The report concludes that radical reinvention is critical to the lasting success of media companies.
Accenture announced the launch of its “Media Thriving Index” to assess the impact of reinvention strategies on the ability of media and entertainment companies to succeed financially and strategically in an increasingly challenging industry.
The Media Thrive Index is a response to the findings of Accenture’s third annual ‘Reinvent for Growth’ survey of global entertainment, which surveyed 6,000 consumers in ten countries, including India, on their media consumption behaviour. The study highlights a complex landscape of challenges facing traditional media companies where marginal strategies will not restore them to economic or strategic health.
It evaluated 50 different strategic reinvention options identified from a range of company-launched initiatives and from Accenture’s own strategic analysis. The assessment found that most options so far are modest adjustments that do not materially change the company’s economic profile. Only radical moves point the way for legacy media companies to secure the solid financial footing needed to thrive and sustain success.
For example, Sony Pictures rejected the idea of becoming a direct-to-consumer (DTC) streaming service to focus on producing and selling content to major streamers in addition to revitalizing its portfolio to include video games. This, as the parent company is also making a bold move into the electric vehicle market. The New York Times is gaining new strategic and financial strength through a portfolio of offerings that include consumer applications for audio/podcasting, sports, cooking, shopping and gaming.
Key findings from the survey highlight some of the challenges facing media organisations:
Tired of surfing – More than 35% of consumers in India say they find it difficult to navigate between different entertainment services, apps and devices, while 72% say recommended content does not match their interests. The survey revealed that 57% of consumers have increased their time spent on subscription video on demand (SVOD), but also 26% of them indicated that time spent on linear television (non-sports) has decreased since last year.
The report mentions that “Companies like Amazon, Google/YouTube, Apple and Microsoft are investing heavily in streaming, gaming and live sports. Their diversified revenue streams give them a safety net that pure-play media companies don’t have. Their deep pockets allow them to offer an enticing combination of free content, exclusive benefits and subscription services at competitive prices that traditional media can hardly match.”
In addition, Walmart and Reliance Jio in India are expanding into streaming and a wide range of connectivity products, news, books, movies, music, payments, grocery, devices, education, healthcare and financial services (in addition to delivery services, care for the car, travel and fuel). Social media company X, formerly known as Twitter, is also evolving its offerings, adding video, Gen AI and financial capabilities with the goal of becoming a “super app.”
Batch agitators – Nearly 65% of consumers in India cancel and re-subscribe to services based on the availability of desired content. In 2023, 63% of consumers in India canceled more subscriptions compared to the previous year.
Big tech companies are now pioneering lifestyle packages, such as Amazon’s Prime membership and Apple’s Apple One subscription, that increase their market power and strategic advantage. They support consumers’ lifestyles with services such as free shipping, grocery delivery, video and music streaming, photo storage, video game streaming, and pharmacy assistance.
