Monetizing Content in a Digital World: E&Y

06 Nov,2012


Excerpts from an Ernst & Young report titled ‘Monetizing Your Content In A Digital World’ which focuses on the changing nature of media and entertainment consumption and the impact that these trends are having on the digital strategies of Media & Entertainment companies. And more importantly, how these companies are (and need to be) tailoring their products and service strategies to meet the increasing consumer demands for content anywhere, anytime and in any form.


Media and entertainment technology manufacturers put the future on display every year at consumer electronics events around the world. In the past, it would take two or three years for a new version of a product to appear in the market. Today, some consumers, especially those belonging to Generation Y, expect the release of a new version within a year.


The debate in television technology has moved from plasma versus LCD to on-demand and then 3D. Netbooks are ceding ground to eBook readers and tablets that deliver the latest in information mobility.


In India, internet broadband, which till now has constrained digital content consumption, is at an inflexion point. The launch of 3G services and the eventual launch of 4G are expected to bring a ‘late surge’ in wireless-based broadband adoption. In conjunction with the country’s mobile phone user base of over 900 million subscribers, the potential reach of wireless broadband in the country is enormous.


The rapid adoption of technology and broadband is bound to have a profound influence on the behaviour of Indian consumers. Much more than moving from physical to digital media and from mass to targeted entertainment, consumers will expect access to content anytime, anywhere and from any device at their disposal.


Farokh T Balsara,    Media & Entertainment Industry Leader – Europe, Middle East, India and Africa

Technology is fundamentally changing how and where consumers access content, fragmenting audiences and revenue streams. M&E companies are now searching for new ways to monetize products and services and are now developing multiple paid content strategies that focus on value for the consumer. In India, with the expected surge in mass broadband adoption, launch of 3G services and the imminent 4G services, the scale and impact of potential digital content consumption is enormous…


Raghav Anand Segment Champion, Digital Media, Ernst & Young

As distribution gets digitized, content choice for the consumer increases manifold leading to fragmented media landscape. Successful digital monetization in a fragmented landscape depends on sharp customer targeting, providing enhanced value in entertainment experiences and seamless integration of targeted advertising micropayment mechanisms. Media owners who rework their business models based on these parameters will be valued in the future.


This is expected to create both opportunities and challenges for Indian media and entertainment (M&E) companies. As far as opportunities are concerned, they will have a variety of new channels to create and distribute content. But they will face challenges in maintaining and rebuilding customer relationships that are being fragmented by an array of new platforms and devices.


And then there is the challenge of solving the monetization puzzle. M&E companies will have to devise new strategies to monetize their growing digital audiences. Here, the Indian M&E industry is in a unique position to learn from the experiences of its global peers. M&E companies in mature markets are inventing new products by unbundling and repackaging content to create bundles of differentiated content, solutions and services that consumers value with their time and money.


They are also beginning to offer personalized on-demand content – microcontent – that creates a series of microtransactions across a growing number of distribution platforms, for which robust micropayment systems that are secure, cost-effective and user-friendly need to be developed.


Indian M&E companies have an exciting opportunity to develop digital businesses that cater to a new generation of broadband-empowered digital media consumers, and learn from the experiences of their global peers. This report provides insights into how M&E companies, abroad and in India, are reinventing themselves to meet the ever-evolving demands of the “connected” consumer.


When it comes to accessing information, consumers have more choice than ever before. Since the 1980s, there has been increasing acceleration in the proliferation of technology devices designed to inform and entertain, as well as the underlying platforms that support them.


Globally, digital media platform penetration rates have nearly quadrupled in the last five years alone. In 2010, the Ernst & Young digital media platform saturation index was estimated to be 0.4 for global households.


By 2013, the Ernst & Young index will reach 0.67 of global households, illustrating the rise of multi-platform consumption.


Taking the risk

The scale and impact of the potential for consumption of digital content in India is enormous. With the rollout of 3G (and eventually 4G) services and the country’s huge mobile phone subscriber base, Indian M&E companies have an incredible opportunity to develop digital businesses that cater to a new generation of broadband-empowered digital media consumers.


However, seizing these opportunities will require new thinking about how M&E content is created, packaged, distributed and sold.


M&E companies must develop ways to differentiate themselves through a branded customer experience strategy that offers premium content and services to their customers. This enhanced value will come from four key dimensions – format and additional content, timing, availability and interoperability, and sharing and engagement. Using one or more of these dimensions will not only help to create new digital revenue streams, but will also go a long way in strengthening digital price points.


But content alone will not suffice. To succeed, M&E companies will need to research consumers’ general media-spending habits, both online and offline, to identify patterns between their media-consumption and media-spending behaviour.


However, even the best laid plans can fail if the infrastructure and processes of Indian M&E companies are not up to the task. They must build world-class infrastructures to support their digital initiatives. They also need to put in place IP management systems that manage contracts, rights and royalty agreements, along with digital supply chains that make digital content easy to store, search and exploit throughout the enterprise.


As Indian M&E companies begin developing creative ways to generate digital revenues, they are likely to launch products before they have built the operational infrastructure processes to support them at times. This period, from idea to execution, creates significant risks of error and inefficiency.


Points to consider


o Understand how changing technology and consumer shifts are reshaping your sector(s), and how these changes may increase your company’s vulnerabilities.

o Realize that business models – even digital ones – require constant modification.

o Experiment with new platforms; waiting until a new platform has a viable business model may be too late.

o Continue to invest to staying ahead of changing consumer demands, even during lean financial times.



o Be relevant to consumers by accommodating their desire for interactivity, mobility and flexible pricing models.

o Continue to enhance the digital experience to give consumers a reason to pay for access or content.

o Use the four dimensions of value – format and additional content, timing, availability and interoperability, and sharing and engagement – to increase the attractiveness of your products and services to the consumer.

o Conduct a thorough revenue and margin analysis of the revenue impact of unbundling content.



o Build IP management systems that encompass the entire lifecycle associated with managing contracts, rights use and royalties.

o Deploy a rights management system that knows which content can be used when, where and in what formats.

o Automate rights systems to increase speed to market and decrease risk of contract violations.

o Focus on digital supply management to ensure that media assets can easily be found and distributed across media platforms.

o Increase data capture to support new business models and drive decision-making.


Direct-to-Consumer (D2C) models

o Understand how a D2C model impacts your business and that of your current value chain partners.

o Acquire the skills and competencies required to develop deep knowledge of customers.

o Understand the metrics in consumers’ digital ‘footprint’ that matter the most.

o Collect demand trends on a multi- platform basis.

o Use digital feedback loops to become aware of and gain an insight into consumers’ preferences to make changes in products, pricing and marketing strategy.

o Innovate continuously despite the risks.


Courtesy: Ernst & Young Media and Entertainment practice (—Entertainment)


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