Entertainment and media apps are the best way to invest in your audience and own them.
The TV experience is fragmenting fast. Broadcast TV is broken. Streaming video devices such as Roku, Chromecast and Amazon Fire TV will be used by 168 million Americans this year, according to eMarketer, with a third of these plugging them into games consoles and 30 million hooking them up to their Blu-ray players.
And huge amounts of video are being watched via mobile - in the US, 12 billion hours of mobile video were watched in the year to July 17 on Android phones, according to App Annie. YouTube took the lion’s share as its app is preloaded on the phones. Of the $570m in revenue spent on mobile video streaming apps, Netflix, HBO and YouTube were the biggest recipients. Broadcast media is being disrupted by new technology.
Dealing with disruption
This explosion in ways to watch content is dizzying. For entertainment and media executives looking to construct a strategy for the future it raises some hard questions. How can they avoid being swamped by the newly emerging giants of the digital world, from Netflix and YouTube to Facebook and Snapchat? How will media app audiences seek out their content on streaming services? How will they grow revenues in a fragmented market? Today’s binge-watching, second-screen and multi screen wielding audiences are developing a new set of viewing routines and media brands need to make sure they are part of those habits.
To navigate through this fractured media landscape, entertainment and media brands need to follow their fans and spread their presence across digital touchpoints. But they also need a cross-platform media app to serve as a single point of focus for their content. Such apps are becoming the marketing tool of choice for broadcast media and entertainment brands across the globe. From the UK’s Channel 4 to individual shows such as The X Factor, entertainment brands are building up their app ecosystems. Cross platform media apps allow media owners to carve out their own space in the digital sphere and to own the audiences that watch them. Only by building their own distribution networks will media brands ensure they have a profitable future.
Battling with the giants
This comes after many entertainment brands have had a bitter experience of trying to beat digital giants at their own game. They thought they could tap into the massive reach of YouTube, Facebook and other services and reap the rewards of advertising revenues. But the margins on advertising are small and the necessary volumes are out of reach for all but the very biggest players. Instead, media and entertainment brands need to develop a premium content strategy. Media apps allow them to tap into these niche audiences with premium content. The challenge is to cultivate valuable viewing habits among audiences so they are prepared to pay; either financially or through the time they spend paying attention to brand advertising.
Entertainment brands will need to win back audiences from rival distribution channels and bring them into their own network. This is not so much a “walled garden” approach where viewers are effectively locked into an entertainment network. It is more about making the garden so attractive that viewers will be happy to spend time there because the world beyond looks less appealing.
Media companies have spent the past decade fighting off their new digital rivals and have invested huge sums in building their own technology infrastructure. But this has soaked up capital, leaving little money left for investing in strategies to own audiences — such as new and inspiring content. But this is changing. Today, there is no need for huge capital expenditure on tech infrastructure. Media apps can be delivered through lower cost and more versatile cloud technology. Meanwhile, companies can use open-stack architecture to power their distribution networks.
Agile app building
That’s one reason why media and entertainment brands are looking for more agile app building partners. Ones that create apps that are ready for change. These apps let media brands rapidly achieve scale but crucially allow them to change strategies with ease. They can shift cost structures and other objectives when it suits them.
A few developers have ripped up their “Frankenstacks” so they can deliver change at a higher pace. They have also broken the vendor lock and E&M company internal teams who work with these app developers keep their own IP. They’ve also created an open research and app development community spread throughout the world, all contributing to the R&D process. Their collective working approach extends to in house teams and they work closely with internal engineering teams at entertainment clients to drive the innovations that deliver real-time improvements.
A vital part of any entertainment industry strategy is to own the moment. Brands need to build a real-time competitive advantage to connect with audiences in the moment, building immediacy into their relationships.
Entertainment and media executives need to build their own distribution networks. Cross channel media apps are an ideal way to achieve that. As viewing fragments, audiences will be pleased to find a single media app hosting some of their favorite content.