31 Jul PwC: Why E&M Execs Can Not Overlook Great UX
Every day, ask yourself, what am I missing? Often times, for today’s dominant entertainment and media companies, that answer could very well be great user experience. Because without it, companies face the very real prospect of losing their competitive advantage. Having compelling content and a solid distribution network (or even both) remains crucial; however, it is the ability to give consumers a must-visit environment that is the linchpin for future growth.
We forecast slowing growth as part of a challenging landscape for the E&M industry. In PwC’s 2017 Global Entertainment and Media Outlook, we project a 4.2 percent global growth rate (CAGR) over the next five years. That’s more than a full percent lower than the projected global gross domestic product (GDP), reflecting a decline in industry share.
The industry’s digital transformation continues with internet advertising dollars expected to grow 21.6 percent year-over-year. We also expect mobile to dominate internet advertising by 2021, after it surpassed the wired internet last year. On the whole, we forecast global digital advertising to grow at a robust 9.8% (CAGR) through 2021. Non-digital advertising is expected be stagnant at just 0.2 percent over the same period.
However, the digital E&M marketplace is increasingly winner-take-all. With as few as five global companies pulling in 65 percent of total global revenues, according to eMarketer forecasts, the high-growth segments are all seeing fierce competition amongst these big players. Areas such as virtual reality, e-sports, internet video, and other digital products aimed directly at the user experience are all forecasted to see skyrocketing growth through 2021.
To avoid being left behind, companies should develop strategies to engage, grow, and monetize their most valuable customers. In other words, they need to create a user experience (UX) unique and engaging enough to be a sought-after destination over and, above all, other choices by combining excellent content, breadth of distribution, and a highly-satisfying, innovative environment. It’s an insufficient strategy to rely only on natural customer growth. The consumer expects applications to reward them for their attention.
Companies that can make the right choices between what consumers want and what technology can enable are the ones most likely to win. Users are looking for a host of features and benefits all at a reasonable price. Providers have new technologies and processes that can make the user experience more immersive, more personal, and more accessible. Social media, interactive voting and communities, virtual and augmented reality, and artificial intelligence, among others, all have roles to play.
By leveraging data and technology, companies can also get closer to their users to build relationships and grow loyal followings. The E&M offerings of today cannot thrive without the economic, social, and emotional power of fan-based followings. There’s too much competition to rely on casual “eyeballs” or infrequent users as a primary revenue stream. Fans spend more per capita, are much less likely to churn, and are often a product or service’s best advocates. The future winners are the companies that know who their users are, what they want, and how and where to deliver on that. It’s no longer enough to distribute or create content people simply want or need. Companies must create environments that consumers love. User experience is now king.
Stefanie Kane is U.S. Technology, Media, Telecommunications Strategy Leader, PwC.
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