Back in July, Netflix reported its first domestic subscriber loss since 2011, and lowest quarterly subscriber growth in three years.
Stock value, of course, plunged — a mind-blowing $17 billion in one day — proving that especially for the media and entertainment industries, immunity from disruption is non-existent, even for massive pioneers like Netflix.
Writing in Forbes, Futurum Principal Analyst Daniel Newman explains that while last year’s digital transformation (DX) trends for media and entertainment were focused around the increase in video ads, buzz for digital experience, and the resulting rise in mobile data usage, predictions for 2020 focus on the need to “cap the crazy.”
There’s a need to “realize what types of technology and advancements and content creation will really drive business in 2020 — and which will merely drive companies into the ground,” Newman writes.
2020 will also be an “inflection point,” he says, “where companies are going to better operationalize current technology.” Preparing will be key, with organizations working to handle emerging technologies like 5g, mobile AR/VR, and conversational AI — while maintaining a balance between profits and connecting with the customer.
Here are Newman’s top four predictions for digital transformation in media and entertainment:
Applied AI for operations: Spending is growing faster than profits at today’s organizations, which is a business no-no. Media and entertainment companies need to take the wheel on spending, but the situation is still controllable.
“Every company today, aided by AI and machine learning, has the power to be smarter about where and how they’re spending. They have the ability to see what’s working and what isn’t.”
Privacy: The trust gap is currently massive, and media and entertainment are at the centre. Consumers overwhelmingly (61% in one survey) feel that companies no longer have control over data and privacy.
“In the future, there will be a significant opportunity for brands to work on offering greater levels of data usage transparency,” Newman says, “to deliver best of breed experiences while also providing consumers a better understanding of how data is being used.”
This will translate into giving better and more levels of control to consumers, including information on what brands know about them and having the right to be forgotten.
Focus on building intelligent enterprises: Going hand-in-hand with the aforementioned spending issue, companies in media and entertainment need to shift their focus on building smart enterprise, “not just cool and exciting media arms.”
With the innovation that’s taken place within media and entertainment, it’s important that “companies apply the same effort to the back office to make sure operations can support growth and scale profitably.”
Personalization: Gen Z-ers and Millennials are willing to pay for personalization. Especially if it’s well done and lead to deeper engagement. In 2020, Newman explains, companies will take a closer look at both successful content and which audiences they’re attracting. The result will be, thanks to AI and machine learning, more niche communication and customized content geared to specific audiences.
Going beyond content, “it’s time for the industries to clean up their databases and make smarter outreach,” Newman says. “2020 will leave no room for messy communication and customer relationship management.”
Given that consumers haven’t changed their habits too much, previous predictions continue to hold out. The coming year, however, “will focus more on getting a handle on the wild masses of content being created and shared across an endless number of channels.”