Hello Dave,
Reinvent San Francisco
Mood: Overwhelmed 09:30
for growth
Media strategies for an atomized,
multidimensional landscape
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connecting Hello,
The shift to direct-to-consumer (D2C) The forces that have brought the industry to this
streaming has been a tough but critical stage of evolution are twofold.
necessary move for traditional media
One is a marked shift in business models where
businesses. But it;s far from the end ofrevenue has supplanted content as the key factor.
their digital journey.The second is consumer dissatisfaction with their
current media experiences.
In fact, it’s probably closer to the start. Put bluntly,
streaming has not delivered the rewards thatTaken together, they point
media companies expected. What was seen as the to the need for reimagined
rescue device to keep traditional media afloat may
now be dragging them down.entertainment ecosystems.
So, is this a crisis? Perhaps not yet. But things can’t In this paper, we explore how media
go on as they are for much longer. And if theycompanies can move to profitable growth by
don’t adapt, some media companies look set to helping consumers get everything they want
find themselves losing relevance (and a market for (and how they want it) in an increasingly
their services) within the industry’s rapid andatomized media landscape.
unforgiving evolutionary momentum, in which
only the most adaptable survive.
Reinvent for growth: Media strategies for an atomized, multidimensional landscape Copyright (c) 2023 Accenture. All rights reserved. 2 Growth slows, competition intensifies
Streaming content directly to35% of consumers In addition, content costs have spiraled up at
consumers has not, as a business unsubscribed from at least onethe same time as media companies have made
model, lived up to its billing – and itsof the “Big 5” streaming video- considerable investments in making the move
to streaming. Those costs have not been met
performance continues to decline ason-demand services in the lastby proportionately rising subscription
multiple services compete for the 12 months, and 26% say that revenues.
same share of wallet. they plan to cut one or more in
the next 12 months.
What’s more, competitors with diversified
business models and other principal sources of And with the average number of SVOD services
revenue are expanding their market share. They each consumer now has hitting more than 10 in
12
are using the power of entertainment to the US, three times as many consumers (20%)
capture consumers’ attention and spending. feel that this is too many compared with those
who believe they have too few (7%).
The signs are clear. The subscription video on
demand (SVOD) market saw slowing growth in The market is no longer rewarding growth in
2022, with far fewer new sign-ups. subscriber numbers. It’s switching attention to
In addition, churn rates are up.profitability – Netflix’s share price, for example,
has fallen by more than 50% from its high in
October 2021.
Reinvent for growth: Media strategies for an atomized, multidimensional landscape Copyright (c) 2023 Accenture. All rights reserved. 3Hey Matt
20:30
London
Then there’s growing
Mood: I want to distract myself from competition from extremely
worrieswell-funded tech sector
players who are making money
from entertainment indirectly.
In other words, they’re
harnessing the power of
content to attract and retain
consumers’ attention in order
to generate revenue from
other sources such as
ecommerce or devices.
Reinvent for growth: Media strategies for an atomized, multidimensional landscape Copyright (c) 2023 Accenture. All rights reserved. 44 4 8
The biggest players here, like Amazon, AppleApple, for example, valued at more than two
and Google, have vast revenues and operatingtrillion dollars, could acquire any one of the
5
cash flow from non-streaming products and many SVOD businesses now competing for
2
services that give them other ways of engaging eyeballs, and it would barely register on the
and profiting from consumers. balance sheet.
Look at the bundle from Amazon Prime, which, So even if they’re not making
to drive profits in ecommerce, offers a range of money from video directly, tech
next-generation media services: streamingplayers are profiting from the
(Prime Video), video gaming (Twitch),
higher audience engagement
audiobooks (Audible), music (Amazon Music)
with their other bundled
and photos (Amazon Photos). Moreover,
Amazon, Apple, and Google are playing hard to products and services and
win at the next level of the video value chain – streaming service aggregation,
streaming service aggregation. without having to play by the
traditional financial rules of
As powerful onramps to connected TVs, TV/film distribution or even
operating systems like Google TV ortoday’s streaming economics.
accessories like the Apple TV or Amazon
Firestick, these non-traditional competitors in
the media space are playing a complex game.
And with market capitalizations of $1 trillion+,
they dwarf their competitors in traditional
media.
Reinvent for growth: Media strategies for an atomized, multidimensional landscape Copyright (c) 2023 Accenture. All rights reserved. 5