A major trend driving the media industry’s digitalization is the rise of the ‘hyper-connected’ consumer, who prefer to access content as a service via multiple screens rather than own it. These consumers are often also producers, editors and aggregators of content via platforms such as YouTube and Instagram. This increased engagement with online media has enabled companies to analyze consumer behavior and produce more targeted, and more profitable, content and advertising. ADL predicts that such personalized targeting will also begin to enter the offline advertising value chain.
However, the report also identifies challenges for companies seeking to diversify online. Major positions have already been taken in video and music streaming by new players such as Netflix and Spotify. Content owners and producers are also in a strong position – with premium content becoming more expensive as competition increases, they become attractive acquisition targets.
Clemens Schwaiger, Global Head of Media in Arthur D. Little’s TIME Practice, said: “As the digital market expands, traditional companies have an opportunity to redefine themselves as content creator, aggregator and distributor. However, those companies that fail to consolidate quickly enough face long-term competitive disadvantages.”
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