Today we take a dive into the media industry to see how innovation and disruption are currently changing the landscape of business. From digitalization to the explosion of freelance resources, the media industry is being impacted from almost every direction. And this is only the beginning. Major trends are influencing the direction of media, so expect some additional shake-ups in the near future!
Knowing Your Industry
To truly understand the path of the industry today, we need to evaluate the major technology trends that are currently impacting it, and have the potential to do so going forward.
Major Trend 1: Mass Digitalization
Digital will replace print — it is inevitable. The cost of technology continues to drop, and the devices used to digest media are getting more advanced and convenient. The historical barriers to this transition (generational preference, convenience, ease of use) are slowly breaking down. Once they have crumbled enough, the tide will wash over the old and clear a path for the new. Companies need to make digital delivery their primary focus, and their print operations disposable, or saleable.
Major Trend 2: Freelance Mania
With companies like outsource.com, upwork.com, contently.com and others, finding freelance writers, photographers, editors, and designers has never been easier. Companies managing a full bench of talent are finding it harder and harder to compete with the companies that are strategically using freelance talent. The media companies that can take advantage of this framework can keep costs much lower, and profit margins higher.
Major Trend 3: Content, Content, Content
I don’t think it’s hard to see the radical increase in online content production. This tidal wave of new articles, videos, shows, publications, networks, etc., is becoming more and more difficult to keep up with. Additionally, the barriers for new media companies are now very low, with plenty of distribution vehicles available for new entrants. It is only a matter of time before these new players will deliver the same high quality content as the existing media giants. Even companies like Red Bull have started to encroach the space. Seven years ago this would have seemed absurd.
Major Trend 4: Video Technology Is Rapidly Advancing
Consumers of content are now looking for quick and easy ways to digest information, which has led to increasing demands for video-based delivery. Combining this with the rapid progress of HD, 4K, 8K and VR, and there is now a huge opportunity for truly immersive content. We are still years away from mainstream adoption, but entertainment companies are already finding some success with the new technology.
Major Trend 5: Generational Shifts
The times they are a-changin’ — there are plenty of articles that explore the multitude of changes coming with the millennials taking over as the dominant economic powerhouse, previously owned by the boomer generation. But for media, this switch will be felt much more harshly. Millennials treat information and content much differently than other generations before them. They were brought up with more information they could ever possibly need, all within instant reach. This overexposure has caused them to be extra cautious of anything written by professionals. They are also rarely influenced by advertising, which is having a financial impact on media companies that rely on traditional advertising sales. The good news is that millennials really value authenticity, and are more likely to subscribe to content than other generations. Media companies that are open, honest and transparent, and produce content powerful enough to share, stand to succeed.
Major Trend 6: Internet Delivery
If you have not figured out how to create a successful business model around Internet-based content delivery, you are falling behind. The line between traditional media and digital media is gone. They are both one in the same now, and companies need to figure out how they both work in combination to deliver the right content, to the right audiences, at the right time.
There are also a number of minor trends impacting business for media companies — the proliferation of mobile devices, the maturing of content marketing, the merger of broadcast and Internet media, and so on. But frankly, these are not new — they have been on the radar for a long time. Your long-term strategy should be based on the major trends, while considering the minor trends for your short-term execution strategies.
Your IT Budget
Obviously, with the amount of technology activity influencing the media industry, IT spending in media has increased. To remain competitive, you need to invest wisely. Your goal is not to outspend the competition — it is to spend more of your technology dollars on strategic initiatives and less on infrastructure. Projects that help to create scalability, reduce expenses, and enhance customer experiences should get more of the IT budget. KPIs that will lead you in the right direction include revenue per employee, cost of technology per employee and overall percentage of revenue spent on technology. Your spend per employee and revenue per employee should go up over time, while your overall percentage of revenue spent on technology should go down. And while small businesses’ IT spending is all over the board, with estimates from 1.5 percent of revenue to over 10 percent of revenue, expect companies in the media industry to be at the high end of this. The industry is hyper competitive, the barriers to entry are being reduced constantly, and technology is having a major impact on the current landscape.
Security and Regulatory Compliance
As with any industry, consumer data protection is a high priority for media companies — not only because of the legalities, but because corporate trust is much harder to maintain than ever before. Consumers (and not just the millennials) have much more visibility into the companies they choose to support, and there is much more competition waiting in the ranks to take your spot if you ever violate that trust. Failing to protect your customer’s data is a quick way to alienate your fan base and create vocal enemies.
In terms of regulatory compliance, not much will change in the near future. Long-term however, the policies in place to regulate content will need a major overhaul. This will most likely be good for companies, as deregulation will create more freedom of information, as well as less overhead required to manage compliance.
All in all, there is a lot impacting media today. The above items breach the subject, but are by no means a comprehensive list. If you are in the media industry today, it’s time to take a serious look into how these trends could affect your business. If you are determining your strategy based solely on the technical competencies of other media companies similar to you, you may be missing a huge opportunity to leap ahead. Disruption is coming from all angles, and the forward-thinking media companies are investing in technology to keep up with — and surpass — their competition.