|
Getting your Trinity Audio player ready...
|
A new report from the World Economic Forum and Accenture presents a framework with which to understand the growth and transformation of the media sector.
Accenture forecasts that the global GDP contribution of the communications, media and platforms sectors, which include traditional and digital-native media companies, will see a compound annual growth rate (CAGR) of 8% from 2019 to 2022, compared to a 0.5% CAGR across all industries.
Despite this relatively strong anticipated growth, the industry is not insulated from the economic fallout of the COVID-19 pandemic. The report notes that COVID-19 has accelerated secular shifts across the media and entertainment industry. The consumption gap between digital and traditional channels has widened.
In the US, the CAGR of time spent on media between 2018 and 2022 is expected to be +5% for digital channels and -2% for traditional channels. In China, the gap is widening more quickly, 8% annual growth for digital channels and an annual drop of 3% for traditional channels.
Much of this incremental time on digital media will be spent on digital video and social media platforms. Since the pandemic began, 50% of Millennials and Gen Zers report spending more time on YouTube, 47% spend more time on Facebook and 34% on Instagram. Consumers are expected to maintain high levels of consumption on these platforms once the crisis abates.
These economic and behavioural shifts are accelerating transformation across the ecosystem. This white paper from the World Economic Forum Platform outlines long-term implications for the media ecosystem, including changes to industry structure, user experience, monetization and data practices.
The report states that it is clear that 2020 represents a watershed year for the media and entertainment industry. Consumers and advertisers are shifting to digital channels, expecting greater value for their time and money, and raising the bar for customer experience.
It highlights the following six implications for the media and entertainment industry (below). These include consolidation around direct-to-consumer platforms, the growing tension between profitability and distribution, and the power of first-party data in placing media companies at an advantage.
According to the white paper, competition is intensifying and access to granular user data will be key for success. Business models are evolving to accommodate a new class of consumer creators and hybrid monetization opportunities. Platform companies are drawing increasing scrutiny from regulators. As these dynamics play out, a new framework is needed to understand how media companies will create value in the future.
To create a viable future for media, stakeholders in the industry will need to adjust their strategies in light of these trends and let go of old constructs which no longer serve consumers and society at large.
The full report is available on the World Economic Forum website here:
The Future of Media: A New Framework for Valuing Content
