Media and entertainment companies can grow revenue 13x by reinventing their business models, according to research from PWC. This is what audiences, media buyers and advertisers are looking for over the next four years.
Key Takeaways
- Half of all businesses that exist today won’t be around in 10 to 15 years.
- Media and entertainment companies need to reinvent how they create, deliver and capture value. Australian media and entertainment businesses may not be moving fast enough.
- Cost of living concerns caused challenges for 2023 and 2024 media revenue.
- Emerging technologies are creating opportunities, while business model reinvention and strategic risk-taking will be rewarded.
- Connected televisions and smartphones are now critical for streaming and gaming.
- Generative AI will be a super disrupter.
- Margins and available capital are already tight – it is critical to make careful but difficult decisions for investment.
The media and entertainment landscape is changing, according to PWC. And there is money to be made by companies willing to innovate toward new opportunities.
A report released by the professional services firm shows that Australian media and entertainment revenue grew by 2.8% throughout 2023, and is expected to exceed $70 billion by 2028.
The key to tapping into that revenue pool is understanding what audiences, media buyers, and advertisers want.
The needs of the Australian media/entertainment ecosystem
The first group to consider is the group of people consuming media and entertainment content. Over the next four years, the Australian audience wants ‘on-demand, online, frictionless, affordable or free’ services. They are also looking for shoppable (transactional) and snackable (short) content services that can be accessed on a variety of connected devices.
Advertisers are now looking for better marketing returns on investment, the report states. They are seeking to ‘leverage and integrate their customer data’ and after spending with a content provider they want specific data on the resulting business outcomes.
The agencies that buy media are changing due to audiences using emerging technology such as internet-connected TVs. They are looking to diversified services to deliver more value to advertisers.
Specific strategies for media business model innovation
Partner: Getting more revenues from ecosystems
Revenue-sharing contracts with partners is key, PWC advises, and facilitates access to new data, technologies, insights, customers, and markets. “A mindset change to a more collaborative posture is essential,” the report states.
Outsource: Investing more deeply with managed service partners and experts
No business can be good at everything, PWC cautions. “Develop an understanding of which capabilities are key to your competitive advantage and see what you can do to smoothly and cost-efficiently outsource the rest,” the report advises. This creates additional capacity to exceed in a specific area of excellence and enables the transfer of knowledge from outsourcers to employees within your organisation.
Accelerate: Going faster to implement new technologies including cloud, APIs, advanced analytics and AI.
Data from new technologies, for example AI and analytics, enables teams to work faster and make more informed decisions. PWC advises that optimising the capture and monetisation of audience data is essential.
Why do Australian media/entertainment companies resist revising their business models?
The report also finds Australian CEOs are more confident in their current business model, than CEOs from other countries.
“Our data shows that 85 per cent of CEOs surveyed say their business would still be viable 10 years from now even if they were to stay on the same path – compared to just 53 per cent globally,” PWC reveals.
More than 50% of Australian business leaders say they are resistant to reinventing the business model because of a lack of technological capability in the company workforce. The top two reasons cited are competing operational priorities and the regulatory environment.
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