Digital technologies have caused a revolution in the way that businesses operate, and no industry has seen a bigger impact than media and entertainment.
From the outside it’s easy to see how the internet and streaming has caused a massive shift in the way that media companies sell their products, but a new report from Econsultancy and Adobe investigates the internal marketing and strategic challenges created by digital technology.
The vast majority (97%) of media companies surveyed acknowledge that digital has disrupted their sector, with around two in five (44%) seeing themselves as very much part of this disruption and leading the way.
This compares to an average of less than 20% across all sectors, as revealed by separate Econsultancy research.
The report, entitled Impact of Digital Transformation in the Media and Entertainment Sector, is based on a global survey of nearly 200 media and entertainment executives based mainly in North America and EMEA.
Here’s a summary of four key trends identified in the report:
1. Digital is only just getting started
The research shows that though most companies have laid the groundwork for their digital strategies, some big challenges remain.
Media companies are ahead of other industries when it comes to securing executive buy-in and resources, as more responding organisations describe securing executive support as ‘not a challenge’ (23%) than a ‘huge’ one (14%).
However, around half of organisations surveyed perceive processes and systems (53%), understanding technology requirements to grow digital revenues (52%) and compatibility of multiple vendor solutions (49%) as either ‘huge’ or ‘significant’ challenges.
Additionally, the media and entertainment sector is not immune to the skills gap, with over a quarter (27%) of those surveyed saying that the ability to utilise technology to its full extent is a ‘key challenge’, while another 39% see it as a ‘minor issue’.
2. Media companies have to build a culture of experimentation
Agility, a test-and-learn mentality and willingness to experiment are among the key tenets of digital transformation.
The research has found that only four in ten companies surveyed claim that they are ‘driven by data and experimentation’.
Additionally, agility is a key concern for two-thirds of media companies, with nearly a third (30%) of respondents saying they’re not agile enough to be ‘effective given today’s fast-changing consumer access choices’.
How does your organisation regard the following challenges as it continues for second half of 2014 and into 2015?
3. Not having an integrated structure is a key stumbling block
An integrated structure is perhaps the most important element in the quest to tackle digital’s disruptive forces head-on and is most indicative of a digital-ready organisation.
Achieving an integrated structure requires significant change in multiple areas of the business, from compensation and reporting lines to how teams are created and how executives collaborate on strategy and shared goals.
The research found that cross-functional alignment is a challenge for the vast majority (93%) of media companies surveyed, with two-thirds (66%) perceiving it as ‘huge’ or ‘significant’.
Encouragingly, more than half (53%) of respondents say they have an understanding of top-line business KPIs. This indicates that a large proportion of media and entertainment companies have a clear view of what they are working towards, and potentially don’t have a siloed structure that typically causes problems when communicating their vision and strategy.
4. Media sector is still in the early stages of data-driven marketing
Often touted as a key requirement for organisations of all shapes and sizes, having a holistic view of the audience plays a particularly important role in the media industry.
It allows organisations to identify the most valuable segments, optimise their engagement and then sell that value along to advertisers and brands.
Media marketers appear to struggle with utilising data to inform marketing decisions, as utilising data and analytics to make marketing decisions is a ‘huge’ or ‘significant’ challenge for over half (55%) of companies.
To read the full findings, download the Impact of Digital Transformation in the Media and Entertainment Sector Report.