1. Media consumption habits are shifting as evolving technology puts today’s empowered consumer in the driver’s seat. How are their attitudes and behaviors impacting business models and economics across industries?
Business models and the economics of the industry are changing—something many traditional enterprises are now acknowledging. With consumers in the driver’s seat, traditional business models are hitting some speed bumps. In response, many content providers and advertisers are finding new ways to reach customers and make content available to them. For example, over the past year or so, “skinny bundles” have become increasingly popular. These pared-down, less costly subscriptions to a selected group of channels are being offered by many traditional cable and satellite companies, as well as by over-the-top (“OTT”) providers like Netflix or Amazon. For example, Dish Network’s Sling TV skinny bundle was launched in 2015, garnering 700,000 subscribers within a year.
The expansion of distribution to OTT services that offer advertising-free content has put pressure on the margins of many traditional companies. And the rise of on-demand content is challenging the traditional advertising model, pushing many advertisers to explore other avenues for promoting their products.
Furthermore, changes in consumption patterns, in particular, “binge-watching,” have created a huge market for extended formats. These serialized programs with a single plotline that continues from one episode to the next are being produced not just by many traditional studios, but also by several OTT providers.
2. In 2016, Deloitte’s Technology, Media, & Telecommunications (TMT) practice commissioned its inaugural Digital Education Survey (DES), to better understand the impact digital education is having on the education ecosystem. What were the key findings of this survey?
The inaugural edition of Deloitte’s 2016 Digital Education Survey uncovered many interesting findings around children’s educational trends associated with the unprecedented use of digital education technology devices and materials today. Just as consumer behavior changes continue to fuel transformations in media companies, the changing digital behaviors of students, teachers, and parents are expanding the way learning occurs. I’ve included a few highlights below.
Parents Look to Teachers before Opening Their Wallets and Purchasing Education Technology Devices and Software
- The survey finds that teachers remain a key avenue to digital adoption. By a wide margin, parents trust teachers most, and teachers trust each other, for advice on both digital devices and learning materials.
- Nearly all parents (94 percent) care about the brand when selecting digital learning materials, with teacher recommendations, good value, quality content and trusted brand as the highest brand attributes.
Despite Everyday Use, There is Room for Growth in School Technology Adoption
- Less than half (42 percent) of classrooms use at least one digital device daily, but 75 percent of teachers believe that digital learning content will replace printed textbooks within the next 10 years.
- While 81 percent of teachers with 10 years of experience or less believe ed tech at school makes a “really big” or “pretty big” positive difference on students’ learning, only 73 percent of teachers with 11-20 years of experience and 64 percent of teachers with 20-plus years of experience feel similarly.
Device Preferences Vary by Age, as Do Learning Motivations
- A majority (89 percent) of students in grades K-5 prefer a tablet, while 66 percent of students in grades 6-12 prefer a laptop.
- For 74 percent of teachers, student engagement is the top motivation for the acquisition of digital learning materials in classrooms, while more than half of parents (53 percent) noted skills development as a leading motivator at home.
- Ninety-one percent of parents are comfortable with their children using devices independently to play digital learning games; however, they are more likely to allow their child to spend more time engaging with educational videos or apps than with educational video games.
3. Video-on-demand is dominating the Media and Entertainment industry. This is prompting distributors to come up with different ways to bundle and disseminate content, creating new revenue models, and opening up all kinds of opportunities to push the envelope on content creation. Where do you see the most exciting opportunities for growth and beyond in 2017?
Streaming services are growing rapidly, with around 60 percent of consumers using them monthly.1 Video-on-demand viewers in the US are expected to reach 209 million by 2021, up from 181 million in 2015.2 Millennials spend more time streaming content than watching it on television, and more than 20 percent of them are viewing shows on their mobile devices.3
There is good news for content creators: consumers are as hungry for content as ever—lots of it in fact—and the number of distribution outlets has exploded. As a result, we expect there to be a rise in alternative content formats. No longer tethered to the traditional hour or half-hour segments with commercial breaks, content creators can begin to experiment. For instance, we are seeing--especially with millennials--an interest in shorter forms of content such as serialized web and YouTube segments that are a mere six to 10 minutes in length.
Social media and the Internet, in general, have created another enormous opportunity for both advertisers and content creators: the ability to create a direct relationship with end consumers. With unparalleled access to the hearts and minds of consumers--and even to their location and specific activities--content creators can take personalization to a whole new level.
Finally, the area of content discovery may be one of the most important and interesting opportunities over the next year or two. It used to be simple—if a network wanted to get the word out about a show, they would advertise it during another popular show. But with today’s highly fractured distribution channels that have become much more difficult, and once again an intimate understanding of the end-user is a key to success. Companies that can figure out how to push discovery of their content to consumers or help them discover it for themselves will likely have a leg up in this competitive space.
4. As a 25-year industry veteran in a dynamic industry, you have seen a lot of changes. What advice would you offer for someone just getting into the business?
The media & entertainment industry, as well as the consulting industry, have changed dramatically over the last 25 years. I tell anyone wanting to get into the industry to focus on developing the “core” skills required in the industry regardless of how basic the tasks may feel at the time, absorb everything you can from those with much more experience. When one does start to develop those core skills, use those to take work away from your direct supervisor so he or she can focus on more important tasks. By this, you gain experience and also gain the confidence of your supervisor. Beyond the core of developing skills, keep up to date on the developments in the industry. There are many very informative sources of information and it is critical to be up to date.
My last recommendation, especially for the media & entertainment industry, is to watch the younger generations and how they consume media. Over the last 11+ years that Deloitte has been researching media consumption, almost every single trend has started with the younger generations and moved up through the generations – the parents learn from their children about new devices, new services, and new ways to be informed and entertained.
1. Deloitte, ‘Digital Democracy Survey’, April 2016, https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/digital-democracy-survey-generational-media-consumption-trends.html
2. Deloitte, ‘Digital Democracy Survey’, April 2016, https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/digital-democracy-survey-generational-media-consumption-trends.html
3. Statista, “Number of digital video users in the United States from 2015 to 2021, by type”, https://www.statista.com/statistics/455730/digital-video-users-type-digital-market-outlook-usa/