Media companies should put in practice what Netflix unearthed a decade ago — that data drives content creation and distribution.Download the full report
Data reigns as the queen behind the content throne
Entertainment companies seldom had a huge need for data. For decades, the equation was a simple one: the quality of content plus how many people watched. Content was crowned king. But the internet opened up enormous floodgates for consumer choice, and the ensuing wave of information gathered from streaming and digital technologies crowned data the new sovereign.
The warning bell has been sounded by companies such as Netflix and Amazon: obsolescence is possible if media companies can’t reinvent themselves. The threat is real as more people in the US now pay for a streaming video service than subscribe to cable TV. In a brutally competitive and regularly evolving broadcast landscape, media companies can turn to data to create more sophisticated audience engagement, as well as create the content their viewers will choose to watch.
How data is shaping today's media enterprise
New genres of entertainment that compete for a consumer’s time, attention, and money are nearly boundless. Streaming technology has improved, bandwidth increased, and the pool of content has become so deep that viewers can watch anything they want, on any device, and at any time.
Look no further than travelers in airports awaiting flights or the teen sprawled on the family couch all summer. Entertainment consumption on mobile devices has grown from videos to gaming, and binge watching is replacing linear TV viewing. In fact, as bandwidth increases and latency is eliminated, it’s predicted that more people will turn to mobile devices instead of TV for entertainment.
How do traditional entertainment companies compete with over-the-top (OTT) streaming services with a rich catalog of content and deep pockets to create more? Apple, for example, is creating its own shows for distribution via Apple TV, iPhone and iPad, some third-party TVs, Roku, and Fire. And it’s spending billions to do it.
At last report, HBO was spending USD 2.5 billion on original programming, while Netflix content spend is expected to reach USD 15 billion. The comparison is even more staggering considering the number of original movies and shows produced, a reported 700 for Netflix last year.
After running video rental giant Blockbuster out of town, Netflix pivoted its business model from video rentals by mail, to streaming content delivered over the internet. It then produced content. Netflix leveraged its own data about viewers wants, needs, and repeat favorites to compete with traditional content. Its first self-commissioned original series, House of Cards, released full seasons all at once, ushering in the “binge watching” movement and creating a new and different way for consumers to experience content.
Millions of consumers worldwide have a relationship with Amazon as an online retailer. Prime membership offers not only free product shipping and access to special savings during highly publicized “Prime Days,” but also a full streaming service of movies, TV shows, and music with Amazon Prime Video. Amazon can use its long-established and vast consumer reach to collect and assess massive amounts of customer data and build out its content.Download the full report
How can IBM help you?
IBM helps media and entertainment companies worldwide transform into agile enterprises that serve the connected customer. From production workflow and audience analytics, to mobile platforms and cloud solutions, we support clients with content production, content distribution, sales and services, marketing, and advertising intelligence.
IBM ’s scalable analytics platforms enable the creation of precision business insight from an ever-growing array of data inputs: internal, external, raw, structured, unstructured, sensors, and digital content.
Meet the authors:Janet Snowdon, Director, IBM Media and Entertainment (M&E) Industry Solutions; Peter Guglielmino, CTO, Global M&E Industry Solutions; Steve Canepa, General Manager, IBM Global Communications Sector and Global Industry Managing Director, Telecommunications, M&E Industry Solutions; Rob van den Dam, Global Industry Leader - Telecommunications