The digital world has turned the broadcasting industry upside down. Media companies need to deliver the best individualized experience to every consumer, in the moment and all the time. Yet, customer expectations are far ahead of delivery. So far ahead, in fact, that broadcasters need to completely reinvent themselves as digital video consumption has gone viral.
More and more consumers are turning to smartphones, tablets and other mobile and Internet-connected devices and services to watch video. Significant shifts are underway in how Africa’s Entertainment and Media (E&M) companies compete and generate value, as the quality of the experience they deliver to consumers becomes their primary basis for strategic differentiation and revenue growth.
To thrive in a marketplace that is increasingly competitive and crowded, companies are focusing on implementing strategies and building capabilities to engage with consumers. This is according to PwC’s ‘Entertainment and media outlook: 2017 – 2021: An African perspective’ report.
The Outlook is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries (South Africa, Nigeria, Kenya, Ghana and Tanzania) and 14 segments: Internet, data consumption, television, cinema, video games, e-sports, virtual reality, newspaper publishing, magazine publishing, book publishing, business-to-business publishing, music, out-of-home, and radio.
The report further states that the E&M industry in Kenya was worth US $2.1 billion in 2016, up 13.6% on 2015. Revenue is forecast to grow at an 8.5% CAGR over the next five years, hitting the US$3 billion mark in 2020, and totaling US $3.2 billion in 2021. Internet access is the most established industry within the Kenyan market, boasting the largest revenues and one of the highest growth rates to 2021.
Kenya migrated from analogue to digital media, changing the media landscape drastically. Numerous adjustments are now being made in terms of advertisements and content development.
This switch to digital media has attracted both foreign and domestic investments in Kenya and the African continent as a whole. The trend of acquisitions and the establishment of new channels is gradually rising, attracting more investment. These investments are inevitably creating more competition and opportunities for diversified programming.
A new study by the IBM Institute for Business Value (IBV) and the International Broadcasting Convention (IBC), finds that more than half of the 21,000 consumers surveyed are using mobile devices every day to watch streaming videos, and that number is expected to grow by 45 percent in the next three years.
The study, “Creating a ‘Living’ Media Partner for your Consumers: A Cognitive Future for Media and Entertainment,” was released at IBC’s annual conference, and is based on findings from two studies. The first is the survey of nearly 21,000 consumers in 42 countries about their video consumption habits, and the second offers insights from 500 global media and entertainment executives about the impact of cognitive computing on their industry.
Globally, the study found that 51 percent of surveyed consumers — and 67 percent in emerging markets — access free, over-the-Internet video from providers such as YouTube, Facebook and Snapchat, while 48 percent access video through regular subscription services from traditional pay-TV providers.
Media companies can more effectively measure consumer sentiment by utlizing the latest capabilities to interpret and predict mass, niche and individual sentiment toward characters, shows and storylines.
In addition to this Media companies can become cost effective by automatically indexing entire archives or hundreds of simultaneous live video feeds and at the same time match content to demand which would in return cut production costs.
To accomplish this, Media companies need to embrace a comprehensive cognitive strategy. In fact, 92 percent of media and entertainment executives say cognitive computing will play an important role in the future of their business, something that our Kenyan media and entertainment companies need to consider.
The IBV and IBC recommend that organizations embrace the opportunities that the marketplace is currently presenting in three ways. They are:
1) Apply cognitive technology to achieve personalization. Cognitive applications in media and entertainment can help to deliver personalized, in-the-moment experiences to customers. They deliver insights to audiences and enriched content, as well as content prediction to create a compelling customer experience based on audience preferences, affinities and tastes.
2) Revamp infrastructure to meet future demands. By applying cognitive methods to both audience insights and content distribution, media companies can move from several hundred channels to several million “cable channels for one.” The transformation requires an architecture that scales automatically based upon predictions of audience demands.
3) Re-engineer business models to profit from the new media landscape. Emerging technologies, such as cognitive solutions and blockchain, may play a key role in the future. Industry leaders will be those who can institutionalize such capabilities as part of their Digital Reinvention efforts and focus their companies on investing in great content.
Over the next three years, the IBV expects consumers to increase the use of all types of mobile and Internet-connected devices for viewing video. However, the IBV also expects to see a decrease in the numbers who watch scheduled linear TV. Television’s popularity as an entertainment device is generally in decline.
Successful media and entertainment companies of the future will need to have a broad, cognitive strategy, in order to transform themselves into organizations that are capable of matching content to audiences.
Surpassing traditional data and analytics tools, cognitive solutions can unlock and interpret previously inaccessible data, yielding audience, content and contextual insights that can help companies to deliver compelling personalized experiences.
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