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Winning in 2020: What Incumbents Can Do to Compete with Netflix, Disney, Hulu, Apple

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The dynamics of competition in media & entertainment are evolving as a cohort of super-competitors and more focused, nimbler players are emerging on multiple fronts. Media and entertainment providers, faced with changing consumer habits and expectations, are experiencing existential challenges to their business and operating models. Among those at risk: Traditional fixed-line and satellite pay TV providers, over-the-top (OTT) providers, pure-play direct-to-consumer video and audio providers, as well as radio networks and film and TV studios. 

According to the Ericsson Mobility Report from June 2019, streaming consumption continues to dominate, having grown 10X in the past five years. Mobile and Wi-Fi-enabled devices are the key delivery mechanisms of this trend, with video comprising 58% of all downstream traffic and consumers spending 17% of their time watching OTT content via smart TVs and related apps.

With 158 million subscribers, Netflix is the company on everyone's lips, but offerings from Disney, AT&T's Warner Media, and NBC—along with the continued growth of YouTube and specialized players like Hulu, Pandora, and Spotify—mean an already hot market is becoming even more competitive.

In newly issued reports, Disney has promised Wall Street that Disney+ will have between 60 million and 90 million subscribers worldwide by 2024 (capturing 15 million subs in the first two weeks), while Apple TV is expected to add 100M subscribers in the same period that fixed-line/satellite providers are predicted to lose 6.2M customers to cord-cutting.

The good news for traditional Pay TV providers in 2020, says a joint report from Accenture, Ovum and PWC, is that the barrier to entry for media and entertainment companies remains extremely low. The same technology that has become a massive enabler for new market entrants can also be used by incumbents saddled with legacy systems to transform their businesses into nimble, omnichannel offerings.

Omnichannel Market Values

Key to getting beyond legacy and homegrown system limitations is understanding the business rules that govern the new landscape. We have the following suggestions and best practices:

Subscriber lifetime relationships should be based on 1:1 relevance. Customers must be empowered with individualized content, product recommendations, personalized messaging, tailored communications, and the most relevant next-best-offer (NBO) powered by third-party AI engines. 

Providers sell more by enriching the subscriber journey with digital transparency and intelligent engagement across each stage, from evaluation to purchase, care to retention, and advocacy to lasting customer value.

Providers grow faster with seamless omnichannel engagement across media and entertainment business lines. Providers enhance subscriber value across business lines by delivering seamless access to any content, consumed anytime, on any device.

They also prevent revenue leakage and improve profitability while standardizing bundled sales and service processes across all lines of business. Through personalization, they guide subscribers to select the products and services providing the best value for their needs, while protecting margins through sales process optimization.

Serving customers intelligently deepens brand loyalty. Personalization, done right, delivers more than customized bundling and effective cross-sell. It also leverages an industry-specific data model with packaged subscriber-model capabilities that include bill payment and renewals. Also, subscribers can benefit from a loyalty program—the longer a household has been a subscriber, the more benefits they receive. 

This new model deflects support calls through omnichannel digital service to enable customers to self-care on their own terms.

Providers must compete with continuous industry innovation and business agility. The way to break through legacy customer relationship management/operations support systems (CRM/OSS) barriers is to deploy a 100% cloud native platform that embeds industry-specific intelligence across the sales and service lifecycle.

For media and entertainment providers, the enhanced cloud model reduces the complexity of legacy configuration, activation, fulfillment, billing, and servicing by migrating to a digital platform that ignites business-led, non-stop innovation, protecting your organization against further industry disruption. 

Total Subscriber Lifecycle

The goal is to empower incumbents with an omnichannel platform that allows them to grow faster, increase profitability and subscription revenue, retain subscribers over multiple renewal cycles, as well as increase overall agility, enabling them to deploy new offerings rapidly and lower total cost of ownership (TCO).

In place of siloed, on-prem offerings, the total media & entertainment cloud offering integrates at the campaign level. Its embedded intelligence helps you manage lead flows right from your Salesforce Marketing Cloud or whatever cloud solution you use for outbound lead management.

New subscribers begin their journey with maximum flexibility. They should be able to choose specific channels or simple bundles (e.g. news, leisure, other) or any combination of the aforementioned, then subscribe on a standalone basis or for their preferred duration (e.g. 1 month, 3 months, 6 months, etc.).

From the provider perspective, the solution offers a 360° customer view. The result is subscriber management brought to a new level of quality and profitability. Providers can not only diagnose subscriber issues on a granular level, they can also leverage real-time data from channels for self-care for sales and service. For omnichannel incumbents, there is the added benefit of integrating self-care capabilities with the traditional call center.

The total media lifecycle solution also includes digital commerce flows to support high-volume B2C customer transactions. For instance, if a provider is expecting a major surge from campaign-based outreach around a major media or sports event, digital commerce APIs can optimize user experience during peak times without impact to operational quality. 

Since these processes are not standard, we recommend an out-of-the-box solution that allows for rapid customization through declarative "clicks," not custom code. For instance, a customer could do a flash sale, processing 1 million day passes in a 24-hour period. With a caching solution, they could process 20 to 40 transactions per second. As B2C providers know, extremely low latency is the only acceptable method to reduce B2C order leakage.

Successful lifecycle management depends on both conversion and retention. For example, once a day-pass or trial period expires, it's about presenting the right guided flows that drive renewal as well as cross-sell/upsell. Again, these flows can be digital or work in tandem with a traditional call center for service as well as sales, with all the benefits of a fully cloud native solution. 

The upshot, beyond increased revenue and overall efficiency, is real-time clickstream data that a provider can redirect into their business intelligence and analytic systems to trigger new, more intelligent offers through next best action/offer or into DMP systems to create look-alike ad/social campaigns. For incumbents that want to transform their business, this is the kind of vertically specialized, end-to-end subscriber management that separates an ad hoc or legacy solution from a true omnichannel offering and one that brings the traditional provider's long-term customer expertise to the fore—in 2020 and beyond.

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