In an interaction with Thiruamuthan, Correspondent at Industry outlook magazine, Manish Sinha, Vice President & Business Head, TO THE NEW discusses the transformation of the media and entertainment industry due to digitalization and OTT services. He emphasizes a shift towards a more open, consumer-centric structure, and outlines key tech trends, data analytics for audience engagement, challenges for traditional broadcasters, and content security in the digital age. Below are the key extracts from the exclusive interview:
How is OTT convergence reshaping the traditional media and entertainment landscape?
The traditional media and entertainment industry, which remained tightly controlled and dominated by a few major players for decades, has undergone a significant transformation due to digitalization and the emergence of Over-The-Top (OTT) services. Previously, high entry barriers prevented smaller and mid-sized companies from entering this industry.
What has fundamentally changed is the industry's structure. Roles and boundaries have evolved, with every media company now directly engaging with consumers. Studios and production houses once focused on content creation, now have their own platforms, reaching customers directly. Broadcasters, both nationally and globally, have launched their streaming services, and many are creating original content. Companies like Netflix manage the entire content creation and distribution process.
In summary, the industry has shifted from a closed and rigid structure to a more open and flexible one. Entry barriers have crumbled, enabling smaller companies to enter the media landscape. A significant trend is vertical integration, where content creators reach consumers directly while distributors have extended their arm into content production. This transformation, driven by the rise of OTT services, has profoundly reshaped the media and entertainment industry, making it more dynamic and consumer-centric.
What are the key technology trends driving transformation in the media and entertainment sectors?
In the realm of technological advancements shaping our world, three key areas stand out, each exerting a profound influence on our daily lives. Firstly, the consumer landscape is undergoing a remarkable transformation. The widespread adoption of the Internet, particularly in countries like India with accessible high-speed connectivity and affordable costs, is reshaping industries. Mobile technology, suited to India's demographics, has seen a surge in adoption. Smart TVs, essentially Internet-enabled devices, now account for over 50% of TV purchases, leading consumers to spend more time and data on digital content.
In the innovation arena, consumer experiences are being revolutionized. Data analytics and AI enable highly personalized recommendations and gamified experiences. Low latency technology facilitates sports content streaming on OTT platforms, paving the way for sports-related wagering. Targeted, non-disruptive advertising is becoming the norm, offering enhanced value to advertisers.
Lastly, operational efficiency is crucial within the industry itself, especially in the evolving Over-The-Top (OTT) media sector. Companies are leveraging technology to streamline operations, reduce costs, and expedite profitability, contributing to the ever-changing media landscape.
How are businesses leveraging data analytics in OTT convergence to understand and engage with their audiences better?
The advent of digital technology has ushered in a new era of possibilities in human interaction. In the past, television viewing was largely a mystery, as it was based on surveys from a limited number of households. However, the digital age has transformed this landscape, providing a wealth of data that offers insights into people's viewing habits and preferences. This data extends to all aspects of content consumption, offering opportunities for data analytics.
This shift has profoundly impacted decision-making processes in advertising, content creation, and subscription models. Previously, decisions were often based on assumptions, but now they are data-driven. Media companies can track every facet of consumer behavior, from content preferences to subscription patterns.
This abundance of data enables improved targeting, personalization, and content decisions. It guides decisions on sourcing content, offering subscription packages, and running effective marketing campaigns. Even in advertising, with platforms like Netflix and Amazon Prime now incorporating ads, data analytics ensures more precise, measurable, and non-intrusive advertising.
How are traditional broadcasters adapting to the digital transformation brought about by OTT convergence?
Traditional broadcasters are facing a significant shift in the media landscape as digital platforms take precedence. While traditional media once enjoyed industry dominance, digital media is now the undeniable future. However, it is too early to write off traditional media entirely, as some audiences still prefer its tangible format. The industry currently exists in a hybrid state, with traditional media coexisting with digital, but the imperative to invest in digital ventures is clear. This goes beyond financial investment and involves a profound cultural shift.
Traditional broadcasters are no longer just competing with each other; they now contend with tech giants like Facebook, Apple, Netflix, and Google, who have entered the media and entertainment space. Consumer switching costs have also diminished, allowing easy transitions between digital platforms. As a response, traditional broadcasters are establishing dedicated digital teams and fostering a culture of agility and responsiveness. They understand that digital success is not solely reliant on brand recognition; it involves delivering exceptional experiences and niche content.
How are companies addressing the issue of content security and piracy in the age of OTT convergence?
In the realm of security, the evolution from traditional to digital media has presented multifaceted challenges. In the past, traditional media boasted higher security levels, employing satellite distribution with heavy encryption to thwart piracy. However, the digital age has transformed this landscape, making content security increasingly complex, as piracy proliferates. Content often appears on piracy websites shortly after its release.
To combat this, methods like DRM, forensic watermarking, encryption, and blocking techniques are employed, but it's an ongoing cat-and-mouse game as hackers continually develop new tactics. Digital technology, while heightening vulnerabilities, also offers solutions. The primary challenge lies in the significant cost of robust security measures, which businesses must weigh against potential risks and benefits. Some find them cost-prohibitive. Despite these challenges, the market offers effective security products, and ongoing technological advancements provide hope for more robust content protection in the future.
How can small and medium-sized businesses enter the OTT convergence space and compete with industry giants?
In a nutshell, the key to how small and medium-sized businesses can compete effectively in the digital age is threefold. Firstly, they must identify a specific and well-defined niche audience to target. Unlike industry giants with a broad reach, smaller businesses need to focus on catering to a particular demographic with tailored content and experiences.
Secondly, technology plays a pivotal role. These businesses must leverage the right set of technologies to provide user experiences that match or surpass industry standards. Consumers expect a high level of experience, regardless of the company's size, so meeting these expectations is crucial.
Lastly, these businesses should use technology to their advantage by being more responsive, nimble, and cost-effective. Unlike industry giants with deep pockets, smaller companies need to manage their operations efficiently and avoid overspending. By embracing technology and maintaining an agile approach, they can stay competitive in the digital landscape