for content will be the instant people response.
The collective shaping of what we believe and watch is going to be done more and more by amateurs creating a visual image. Digital content is turning into a massive cloud of evolving ideas, always in dialogue, influencing opinion with every voice contributing to it.
In this scenario, Big data analytics will provide enough indications about soap operas and characters stirring interest and emotions in specific regions or locations. Virtual delivery of content also will increase the appetite for live stage performances. Live performances in those locations will generate higher revenue. The smartness of senior managers in media and entertainment companies is in orchestrating mass marketing campaigns once specific artists are ready for a significant marketing push.
It is not just the urban localities which have the potential to pay for live performances but there are also street theatre companies mushrooming and growing in rural areas. Performers are speaking, singing or dancing in a language that the audience can appreciate, relate to and make an emotional connect. As the range of sophistication levels of audience widens over time , so do expectations relating to enjoyable entertainment.
If yield management geeks have their way, companies could charge a little more certainly for Saturday night or weekend live staged performances.
Live show producers can begin relying on computer algorithms to recommend the highest ticket prices that audiences are likely to pay for each of the available seats at every performance in the theatre for performing arts.
Live performance shows can employ dynamic pricing system to raise seat prices during heavy holiday weeks . So entertainment companies must reach the level of sophistication achieved by airline and hotels continuously using their algorithm to calibrate prices based on demand and ticket purchasing patterns.