Campaign India Team
Apr 18, 2024

Legacy media companies need to go where they haven’t gone before to survive: Accenture study

Accenture's latest report finds that more than 35% of consumers in India struggle to navigate between different entertainment services, apps and devices—with relevant content discovery being a key factor.

Legacy media companies need to go where they haven’t gone before to survive: Accenture study

Nearly 65% of consumers in India are cancelling and resubscribing to services based on the availability of desirable content, up 2% from last year.

This is just one of the many challenges facing the traditional media companies that have been highlighted by Accenture in its third annual Reinvent for Growth” global entertainment study. Accenture surveyed 6,000 consumers across 10 countries including India, to assess the impact of reinvention strategies on media and entertainment companiesability to succeed financially and strategically in an increasingly challenging industry.

While the media industry is growing, the industry players are not, taking the value somewhere else. “Incremental actions taken with a survivalist mentality will not help media companies thrive in the future,” said Neeraj Sharma, MD and lead for Accentures media industry in growth markets.

According to the Accenture’s Media Thrive Index, launched as a response to the findings of the study, it is time for radical strategic moves.

Companies must navigate three key challenges: The first—traditional media sectors foray into the streaming arena, aimed at capturing a slice of the digital pie, has not delivered desired rewards. Instead, these moves have contributed to the deteriorating economic health and accelerated a splintering media landscape. This shift complicates content discovery for consumers, turning what should be an enjoyable, seamless search into a cumbersome chore. More than 35% of consumers in India said that they struggle to navigate between different entertainment services, apps and devices. Content discovery continues to be a challenge as 72% consumers in India said that the recommended content did not match their interests.

This growing customer dissatisfaction has given rise to a new phenomenon—the serial churner. This group demonstrates fluctuating brand loyalty, cyclically subscribing to and unsubscribing from platforms as their content interests evolve. Nearly 65% of consumers in India are cancelling and resubscribing to services based on the availability of desirable content. This is a growing trend.

Second, traditional media is rapidly losing customers, experiencing a critical exodus that signals a looming danger. Globally, consumers increased their time spent on social media (52%), social video (52%), and video games (50%), spaces where legacy media companies have little to no footprint.

And highlighting a seismic shift in entertainment preferences, two-thirds of consumers in India said they regarded user generated content as equally entertaining as traditional media, signalling a competitive upheaval in the quest for audience attention. In all scenarios presented to consumers, such as when I want something funny” or when I want to relax,” social media and social video platforms were consistently picked over streaming video services as the media of choice.

Third, new entrants such as Amazon, Google/YouTube, Apple and Microsoft are investing heavily in streaming, gaming, and live sports. Their deep pockets enable them to offer an alluring mix of free content, exclusive perks, and competitively priced subscription services that traditional media is hard-pressed to match.

For instance, Reliance Jio in India is extending into streaming, and a wide range of products across connectivity, news, books, movies, music, payments, groceries, devices, education, health, and financial services.

The study found opportunities for media organisations to expand beyond traditional content offerings, including aggregation platforms and lifestyle bundles. A majority (89%) of consumers in India said they would be inclined to use a single app to access all their digital services across both media and non-media categories. Additionally, Accenture projects lifestyle bundles to reach $3.5 trillion in consumer spending by 2030 with technology brands better positioned currently over traditional media brands to be the creators of these bundles.

Among over 50 strategic alternatives evaluated by Media Thrive Index, only those considered ‘radical’ on the media reinvention scale managed a high ranking.

This stark revelation highlighted a clear path forward: for legacy media entities to flourish in both financial and strategic realms, adopting the most audacious strategies is not just beneficial—it's imperative, according to the report. Said Sharma, “For media companies, the need of the hour is to place big bets, go where consumers want to be while exploring new avenues of growth, redefining new roles in the entertainment value chain, and tapping new sources of revenue.”

 

Source:
Campaign India

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