It’s a scary time in media and entertainment. As the most recent earnings reports from some of the biggest media companies show, investors are anxious about the future of the industry. Media brands are reducing their outlook for 2016 and warning investors that they need to sink “hundreds of millions of dollars” in content and technology in order to catch up.
Many iconic TV organizations are seeing alarming decline in viewership, and there’s a decline in ad revenue across the board, even for new, unproven digital formats. Media companies are seeing their stock price plummet— in some instances, by 39 percent within a few short months.
Fast-evolving behavior and attitudes of audiences are a big factor in the industry’s struggles. In tandem with new technology and the rise of mobile, today’s audiences have drastically changed how they consume content. They’re abandoning so-called legacy media for digital, streaming and mobile. At the same time, technology-driven upstarts are challenging the status quo: competitors such as Netflix, Hulu and Amazon are proving that a new revenue mix is truly possible in the age of the empowered audience.
Media companies are seeing their stock price plummet—in some instances, by 39 percent within a few short months.
To reverse the trend, some companies like Gannett Publishing are spinning off some parts of their business. Others, like truTV (formerly known as CourtTV), WEtv (Women’s Entertainment) and iHeartMedia (Clear Channel), are resorting to rebranding. In the meantime, some brands are investing in upstart companies, as NBCU’s backing of BuzzFeed and Vox demonstrates. Many are investing in direct-to-consumer or OTT-type services or doubling down on optimizing ad sales.
Needless to say, media organizations are facing enormous challenges as they pivot their business. With tech-focused and fast-moving competitors moving into their traditional space, they are going to need to make challenging, critical decisions without a clear precedent.
They will need the kind of confidence that can only come from a deep understanding of the people who ultimately decide their fate: audiences. Not just what they are doing, but the underlying why.
Through an ongoing conversation with their customers, media companies will:
- Develop better content
- Build and launch new products more effectively
- Understand the path to purchase in order to grow and retain subscription audiences
- Monetize new business models and opportunities
- Solidify long-term, profitable advertising relationships
Media companies need to realize that investments in content and technology alone won’t allow them thrive in the world of disruption. Creating, maintaining and nurturing an authentic relationship with the empowered audience is key for media and entertainment companies today.
To learn a better approach to engaging with your audience, check out Vision Critical’s audience intelligence platform and watch our customer stories featuring some of the biggest players in media and entertainment.