The data-driven business story will focus on the use of data as a key competitive advantage of media and entertainment companies.
The growth of blockchain and data-driven businesses was one of the stories to watch at the International Broadcasting Convention (IBC) that started on September 14th in Amsterdam. The interest in blockchain centered on how the technology can be used to solve problems with payments to content creators and improve targeting of advertisements. The data-driven business story will focus on the use of data as a key competitive advantage of media and entertainment companies.
Here are more details about each:
Story One: Potential Uses for Blockchain: Digital Rights Management and Advertising
Blockchain has the potential to reshape business processes in industries around the world. Broadly defined, blockchain is a new type of distributed database that maintains and records data, such as payment transactions, in a way that allows multiple stakeholders to confidently and securely share access to the same information. Blockchain shows promise across a wide range of business applications and is already being used to track and trace diamonds, livestock, financial transactions and cross-border payments.
In the media and entertainment industry, blockchain is in the early conceptual phase, but given its disruptive potential and widespread business efficiencies, it could be a story to watch at the upcoming IBC event. Attendees are likely to be interested in how the technology can be used to address some of the key business challenges in the industry: creating new revenue streams and improving operational efficiencies, lowering overall costs, and delivering more personalized video content.
Within media and entertainment, there are multiple arenas where this new technology could deliver significant benefits. Initially, the most promising areas will be digital rights management and advertising.
Digital rights management
Digital Rights Management (DRM) is the practice of tracking, controlling and compensating rights to digital content. Blockchain can help improve this practice. This opportunity is important because problems with DRM systems are negatively affecting the players involved with digital content. Challenges include:
Tracking: difficulties tracking where content is being consumed and who ultimately owns the rights and value;
Lost control of content: content creators have been pushed further out of the supply chain; they have been left with minimal control over their original content and limited visibility into how they are paid for use of their content; furthermore, there is added complexity when other content creators enhance the original content by using, for example, special effects. Version control, content security and payments are major issues.
Delays: content creators are often the last to see revenue from media usage despite being the content originators; money moves from consumers to retailers to distributors to collection agencies to publishers to labels; usually each of these groups takes its revenue cut before any money reaches the artist; creators are often paid up to two years after their content has initially been viewed.
In the financial services and other industries, blockchain is already being used to help address these challenges with identity tracking, supply chain visibility and control, and automatic payment transactions without delays. Blockchain has the potential to help solve similar problems, and others, for media and entertainment companies. Although a DRM blockchain platform has not been in commercial use, the technology is maturing and a platform is likely to coalesce during the next few years. There could soon be a world where a digital content service could contribute data to an industry-wide blockchain and assist media creators with determining how many consumers have listened to their song so they can understand the royalties they are owed.
One of the most competitive aspects of advertising is access to, and control of, specific information about consumers such as demographics, habits and interests by organizations such as cable TV companies. The more a company knows about its consumers the more effectively it can target its ads to reach them. Because this information is so valuable and challenging to acquire, companies are not typically keen to share the information with other companies. Nevertheless, blockchain has the potential to allow advertisers to more easily access sets of data about consumers; as blockchain collects, validates, and maintains a record of the data.
A blockchain advertising project publicly announced this year aims to allow multiple groups to share consumer and advertising data with each other directly in a transparent blockchain environment. In the project, several media companies will work together on a new and improved advertising approach that would facilitate the secure exchange of non-personal, audience insights for addressable advertising. The goal would be to improve the efficiency of premium video advertising, resulting in better planning, targeting, and measurement across screens.
To capitalize on blockchain, companies throughout this industry should consider the following:
- Strategy assessment: business transformation assessment, blockchain applicability, business impact and deployment strategy assessment;
- Bootcamps: blockchain technology leadership workshops for hands-on, advanced training and rapid prototyping;
- Sandboxes/rapid prototyping: rapid development environments featuring a suite of blockchain toolsets, customized proofs of concept, end-to-end existing technology assessments, and integration recommendations; and
- Solution design: holistic solution design that encompasses people, processes, operating models and technology.
Story Two: Rise of the Data-Driven Business
Broadcasters and programmers often struggle to understand demographics, behaviors, and intentions of people who watch their content such as TV shows. They do not know enough about which TV shows interest them and why, which character in the show alienates viewers the most, and how far into a scene a viewer watches a show. These problems exist because the data broadcasters have about their viewers tends to be sparse, disaggregated, and unreliable.
However, Internet-based platform companies, known as “digital natives,” possess extensive and valuable data about consumers. This specific and relevant data forms the core of their businesses and arms them with a wealth of information about the demographics, behaviors, and intentions of people viewing their content. Gaining deep understandings of their viewers, these platform companies can deliver consumers more personalized and valuable video content, services, and recommendations. As owners of the customer experience, digital natives deliver compelling video experiences that drive more advertising revenues.
The competitive advantage this offers digital natives are motivating traditional broadcasters to become data-driven businesses, which have the following characteristics:
- Data-centricity: data-driven organizations build direct, one-to-one relationships with audiences, creating value propositions that encourage and reward audiences for sharing their data. These companies are in the business of amassing data on audiences and exploiting it.
- Platform-based approach: data-driven organizations take a “platform-based” approach to gathering data from across all their brands and audience touch-points. Data is gathered and exploited in a coordinated manner across propositions and functional silos and throughout legacy and new digital channels. This enables broadcasters to properly exploit audience engagement across their product portfolios starting with visibility of how each audience member engages with each channel, brand or product.
- Operating models led by data insights experimentation: data-driven organizations don’t just collect data and invest in technology. They overhaul their operating models to place insight and experimentation at the core of their operations. This requires new structures, skills and ways of working to drive strategic KPIs (key performance indicators).
Although broadcasters have been focused on improving the quality and reliability of their customer data for several years, at this year’s event they will be focused on data strategies because of mounting competitive pressures and growing demand by consumers for more personalized services. Broadcasters need to increasingly adopt the approaches of the major digital disruptors and become data-driven media and technology companies. But few are doing so as quickly or effectively as the market indicates.
To transform into data-driven businesses, it is critical for companies to pivot their corporate cultures so everyone understands that the company is, first and foremost, driven by data. A broadcaster, for example, needs to re-invent its business model so it is responsive to insights from customer data and uses that data to help reduce costs and generate more revenues. Insights and analytics should be applied across all areas of the business. Integration of, and reactions to, these insights is crucial for proving business value.
At this year’s IBC expect broadcasters to be increasingly focused on:
- becoming data-driven as the industry continues to be reshaped by digital consumption;
- building more direct, insightful, and deeper relationships faster by knowing more specifics about their viewing audiences; this includes their habits, preferences, ages, and genders;
- constantly measuring performance of their products, including TV shows, based on data processing using analytics;
- using valuable data for continuously experimenting with new products and making real-time pricing changes;
- accessing and developing more advanced audience targeting using multiple data sets rather than broad, simple and basic demographic data; the goal will likely be to deliver more personalized advertisements;