I recall that 30 years ago, you could count all the television channels with your fingers in one hand. So a typical family usually watched one chosen program every evening. That was the era of limited options via limited media, i.e., print, radio and TV.
Nowadays, the dad can be watching basketball on cable while the mom, a Korean telenovela on TV; the son may be watching the Game of Thrones on the computer; the daughter, Asia’s Top Model on iPad; and the youngest, Nickelodeon, also on cable. New media technology—including the social media, music streaming and the gaming industry—now offers numerous channels and choices on a multitude of devices.
According to John Gleeson, our partner in Grant Thornton Dublin, “the media industry is in the grip of a technological revolution, and it’s affecting every part of the business.”
“Distribution models, commissioning procedures, revenue streams… they are all evolving as the industry responds to the shift to digital and personalization,” Gleeson added.
With digital media, there is a mountain of data, information, advertisements, and even trash, making it often difficult to find, sift through and digest meaningful content. Without compelling quality and relevant content, audiences move on. The shift is easy, considering that there is a wide range of channels, platforms and media to match individual whims. This, in turn, leads into some form of personalization.
Gleeson asserted, “It’s all about content. There’s a huge demand. And while this is good news for content providers, it does have its downsides, putting creators under enormous pressure to come up with the goods. Distributors don’t have it easy, either. They need to be sure that their content supply is secure and that they are getting the most out of it.”
Content relevance is in the eyes of the beholder, or the user.
However, in this age of social media, content is usually measured by how much it is shared. And, for it to be shared, most would say that the content has to be interesting, entertaining or useful. Therein lies the challenge: to make sure the content continuously piques the interest of people and engages its audience, yet stays relevant.
Ambitious companies solve their content challenges by expanding; the most obvious effect is an increase in media merger and acquisition (M&A) activity. That means production companies acquiring content creators and content providers are buying distributors. And we’re not just talking about just one or two deals here: this vertical integration is happening in remarkable numbers.
This observation is shared by Hanno Hepke, partner and head of technology, media and communications at Warth and Klein Grant Thornton in Germany.
Hepke said: “The accelerating digitalisation of the media industry is entirely reshaping the industry structures: content owners and producers enter distribution; distributors create or acquire content companies; customer access companies, whether telcos and network companies, e-commerce players or hardware players, use their access to the consumer to push content services; publishers increasingly recognise the importance of ‘moving images’; and advertising money has definitively taken the digital path. The winners in this race will bring the right content in the suitable format, on the appropriate device suiting the users’ current usage situation at the right price.”
To bolster this, Gleeson said: “Figures show that between January and March in 2016 there were nearly 130 deals in the global media sector, equating to around 40 deals a month. With the comparatively limited number of players in the industry, this is a surprisingly large amount of consolidation. Something big is going on.”
In the Philippine setting, local telcos (PLDT and Smart and Globe) are partnering or investing in content providers (such as ABS-CBN and TV5) as part of their individual strategies to address the demand of their customers for mobile digital content.
With new technologies, multiple devices and demand for personalization, it inevitably comes down to content. Tailoring it. Delivering it. And above all, monetizing it. Demand for content is shaping the media industry before our eyes. And with that kind of power, content is still king, indeed.
Jessie Carpio is a partner and head of BPS/Outsourcing. He is also the president of P&A Grant Thornton Outsourcing Inc., an entity wholly owned by P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory and Outsourcing firms in the Philippines, with 21 partners and more than 800 staff members. We’d like to hear from you! Tweet us: @PAGrantThornton, like us on Facebook: P&A Grant Thornton, and email your comments to email@example.com or firstname.lastname@example.org. For more information, visit our Website: www.grantthornton.com.ph.
As published in The Manila Times, dated 01 March 2017