www.pwc.co.

uk/mymedia

Profitable growth
in the digital age
Towards a MyMedia
company

A point of view
June 2014

Profitable growth in the digital age

Introduction

Profitable growth seems tougher now than its ever been.

Global megatrends relating to technology, urbanisation,
climate change and resource scarcity, globalisation and
demographic shifts are challenging businesses in every
sector with new threats and new opportunities. Some of
these trends are imminent; others are already in play, most
obviously the enormous impact of digital technology,
especially in the media sector.
At PwC we help media companies seize the possibilities
and manage the risks that digital presents, whether theyre
innovators or late adopters, large or small, global or local,
private or public. On the basis of experience and our own
research, weve come up with the following point of view.
We believe a shift towards a more personalised
customercentric media organisation is the single biggest
change since the advent of digital media. This paper sets out
why and how you can make the transformation to a
MyMedia company as successful as possible. If it strikes a
chord, wed love to talk with you.

Towards a MyMedia company

The media landscape:

Focusing on the first digital wave?

The time feels right to take a fresh look at

profitable growth. There is muted optimism
about economic prospects in most developed
markets, in contrast to a more bullish outlook
in many emerging markets. Executives are
increasingly eager to do something positive in
order to grow the top line, after years of cost
restructuring and keeping things ticking over.
Whilst uncertainty lurks around every corner,
not doing something feels even worse,
especially when there are companies eager
to disrupt the status quo.
By the end of 2013, those who grew up with
digital technology started to outnumber those
whove had to adapt to it1. Armed with
smartphones, digital natives expect to be able
to browse, watch, blog, listen, interact and buy
wherever they are and whenever they want.
This iGeneration has more choice than ever
before, and theyre using social media to
express their views, and increasingly to
demand better customer service, and share
their experiences of businesses and brands:
more than 500 million plus photos were uploaded
to Facebook, Instagram and Snapchat in 2013,
and this is forecast to double yearonyear1.

The first wave is already here

Looking at the industry today, its clear that the
first wave of the digital revolution is already
underway, as the sector integrates digital into
the conventional media operating model.

A new and different type of customer

is emerging in the digital age

We are seeing companies delivering

increasingly personalised content experiences
using digital as a more effective, and efficient,
channel to the consumer (or at least those
consumers who want such digital experiences).
Beyond the hype, however, personalisation is
still in its infancy. And this is exactly where
most media companies are focusing their
efforts. Homepages and apps are moving
towards using more if you liked this, you might
like this recommendations; A lot of this
personalisation relies on what you buy rather
than what you use.

Digital is changing how we live, work, and

shop, as well as how we inform, educate and
entertain ourselves. And if you recognise the
BBCs three core purposes in that last sentence,
then thats no accident, because media is one
of the sectors with the most to gain and lose
from the digital revolution.

So this is only the start of the digital revolution:

many of the most dramatic changes were
seeing in the sector are being driven by the
need to develop new business models, and
challenge old assumptions to find new ways
of working.

1. KPCB, 2013 Internet Trends, Mary Meaker.

2. www.pwc.com/outlook

By the end of
2013, those who
grew up with
digital started to
outnumber those
whove had to
adapt to it.

Media is at the forefront of the digital

revolution, because so many of its products
and services can already be delivered in digital
form (and it may not be long before digital
revenues from print, film, publishing and music
overtake physical revenues in some markets).2
Therefore, media companies dont need a
digital strategy any more, they need a business
strategy, and a business model, which is fit for
the digital age.

Profitable growth in the digital age

Here are some examples of what we mean:

I nnovation is disruptive and
exhilarating. Some of the most successful
new media players are those whove
challenged established business models.
Look at how BuzzFeed has disrupted traditional
news sites through sharing of viral content,
or how Spotifys subscription model has
challenged Apples iTunes, which was once
a disruptor itself. Netflix has transformed
how consumers watch, use and pay for
content, and theyre changing the way
media owners engage with their production
houses. The more established media
companies are now looking to kickstart
their own approaches to innovation, often
through strategic collaborations or by
acquiring smaller companies with their
own distinctive talent and IP.
B
 oundaries are blurring. Whod have
thought that Red Bull would become a
media company, producing and distributing
content to build its brand? Mainstream
technology and telecoms operators are also
investing in content and harnessing their
huge customer bases and analytic firepower.
V
 ideo is usurping text. B2B and B2C
publishers are now increasing the amount
and quality of their video propositions,
recognising that their audiences want
more video, and have the devices they
need to watch it, even on the move:

T
 he old guard is changing. Traditional media
companies are reinventing themselves too in
some cases, not just converging, but colliding.
These days, the digital strategies for a
newspaper publisher and a broadcaster have
more similarities than differences, while media
and tech companies are moving into each
others territories, with tech wanting more
content, and media more analytics. Carving out
the space to develop distinctive customer
propositions is therefore getting harder and
harder all the time.
T
 alent is transferring. Media Boards are
looking for fresh insight and experience from
other related sectors, or other segments of the
media industry, whether to kickstart
innovation (in the older organisations)
or find new sources of profitable growth
(in the newer). For example, Erik Schmidt,
Chairman of Google, became a nonexecutive at
The Economist while Majorie Scardino, the
former CEO of Pearson, is now a nonexecutive
at Twitter and Jack Dorsey, Twitters founder, has
joined the board of Disney.
E
 xecution is key. Having a great strategy is no
longer enough you need to execute it in a
focused and disciplined way. Look at the
success of ITV in implementing its fiveyear
transformation plan, or News UKs rollout of its
new content and technology strategy, using
insights from the payTV sector.
These are seismic shifts, but we believe this is only
the first of three waves of digital transformation.

I believe the big challenge for content producers, particularly

for people like ourselves that rely more on the written form, is
five years from now, 80 percent will need to be videooriented.
Top Right Group CEO, Duncan Painter, talking to the
TheMediaBriefing.

Towards a MyMedia company

Emerging trends: Moving into

the second wave

Companies will
be able to tailor
what they offer
to match what
their customers
want to achieve
whether an
experience, a goal,
or a personal
change. We call
this the economy
of outcomes.

And this is where personalisation starts to

become a reality. Some media companies are
already starting to personalise their services,
but so far it rarely goes much further than the
if you liked this, you might like this
recommendations pioneered by Amazon. In the
second wave, all that will change.

In the second wave, digital will no longer be

just another channel for the existing economy
of products and services. Well see the wholesale
digitization of certain markets as is already
happening in some areas of the media and the
development of completely new offerings driven
by the enormous potential for personalisation.
Companies will be able to tailor what they offer
to match what their customers want to achieve
whether an experience, a goal, or a personal
change. We call this the economy of outcomes.

Imagine how this Wave 2 approach could apply

across the media sector to improve the:
Engagement in media consumption, in
music, publishing and video.

For the media industry, the second wave will

shift the relationship between media companies
and their customers from one based on selling
them services or products, to one focused on
helping them achieve the outcomes they want
whatever those are (see diagram below).

Return on investment in advertising,

focussing on results.
Quality and engagement of educational
outcomes through elearning.
(See diagrams on page 7)

Types of value
+ Value

pe

rie

En

ab

le

Ex

ce

Brand

Customer
Trust
Outcomes

Advocacy

ev
er

Lifestyle

Lifecycle

Profitable growth in the digital age

ag
es

+Data

res
Sha

In the future, we see personalisation

transforming the way people find, share, and
consume media. Ultra high speed connectivity
both in the home and on the move will
allow media owners to exploit the asyet
untapped value of their huge archives, and
offer consumers vast new choice and
interactivity. Those who watch TV, for example,
will be able to explore the story behind a news
item or documentary in more depth and
understand how it affects their own
community, as well as building their own
portfolio of favourite channels and
entertainment shows.
We see seven emerging trends that media
companies need to adapt to regardless of which
wave they choose to operate in:

and
counted is
igitally
can be dltiple media - th
es
m
ic
o
ec
tc
Sales ouered across muanscends the sp
deliv
odel tr m
m
g
in
mediu
advertis

-specic
medium
TV
ions are impressions,
ss
re
p
Im
spaper ns, etc.)
io
(e.g. New
ss
re
imp

Digital can provide publishers with superior insight on

their readers and their intentions...
Impressions are mediumspecific
(e.g. Newspaper impressions,
TV impressions, etc.)

Sales outcomes can be digitally counted and

delivered across multiple media this advertising
model transcends the specific medium

Here you know more about

who is seeing what advert
(on average) (precisely)

This is the traditional

eyeballs model

Demand Chain

Here you know more about

who is engaging with the ad
(e.g. clicking on it), or even
enquiring about the product /
service advertised

Consumption Chain
Targeted
Impressions

Impressions

Here the holder of advertising

estate does not sell impressions,
but a sales outcome.
E.g. you can charge for 1,000
units of product sold. When this
target is reached, the advertising
estate is automatically released
and used for a different ad.

Ad Engagement

Faceless reader

Ad Enquiry

Sales Outcome

Readers primary key = Known Reader

Each reader sees personalised ads but the experience is seamless

This requires insights on the readers context and desired outcomes

T
 he rise and rise of businesstoconsumer.
The internet of everything allows
companies to engage directly with the
consumer, in some cases for the first time.
This requires a customer primary key (in
other words, a passwordprotected login),
which is a new concept for companies that
have only ever operated in a B2B
environment in the past, including content
producers, B2B publishers, and freetoair
broadcasters. They will have to get up to
speed fast, and many are already investing
in the analytics theyll need to understand
customer behaviour, and develop more
personalised products and services.

Digital is transforming the way you read books . . .

C
 ontent can come from anywhere.
Companies like Mr Porter.com are leading
the brandaspublishers movement,
developing their own compelling content to
build audiences and nurture customer
relationships. Advertising agencies and
cable, satellite, and telecom distributors are
playing a bigger role too, as digital
technology makes it easier for organisations,
brands and individuals to create and
broadcast their own material. We may even
see the emergence of the popup media
network: connected individuals who work
together to produce a media experience or
services, disrupting the power of established
media companies who find themselves with
excess capacity unable to react as quickly as
their nimble new counterparts.

. . . and watch TV

Demand Chain

I bought a Book
at the bookstore

I bought a Book
online

Consumption Chain

I bought a eBook online

for my tablet.
My Book collection is now
always with me.

First Digital Wave

Set your outcomes

We can help you

achieve results that
stretch well beyond
what you watch
on TV

I buy lots of eBook online for my tablet and now I

can see what, how much and how I read.
For example: # of books read in a year, reading
style (books read in parallel, in sequence, in many
short sessions/few long sessions, words looked
up, etc.), social media overlay in the book, etc.
This helps me understand better what to read and
how to read to achieve my goals.
Second Digital Wave

Well help you

understand what you
watch and how much
you watch. Then well
connect you to other
services that will help
you achieve the results
youre looking for

Understand my
viewing habits

Support creative
organisations in
my local area

Learn more about a

particular subject

Be inspired to think
and act differently

Reduce my
consumption of
TV programmes
that I consider
bad for me

Towards a MyMedia company

 T
 he power of data. The sheer volume of
customer data thats now available is driving
the development of new products and
services. For example, Googles Art, Copy &
Code proposition now makes it possible to
personalise advertising, and Google is also
working with forwardthinking brands like
Burberry and Volkswagen to build
advertising for a connected world.
C
 anny collaboration. Were starting to see
more media companies working
collaboratively, both within their own
organisation, and with partners outside,
especially businesses from other sectors
whove been managing customer
relationships and data for decades.
Anobvious candidate would be the retail
sector, and especially the new retailers like
Amazon, who have been much better at
understanding and mining B2C
relationships. The media companies will
need new skills to make the most of the
opportunities these new alliances could
offer theres risk that the nonmedia
companies could be the ones who call the
shots when it comes to the development of
new services.
C
 lever customers and connected
communities. Weve already witnessed the
digitisation of whole areas of the economy
(look at books and music, or financial
services), and now were seeing a shift within
digital itself, as more and more people switch
from PCs to smartphones and tablets. With the
content available growing exponentially,
consumers are developing new approaches to
get what they want.

Profitable growth in the digital age

We see three ways to do this:

Search (when you already know what
you want);
Recommendation (from peers, social
networks, or other sources); and
Brand (for example, magazines or TV
channels you trust to aggregate the right
kind of content for you). Some
advertisers are now trying to reshape
their campaigns towards a whole
customer approach. B2B publishers
have been leading the way in this area:
for example, UBM is creating
communities around its brands,
allowing readers to comment and
contribute articles.
B
 etter bundling (and unbundling).
Contrary to rumour, the bundle lives on, and
consumers still value its simplicity and
convenience. But media companies are now
finding new ways to let users make bundles of
their own, whether by day (as opposed to
month) or by type of content. Digital music led
the way and were now seeing this in TV too
Sky Now is a good example. In fact we could
easily see TV unbundling becoming
mainstream. If that happens there could be a
real threat to subscription TV revenues, either
because customers migrate to the NetFlix,
LoveFilm or YouTube models, or if multiple
pay TV subscriptions or relationships become
the norm in a typical household.
P
 ersonalised, and results based,
advertising. Targeted advertising has been an
industry Holy Grail for years, but digital
technology is finally making it possible.
Individual ads can now be inserted into a
linear broadcast stream, or connected to a
specific location when people use their mobile
phones or watch TV on the move. This means
the advertising brand can measure and pay for
sales, not just for impressions. In the future,
predictive analytics and artificial intelligence
could play an even more fundamental role in
content creation: Google, for one, sees
potential in this area, buying the AI startup,
DeepMind, in March 2014.

Towards a MyMedia company

The third wave:

The MyMedia company

The bestinclass
media companies
are already
starting this
journey, moving
beyond a
multiplatform
approach
encompassing
both digital and
physical products,
towards far greater
personalisation.

As we move into the third wave, the successful

media companies will be those who are completely
centred on the needs of their customers.
Theconcept of anytime, anyplace, anywhere
will finally become a reality, and content will
be more targeted, more tailored, and
distributed across many more devices than ever
before. Bring this all together, and you have a
what we at PwC are calling a MyMedia
company.
A MyMedia company will be one that has the
complete trust of the consumer, and provides a
seamless service that delivers what customers
really want a consumer first company.
This will be highly personalised to the
needs of the customer whether an individual,

immersive experience for digital natives,

or a simpler, leanback experience for other
consumer segments. The company will have
access not only to deep and detailed customer
data, but will be able to turn the analysis
of that data into real customer insight,
based on emotional, psychological and
behavioural intelligence.
The bestinclass media companies are already
starting this journey, moving beyond a
multiplatform approach encompassing both
digital and physical products, towards far
greater personalisation. And some of the
worlds most forwardthinking companies are
even now experimenting with wave two and
three strategies.

Identify and better understand consumers; appropriately use

consumers personal information and context to offer
personalised and relevant content. Establish a level of trust.

By explicitly/implicitly assessing consumers

objectives, identify ways of supporting their
desired outcomes. Explore new business models
and revenue streams to help consumers achieve
their objectives.

Build a dedicated team to manage the

community, particularly high-value
consumer segments. Seek community
insight from data and act accordingly.

Community
management

Consider granting third parties appropriate

access to your technology platform. Similar to
how Apple gave third party developers access
to iOS and developed a long-tail revenue
stream through apps.

Identify your consumers through a primary key

a unique log in that they are willing to apply for.
Offer them a highly personalised experience in
exchange for their information.

10

Profitable growth in the digital age

Outcome
orientated

Dynamic,
personalised
content

Leverage as identied, engaged, trusting consumers to

offer advertisers non-commoditised real estate and
outcome-orientated services.

Personalised
advertisements

MyMedia
company

Open
platform and
innnovation

Context
awareness

Multichannel
native
Opt-in
customer
primary
key

Performancebased
advertising

Understand the consumers contexts

through a broader range of data types
customer prole, location, social
connections, weather feeds, trending
Twitter subjects, topical news items etc.
Use these insights to increase the
relevance of content.

Deviate from a web rst, mobile second

approach; become multichannel native and
offer near-identical and connected
experiences across channels and devices.
Let consumers choose the channel(s) most
appropriate to them. Prepare your
architecture for future channels Google
glasses, Apple TV etc.

Diversify from impression-based advertising services. Leverage

an understanding of desired customer outcomes to explore
alternative advertising/revenue generation approaches.

For example, Nikes FuelBand allows users

to track how theyre performing against their
fitness goals, and share their progress with
friends via social media sites. And closer to
home, Netflix is now generating 75% of its
traffic from its personalised recommendation
analytics. They capture dozens of individual
attributes for each film or TV show, and by
combining this with consumption data they
can identify the attributes that create the most
popular content. This gives Netflixs a significant
advantage as they begin to develop their own
content, like the drama series House of Cards:

Because we have a direct relationship

with consumers, we know what people like
to watch and that helps us understand how
big the interest is going to be for a given
show. It gave us some confidence that we
could find an audience for a show like
House of Cards.
Jonathan Friedland, Netflix chief
communications officer

A day in the life of a MyMedia consumer

A member accesses MyMedia through a web browser or app, signs in, and is presented with her
personalised page. As it is 8.30 am, and the user typically checks the news first thing in the morning,
her home page is already populated with a live news stream, as well as a set of headlines that, based on
historical consumption, she is predicted to be interested in.
There are TV and radio recommendations for whats on now, whats on soon, whats in the archive
and what is prepared for you tonight. There is also a menu of options for browsing (watch live
channels now, listen to radio, catch up on your favourite TV shows, browse the archive, see what your
friends have recommended).
The member has already shared the outcomes that matter to her and her desire to limit how much TV she
watches per week, so the recommendations she receives are exactly tailored to these specific preferences.

In the third wave we might also start to see

consumers understanding the potential of their
own digital identity, in order to get the
products, services, outcomes and experiences
that matter to them and at the best price. Some
will use intermediaries to help them do this, and
to ensure their data is aggregated efficiently, and
protected effectively. In the media sector, these
digital butlers will help consumers make better,
personalised content choices in a far more
automated fashion. This is a whole new
approach to content curation the film Minority
Report comes to mind.

Some of these partners may be media

companies; others may be new players, or
emerge from other sectors, like retail or
financial services. The one characteristic they
will all share is trust. As more and more people
live their lives digitally, trust will become
absolutely vital, because without it, consumers
will not share their data, and without data,
personalisation of any kind is impossible.
Toeven enter the game, media companies will
need to have robust and resilient systems, as well
as an unassailable reputation for the responsible
and ethical use of their customers data.
So what might a typical digital identity
look like? We describe an illustrative digital
identity on the next page, highlighting where
media data fits in.

Towards a MyMedia company

11

12

Profitable growth in the digital age

What could an individuals digital identity look like?

Who I am

My Health

My contact details: names, addresses,

phone numbers and email addresses

My registered GPs, current and past

medications and eHealth data

My digital certificates of identity

usernames, passwords, passport,
drivers license etc

How I exercise (Nike+ running,

Garmin cycling, Nuffield Health gym,
smart tennis racquet)

My academic and professional

qualifications, work history

Patient monitoring enabled by mobile

My Network

My Usage/Consumption
My driving style Incar telematics

People I know
Networks I belong to (digital and physical)

How I watch TV, listen to music, read

books and news media consumption data

My Digital Trail

My experiences (lifelogging data)

My energy use (smart meter data)

My shared content eg. video, music,

photos
My contributions (eg.Tripadvisor reviews,
product reviews, GitHub advice)
My expression (tweets, status updates,
blogs, comments, likes)

My Finances
My bank accounts, credit cards, savings
and investments, mortgage

My Preferences
How I like to travel (quiet coach,
window seat)
How I like to eat (food types, dietary
requirements)

My Intentions
My intention to sell and intention to buy

My transaction data
My insurance cover

My Avatars
Who represents me (with what data,
with what objectives)

Towards a MyMedia company

13

14

Profitable growth in the digital age

How to make the

transformation in to
aMyMedia company

We have discussed how the shift towards a more

personalised, customercentric organisation is the single
biggest change since the advent of digital media. It requires a
fundamental rethink of every aspect of a media organisation
from the personal leadership styles of executives, to the
innovation process and the legacy infrastructure of the past,
in order to capitalise on the growth opportunities and
successfully navigate the disruptive landscape of the future.

This paper looks at how Entertainment & Media companies can make the transition to a "MyMedia" company,
successfully seizing the opportunities (whilst managing the risks) that digital presents.

Towards a MyMedia company

15

There are plenty of possible shifts and inflection

points for media companies to consider carefully
and then respond to: this could be to accelerate
progress towards the inflection point or be ready
to respond when it happens.
Imagine if and when we see:
T
 he digital takeover: the point when
digital revenues from print, film, publishing
and music over take physical revenues
(and not just because physical revenues
have declined to zero).
TV unbundling going into the mainstream:
the possible decline of subscription TV
revenues as existing customers engage in
Cordcutting or Cordsharing and new
customers become cordnevers in light of
the rise of overthetop propositions like
NetFlix, LoveFilm or YouTube. Or, when
multiple pay TV subscriptions become the
norm in a typical household.
T
 he rise of the popup media network:
imagine the power of connected individuals
who work together to produce a media
experience, disrupting the power of
established media companies who find
themselves with excess capacity.
N
 onmedia companies start to call the
shots: in terms of innovative new services,
partnering with existing media companies
who move further back in the prominence.
Commercial arrangements based on
outcomes as a norm rather than an
exception: think of advertising (on all
platforms) based more on results than
impressions or inputs (driven by digital).

16

Profitable growth in the digital age

The rise of the

popup media
network: imagine
the power of
connected
individuals who
work together
to produce a
media experience,
disrupting the
power of
established media
companies who
find themselves
with excess
capacity.

A
 twintrack commercial world:
the polarisation of freetoall and pay/
protected/impossible to copy approaches.
P
 redictive analytics and artificial
intelligence playing an integral role in
content creation and distribution:
Google, for one, sees something in this area,
buying the AI startup, DeepMind, in
March2014.
The rise of the digital butler, whether
real or virtual: this is somebody who cuts
through the noise and clutter of the digital
environment in order to help you make
better, personalised content choices in a
far more automated fashion. This is the new
wave of content curation.
P
 sychology becoming a core capability:
media and medicine need to connect to deal
with consumer addictions (to being on)
become more prevalent, and to understand
emotional and behavioural responses to
media content at a much deeper level.
A
 systematic black swan: beyond the
scandals weve seen in recent years. Imagine
the impact of largescale network outtages,
hacking and meltdown.

Is your organisation ready to

respond to these opportunities
and risks?

Have you determined which wave(s) you organisation

should be operating in?
Wave 1

Wave 2

Wave 3

Improve eCommerce profitability

with a better customer experience,
more compelling and personalised
propositions, more effective
distribution or smarter pricing.

Develop propositions that encourage

your customers to share their
consumption data in order to help
them achieve outcomes that matter to
them. That way you increase customer
loyalty, increase revenue and reduce
operating costs even further.

Act as a trusted fourth party on

behalf of customers to aggregate
their digital data, and meet their
needs through managing relationships
with companies offering products
and services.

How the three digital waves are impacting the media landscape

Wave 3:
Digital identity
Consumer data services

Wave 2:
Digital consumption
Consumption based
recommendations

Wave 1:
Digital commerce

YouTube
Last.FM
iTunes Genius

Spotify
Bloom
NetFlix

Social News

iTunes
Sky
Amazon Kindle Channel 4

Flipboard
Reddit

Paywalls

Social gaming

The Times
Gannett
New York Times Atlantic Digital

King
Wooga

Freemium models

Community collaboration

Flickr
Spotify

Waze
CreativeLive

BuzzFeed
Twitter

Digital authentication
Zynga
Social Point

Reputation management

duolingo
Airbnb

Branded content

Content curation

Red Bull
Mr Porter

Pinterest
Blogger

Burberry
Coca Cola

Online service businesses

Personal data aggregators

Personalisation

LinkedIn
Evernote

Social media sites

Personal identity data vaults

Tumblr
Instagram

Towards a MyMedia company

17

How do you succeed in

a MyMedia world?

Companies need to choose how ambitious they

are and where they want to operate (Wave 3 is
potentially the most ambitious depending on
your starting point). We believe no matter
which wave you decide to operate in, there are
six sets of skills that media companies need to
master to succeed in the digital age.

Understand the
rapidly-evolving digital
customers behaviours,
needs and desired outcomes
and the impact on
protability and growth.

Be equipped to
protect your assets,
data and reputation
against the threats
of the digital world.

Dene

Understand how value is

created in the digital
economy in your value
chain and ecosystem.
Dene your new
business model.

table grow
o
th
Pr
Protect

Adopt agile approaches to

design, build and integrate
enterprise-wide social,
mobile and web solutions.

18

Know

In our experience, many companies do some

of these things well but very few are equally
proficient at all six. For example, they may
understand and analyse their customers, but
theyre slow to take new products to market;
they may be good at creating new services but
poor at protecting their value and reputation.
But in a digital age, you cant pick and choose:
you have to do them all well.

Profitable growth in the digital age

Evolve

In

Accelerate

th

e d igital a

Design your required

proposition and
optimal operating
model and clear
route to achieving it.

ge

Create

Ideation of new business

ideas, their incubation and
development to scale.

Know
Know what your customers value, need
and expect.
The interface to content has to be great, and
easy to navigate. Look for gaps in current
propositions. Work out what you need from the
data. Develop a single view of the customer,
and robust multiplatform metrics. Avoid the
traps about collecting and analysing lots of data
for the sake of it amass the right information,
filter it ruthlessly, and then make decisions.
Remember, theres no such thing as big data,
its just data knowing what to focus on
becomes as much a competitive advantage as
the data crunching itself, which is a big shift in
mindset for those media companies who have
been more B2Bfocused, like publishers and TV
broadcasters.
We expect to see more sophisticated tools like
predictive analytics and machine learning
deployed to understand the dynamics of
consumer behaviour, especially in terms of the
psychology and emotions, as consumers
demand more from their trusted guides.

Define
Define your direction based on the space
you can occupy in customers minds, hearts
and wallets, and visvis your competitors.
Focus on the demands of the future, not the
legacies of the past. Embrace new capabilities,
and encourage agility in every aspect of your
organisation. Give your people what a great
media company gives its customers
compelling stories, positive energy, infectious
buzz. Dont be afraid to disrupt the status quo,
and exploit the opportunities opened up by the
megatrends. Define the scale of your ambition
and your appetite for risk so you know how
long, big and bumpy the journey will be.
Understand where you fit in your chosen
market segment so you can make the right
investments, at the right time:
If you are a new entrant your main
challenge will be to know the customer,
define the gap you will fill in their lives
or in the market and create a viable new
and trusted proposition.
If youre a growth stock, focus on profit,
protecting value (including your people)
and accelerating to full scale.
If youre a mature business youll need to
go back to knowing your customer needs

more fully, redefining your role in the

market, evolve your organisation and
offerings to meet these new demands and
ensure your business is agile enough to
accelerate this evolution.
If your business or segment is in decline,
you need to know where and when to
restructure and rescue, and accelerate
your action plan to ensure survival.

Evolve
Priority skills at each stage of a
typical company lifecycle
New entrant

Growth

Mature

Decline

Know

Protect

Define

Know

Define

Accelerate

Know

Accelerate

Create

Evolve
Accelerate

Evolve your organisation to the shape

required in the digital age. We expect to
see operating models that are lighter
and nimbler than before, in terms of the
physical assets used, activities managed
inhouse compared to what can be done by
external networks.
Employees will become more transient, holding
multiple jobs and expecting shorter contracts
with more specific performance incentives tied
to the commercial direction of the company.
Most media companies lag the expectations of
their customers they can come across as
analogue organisations operating a digital
environment, with baggage from the past.
This is often the result of past acquisitions and
restructurings, which have left a legacy of
complexity and duplication (think of some
advertising agencies and content producers).
Find a way to create the space and appetite for
change, by transforming the back and middle
office. The winners rely on superior behaviours
and capabilities not their legacy or positions in
the market place (which can be transitory).
Getrid of any outdated assumptions and
behaviour that constrain creativity, and develop
Towards a MyMedia company

19

a hungry, entrepreneurial culture. This is tough

but possible: after seeing their traditional print
model disappear. Forbes has transformed itself
into a digitalnative business, taking lessons
from blogging to expand its contributors
a hundredfold and attract 30m users. Likewise
Bertelsmann decided to sell its shares in Sony
BMG in 2008, and then relaunched BMG Rights
Management a greenfield venture in Berlin
with three people, new systems, a clean set of
data and a customercentric approach.

Create
Create the ability to find new propositions
that really reflect the needs of customers.
The iGeneration want much greater variety,
and satisfying that appetite means investing in
R&D, sharing risks with partners and suppliers,
and sharpening the product development
process. Learn from companies who do this well
there are many in the technology and
pharmaceuticals sectors. Consider
investing in startup businesses as a way
of seeding R&D, and creating networks of
capabilities to support them. Encourage
far more collaboration inside the business what
Sir Martin Sorrell of WPP calls horizontality.
Focus on the aspects of
your business that have stayed the same
for years and challenge them.
Innovate where everyone says innovation is
harder, including the content schedule and the
pricing of advertising sales. Look at Skys new
AdSmart technology: it allows ads to be inserted
into ad spots to target specific audiences, and
early trials indicate that a third of all revenue its
capturing is new to television.

Employees will
become more
transient, holding
multiple jobs and
expecting shorter
contracts with
more specific
performance
incentives tied to
the commercial
direction of the
company.

Accelerate the
pace of change
and action
throughout your
organisation.
Make faster
decisions. Cut out
processes and
governance that
slow things down,
as long as you
comply with your
legal obligations.

Accelerate
Accelerate the pace of decisions, change and
action throughout your organisation.
Make faster decisions. Cut out processes and
governance that slow things down, as long as
you comply with your legal obligations.
Incentivise people based on outcomes rather
than inputs. Give people more accountability
and empower them to experiment, fail, learn
and innovate again. Achieving the right pace
iscritical.

Protect
Protect the value of your company, and
everything within it from security breaches,
and safeguard your products from piracy,
hacking, and cannabilisation.
Dont forget to protect strong revenues in
existing markets for example, freetoair
television is still performing well in many
markets. Commercialise your IP in the best way
possible whether through open exploitation
or protection and put the necessary incentives
and structures in place. Build trust in your
brands by protecting the integrity of your
customers personal data. The digital world
needs careful management given that it
represents a whole new realm of opportunity
and risk, in terms of people, process
andperception.

Smart companies assess their

capabilities against these six
dimensions, identify the gaps and then
put together a plan, and business case,
to make the necessary changes.

Conclusion

the lesson is that, to scale fastest and most

effectively over the long haul, you cant always be
charging ahead at breakneck speed, grabbing up
resources or territories and slapping your logo on them.
There are times when youve got to slow things way
down.
Robert I. Sutton, Professor of Management Science and
Engineering in the Stanford Engineering School, HBR Blog,
4th February 2014

20

Profitable growth in the digital age

If you can do all of this well you will

build a creative, innovative, fun and
profitable media company: be an
engaged, creative and innovative
organisation: a successful MyMedia
company for its employees, as well for
as its customers.

Towards a MyMedia company

21

Where do you start?

We believe that the shift towards a more
personalised and customercentric business
model is the single biggest change digital
will demand of the media sector. It requires
a fundamental rethink of every aspect of a
media organisation.
The winners will be those who appreciate
this tipping point, and move ahead of the pack.
Master all six elements of the profitable growth
framework, and youll have a greater chance of
becoming a successful MyMedia company.
So, to summarise:
Obsess about your customers.
Innovation, innovation, innovation:
search for the new jewel, rather than
shine a fading stone.
Create new propositions with a fresh
energy. Become an organisation that
everyone aspires to be part of.

22

Profitable growth in the digital age

Accelerate the pace of change and action.

Evolve into a lighter more agile
organisation, creating space to do things
differently.
Protect your reputation, and your sources
of value.
Were eager, willing and able to discuss how
any of the ideas weve set might apply to you.
And we can help you master each of these six
dimensions to create a strong organisation
better able to grow profitably to grow profitably
in the digital age.

Towards a MyMedia company

23

Contact
Nick Groves
TMT Consulting Leader
T: +44 (0)20 7 804 2125
M: +44 (0)7970 825601
E: nick.groves@uk.pwc.com

David Lancefield
Head of Economics and Entertainment & Media
Digital Consulting Leader
M: +44 (0)7712 140560
E: david.lancefield@uk.pwc.com
Twitter: @DLancefield

Phil Stokes
UK Entertainment & Media Leader
T: +44 (0)20 7804 4072
M: +44 (0)7802 204 008
E: phil.stokes@uk.pwc.com

Recognition and thanks to Carlo Gagliardi, David

Frankel and Tom Birtwhistle for their inspiration,
insights and positive energy.

Further reading and watching

The Global Outlook Entertainment
& Media Outlook

Profitable Growth in a digital age

Unleash your potential

The five behaviours that accelerate

value from digital investments
www.pwc.com/us/digitaliq

The five behaviors that accelerate

value from digital investments
6th Annual Digital IQ Survey
March 2014

www.pwc.com/outlook

www.pwc.co.uk/
unleashpotential

Unleashing the power of

innovation

Profitable growth in a digital age From

multichannel retail to Total Retail

www.pwc.com/innovationsurvey

www.pwc.co.uk/totalretail

www.pwc.com/us/digitaliq

www.pwc.co.uk
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