Add in mobile access, viewing of usergenerated content and file sharing, and things get very complicated.
Now consider how media owners should respond to this shift in behaviour. While it is clear that consumers will trade personal data for access to content, they expect security and service in return. Contextual content and advertising is part of that. The emergence of a recommendation culture is also disrupting the traditional role of many media owners as arbiters of choice, unless they can re-mediate the connection between brands and consumers.
Oracle Communications identified these trends in a report, Capitalising on the Digital Age, published last year in partnership with The Future Laboratory. Twelve months on, it has surveyed 50 media firms across EMEA about their capability to deliver against the new customer-centric, multi-channel future.
The latest study, State of Readiness, reveals a strong desire to embrace the way consumers want to access content, but significant gaps in the infrastructure to enable these new behaviours. Ensuring information security as a starting point has been recognised by threequarters of companies in this sector. That forms the bedrock for building trust, pulling consumers into new channels and sustaining a commercial relationship with them.
What media owners want to do with that trust is reward customers through compelling experiences, tailored offerings and value-added services. But Gordon Rawling, director of EMEA marketing at Oracle Communications, points out: “There is a delta attached to that strategy. Now is not the time to lock down on where your business is going to be in this value chain.”
Much of the debate about the new-look media industry has been around paid-for content versus advertiser-paid. Significantly, only just over a quarter of respondents in the survey are looking at building paywalls, and even then only around specific areas of content. Partnering with other content and service providers and finding ways to charge a premium to advertisers and consumers is where the real game is.
“One option is to become the recommender,” says Rawling. “In order to take on that role, there are a lot of implications for the business, processes and enabling technologies.” Media firms have, typically, built their business models around a more fixed, command-and-control approach where the consumer pays an annual subscription for access, for example.
Six out of ten media firms say they can now process subscriptions through online and mobile channels, and nearly seven out of ten can also handle one-off payments. Perhaps the most significant gap is around handling micropayments, which just one-quarter can process through digital channels. Because pay-per-view of content is one way media might find sustainable revenue streams, this is an obstacle.
“You can no longer say your business model is ’A’ and stick with that for the next 25 years,” says Rawling. “You could have A plus B and a bit of C. There is an opportunity to sit in a different place and decide the value of your information.”
Oracle identifies some areas in which the inflexibility of payment systems may see media companies miss out on revenue. Streaming MTV videos and being able to offer the on-screen artist’s current album or offering an England football shirt to viewers of an international match are examples it provides. Partnering with other organisations to allow this type of model is either already in place or being planned by the majority of firms.
Striking deals with other media owners and content providers is the relatively easy bit – although Rawling notes that while media owners have good skills around IP management and settlement, in sectors such as telecoms, this is lacking. More challenging is the need to translate customer and interaction data into intelligence that drives relationships.
“The raw volumes of data about customers that media have is exponentially greater than it has been historically,” says Rawling. “That will only increase, bringing difficulties in processing it. Many companies can’t do it quickly enough, but it needs to happen in real time.”
Gaps in customer management systems were very evident in the survey. Not quite half of companies are able to monitor their customers’ interactions across all channels. Even having this integrated view does not guarantee intelligencedriven service. At the moment, only one in five companies can provide recommendations to customers based on their interactions across all digital channels. Automated analysis of customer behaviour to spot trends is possible in only 18% of firms, and just 16% can get insight into individual customer behaviour.
Most media companies were set up in simpler times; even digital pure-plays sparked into life ten years ago. Before the social media explosion, content went one way – from professional creators to individual consumers. Business processes, payment systems and data management technology were all built around this model.
Bringing information from those new channels into the structured customer record is difficult. Three out of ten media firms admit they have to integrate information from multiple systems manually – barely a quarter have a holistic view of the customer with everything brought together into one place.
Without this information infrastructure, companies cannot track the total customer lifecycle, rather than dealing with each transaction or interaction as a one-off event. Because content is so easy to distribute, media firms face probably the greatest levels of fragmentation, even before they consider social networks.
Yet Rawling notes that the 24% of businesses in this sector that do hold a single customer view should not automatically be considered the leaders. “There is a lot to play for as to who can be the leaders in this place,” he says. “Companies are starting from different strategies and abilities to build relationships.”
Using customer management systems to drive recommendations – named by 38% of media owners as something they are enabled to do – is still up for grabs. But after fragmentation comes the risk of over-supply.
“There are only so many recommenders that can exist out there,” says Rawling. “If you are looking to buy products and services, you can’t listen to six recommenders or you will have to aggregate them yourself. You need one – that is the opportunity for publishers.”
Getting into that leadership position demands a flexible approach and the right infrastructure. Data is a key asset to support the customer relationships that yield revenues through these new channels. Insight is the product of that data which tells the business if it is doing the right things.
What the Oracle report makes clear is that media firms understand where the market is, but they do not necessarily have the tools to benefit from that insight. But help is at hand. Rawling adds: “From our perspective, it is about removing barriers to providing these new services.”