The fourth issue of Accenture’s Bringing TV to Life series offers strategic guidance to digital video businesses. Traditional television providers are especially vulnerable to disruption by new players. Nimble start-ups and massive rivals such as Amazon, Apple and Google all threaten the business models of legacy network operators.
Lead author Sef Tuma identifies two types of main player. Digital Content Providers (DCPs) are a new breed of business serving content across an array of different digital channels, including OTT and IP distribution, or going directly to consumers or through collaboration with Digital Content Aggregators (DCAs).
Subscribe today: Sign up for Which-50’s Irregular Insights newsletter
The Aggregators would be familiar to most people as businesses like Netflix and HBO – platforms which package up multiple DCPs to consumers. “In contrast to traditional Aggregators,” writes Tuma, “DCAs focus more on providing the data and platforms, such as media distribution and targeting services, that DCPs need to engage with audiences directly.”
Broadcasters and other traditional TV providers are under pressure from two directions. Their audiences are declining as more viewers cut the cord or turn away from the passive, linear experience of FTA television. At the same time, billions of dollars of ad spend is rushing online.
Shareholders expect growth, and legacy business cannot compete with the soaring growth rates of start-ups. According to Accenture, however, they can still expand their base by adopting innovative strategies and pushing into new areas.
Tuma identifies five key strategies for digital content providers.
- Work together with platforms and devices.
- Move fast.
- Stay close to the customer.
- Get Noticed, and…
- Support multiple business models.
Traditional aggregators, on the other hand must move quickly to “fend off the ever-growing threat of content owners and Digital Content Providers (DCPs) going direct to the consumer.” HBO fired a shot across the bows of its cable partners last year when it released the HBO Now app. Suddenly Game of Thrones fans didn’t need to pay cable operators $100 a month to visit Westeros. HBO would take them directly for much less.
Aggregators then need to quickly establish their position in the industry’s shifting value chain. Leveraging their existing assets to grab up the biggest possible market share means…
- Allowing content to remain king.
- Scaling up to succeed.
- Differentiating through quality of service and experience.
Aggregating insights from constant data flows.
- Accelerating new digital capabilities to support their ecosystem.
Leveraging the living room advantage, and…
- Building trust.