Few sectors of the economy have been impacted more by digital disruption than the entertainment, media and publishing industry. Content has always been the industry’s currency, but consumers who were previously more passive recipients of content have been transformed by technology to become active, empowered consumers, demanding premium content anytime and anywhere.
Singapore is the current leader in terms of mobile viewing in the Asia-Pacific region, with consumers spending 55 per cent of its viewing time on smartphones and tablets. This clearly has profound implications on the businesses of the incumbents like Singapore’s Public Service Broadcasting or Singapore Press Holdings.
As technology has made content available on-demand and across devices, traditional media companies are being increasingly forced to change their business models to compete with technology companies like Google, Facebook, Baidu and Netflix.
A recent study by the Economist Intelligence Unit (EIU), Connecting Companies, revealed that while media organisations are all well aware of the challenges posed by digital disruption, they are more likely than other industries to say they are merely ‘coping’ with the effects of it, rather than embracing or being actively responsible for disruption themselves.
In the face of the competitive threat from the new players, one way some more innovative media companies are responding is by turning to digital technology based partnerships. Rather than invest in their own solutions to take on the technology giants directly, media companies are seeking out partnerships as a way to access new technology and bring innovation into their businesses quickly, and at relatively lower cost.
Digital partnerships–more than just a ‘coping’ mechanism
As a means of navigating digital disruption, a number of companies are embracing partnerships with the very companies that would otherwise be perceived as competitors. The EIU found around two-thirds of companies in the industry have been involved a digital partnership, such as an alliance with an established technology company or investment in a start-up, for more than a year.
For traditional media companies, mobile apps and services have become a major focus. Last year, American media giant CNN teamed up with digital messaging application Snapchat to reach younger, digitally-engaged consumers. CNN now delivers news to the app through ten-second videos.
In Japan, one of Japan’s largest publishers of magazines and Magna comics, Kodansha responded to falling sales of physical copies by partnering with Japanese internet company DeNA to take their catalogue online.
Partnerships are also important for providing access to new technology. In Australia, when the cable TV provider Foxtel wanted to develop an unlimited movie streaming service Presto, it tapped Ooyala, a San Francisco based provider of intelligent streaming video services, to provide some of the technology required to build their platform. This was enabled in part through Foxtel’s relationship with Telstra, which had acquired Ooyala.
Interestingly, the media industry is also heavily focused on creating partnerships with technology-driven start-ups to get ahead of the pack and lead disruption – more so than any other industry. Sky, the British telecommunications and broadcast television company, established Sky Startups three years ago to engage with start-ups within the industry and stay ahead of potentially disruptive technology trends.
So what are the benefits of digital partnerships? Digital partnerships have been proven to help companies deliver more exclusive and premium content, increase online presence and brand awareness, and reach new audiences.
There is also more on offer, including aiding global expansion and accelerating innovation. It’s therefore no surprise that the EIU’s Connecting Companies study showed that expanding into new markets was the primary motivation behind more than half of the respondents’ existing digital partnerships.
It’s time for more companies to use digital partnerships to experiment with new technologies and services, and establish new sources of revenue for the precious content they are producing. Helping to foresee, rather than simply react to consumer demand, is the way forward. Companies that fail to do this run the risk of being swept off their feet by the next wave of disruption.