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Accenture Survey Finds Agreement on Direction of Digital Market

Media and entertainment companies are in broad agreement on the way the digital market is evolving, where the opportunities lie, and what will drive revenues over the next five years, according to findings of a recent Accenture survey.

Accenture’s 2008 Global Media Content Survey. —the third annual survey of more than 100 senior executives in the media and entertainment industry—examined the growth strategies of companies across the landscape of advertising, film, music, publishing, radio, the Internet, videogames and television.

Consensus on Growth

There appears to be strong consensus as to what will drive future growth: multiplatform distribution, short form video, social media / user-generated content, and advertising.

• Multiplatform distribution. When asked to identify the largest drivers of revenue growth over the next five years, two-thirds (66 percent) of respondents cited new platforms or new ways of delivering content — significantly more than the number who cited new content types (24 percent) or new geographies (10 percent).

• Short-form video. When asked which content type will generate the greatest growth, the greatest number of respondents — 38 percent —cited short-form video, with online portal/publishing second (23 percent) and video games third (18 percent).

• Social media and user-generated content are high-growth opportunities. Two-thirds (68 percent) of respondents identified social media and user-generated content as a high-growth opportunity, and more than half (56 percent) said they are already involved in social media in some capacity.

• Advertising. When asked to identify what they believe will be the number one business model in five years, nearly two-thirds (62) percent of respondents selected advertising-supported business models, compared with 25 percent who cited subscription-based services and 11 percent who cited pay-per-play services.

But Capabilites Lag

While half of the respondents said they know which capabilities they need to take advantage of in this new digital market, Accenture believes that many have a false sense of their current capabilities.

Sixty-six percent of the respondents have less than 40 percent of required capabilities, a number that is unchanged since last year’s survey, indicating that companies need to step-up the implementation of digital technologies or be left behind.

“We’ve asked for the last 3 years now how far companies are in their transformations to more of a full digital, end-to-end environment. And every year … the percentage of people who say they are a certain percentage along in their journey has been about the same,” says David Wolf, digital transformation lead at Accenture. “Which indicates to us that the further people get into it, the more they realize … how complex the transition to a full digital environment is.”

Digital is Pervasive

The study also found that even though a majority of content companies recognize the need to distribute content through multiple platforms, nearly one-third of respondents reported taking a “siloed” approach to digital, and most organizations are unprepared to meet the existing challenges in the market.

Wolf says a digital “group” within an organization is not what Accenture recommends today.

“Because digital is becoming much more mainstream and pervasive, it’s not sufficient to have a group that is focused on digital,” he says. “What we’ve advocated to some of our clients is that they actually have capabilities or roles within the organization that understand how to take the [digital] strategy and drive it through all of the various business units.”

And Social Media is Money

Sixty-eight percent of respondents agree that social media and user-generated content is a high-growth opportunity. In fact, 57 percent of respondents expect to see significant revenues from social media and user-generated content within one to three years.

But Wolf says it’s important to look at social media as one piece of the overall [marketing] equation.

“So, the question is, how do I create my content, and how do I have the right proposition for that content in mobile, how do I have the right proposition online, how do I have the right proposition maybe at the retail outlet or in the store, or via the television set, and what’s the appropriate proposition in a social media environment? Maybe it’s via the existing social media sites, maybe it’s via different types of social media offerings that are specific around a property or title. All of that needs to create an integrated, mutually reinforcing brand experience around a title and property that consumers want.”

Read more about Accenture’s Global Media Content Survey.

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