By David Elms, Media partner at KPMG
This year’s RTS World Television Conference was a fairly joyous affair. The Who’s is Who of the UK TV community congregated for one day at the Barbican and the mood was decidedly optimistic. Almost everyone agreed that UK broadcasters had risen to the “digital challenge” of the London Olympics – the first global mega-event which demonstrated the opportunities and the growth potential of digital media.
The theme of the conference was “When Worlds Collide” but during the discussions it became quickly clear that the worlds of traditional TV and digital are increasingly converging. Thus far the TV industry has proved to be resilient but the digital revolution has just started and broadcasters can’t get complacent.
As keynote speaker will.i.am reminded everyone: ‘In order to stay relevant you need to be an enabler’ and the key question in years to come is: How do broadcasters become enablers? Or as will.i.am put it more bluntly ‘when everyone is already connected, what the hell is broadcasting?’
How serious do broadcasters take the digital competition and will the current business models and forms of monetization of content work going forward? The question of connecting ‘connected people’ will be an absolutely central one in the years to come. It’s about getting to know the audience, interacting with the audiences and building the formats that can do that.
Another key issue for media companies will be to take a long, hard look at their business operations. The last years of unprecedented change have left media companies facing a number of challenges in this area, most notably the need to drive inefficiencies from their business models.
I therefore believe that media companies must start to look at, and learn from, other non-media organizations who have consolidated and streamlined operations. Adopting a “factory mindset” to combine and streamline key processes and activities will prove anathema to industries where creativity is everything – yet now it is something that they must consider. I believe a huge number of processes remain in any media organisation which can be consolidated and streamlined. Perhaps only the real value-creating activities at the front end need remain unique.
At the same time, media companies have to come to terms with the evolution of content development. I believe that to stay competitive, they will have to move towards more globally developed and distributed content which is channel agnostic and involves more user generated content. This requires a move away from a one-way content flow to something more debate-driven.
In turn, this requires a shift in the role of the editor in terms of managing that content flow, protecting the integrity of the debate it creates and mitigating the new risks which more collaboratively produced content can bring.
A major unknown is how the revenue model for the industry will evolve. It is not obvious how new media will impact existing revenue streams and how digital media content can be best monetised. Although some industry players are bolder than others and have been more aggressive in putting in place new revenue models, it is likely that even the currently most advanced models are not fully future-proof. Further change will be required as consumers continue to evolve their habits.
One thing that is becoming more apparent is that as geographical boundaries are coming down and individual products are combined into more integrated solutions, a key success factor will be around successfully engaging with online user communities. Merely focusing on exploiting a simple one-dimensional, physical media product is a thing of the past.
I believe that success will depend on an organisation’s ability to trial and assess new experimental methods and how quickly those trials can either be terminated or assimilated.