We are at the beginning of a massive disruption in the media industry. Another disruption, you will think. But this disruption is different from previous ones. It is happening not necessarily in plain sight; it is rather subtle and most people might not see it as one unique manifestation.
The disruption is not technology-based and it is driven by geopolitical forces and changes in consumer behavior. There is no single cause and effect, it is more like a multi-symptom change with lots of undercurrents and different waves.
A Geopolitical & Behavioural Shift with a huge impact on the Media & TV Industry
The TV and media industry will not be longer than it used to be. The industry as we know it a few months ago is now in the middle of a most dramatic change. There has a lot been said and written lately about the seismic shift, that the Russian invasion in Ukraine is causing from a geopolitical perspective. It does impact our industry in various ways and these will cause massive disruptions. It seems to happen slowly maybe, but I had already hit us – rather sooner than later. We will see lots of trickle-down and ripple effects over the next few months and years. Some we already witnessed last few days and weeks.
Here are the impacts on industry driven by the paradigm shift:
End of globalization: the world as a market is divided now. Expect more division to come via sanctions but also due to more alert, purpose-conscious customers. You cannot expect to conquer the world any longer- but only parts of it. The market size is shrinking effectively. Local markets, their needs, and tastes will become more important in your strategy for international expansion.
Decoupling into Ideological Blocs: the world will see a decoupling into ideological trading blocs. The divisions will sometimes be very obvious and go along state lines. Sometimes it will be less visible and might divide families, friends, and communities. People will choose their media services along such lines and you might need to decide which side of the spectrum you are going to cater to.
Value- and Purpose-driven management: customers around the world have become more conscious about from whom they buy their products and services. At the same time, employees want to work in organizations that make them proud and fill them with a sense of meaning. Just doing a job because it pays well, does not motivate people any longer. Just buying a product because it is cheap, is a short-term satisfaction only. In a speedy and never seen reaction to the Russian invasion, many businesses have been aware of this and seized doing business in Russia. Consumers not only applauded this move but inertly demanded it. They nowadays measure the benefit of a purchase beyond the immediate consumption but also how it impacts the world socially and ethically. They want businesses to be purpose-driven and act on a set of moral principles and values. It is a great new re-invention of capitalism and some already consider this the only way that capitalism can survive: to eventually do good and strengthen the aspect of the capital where it used for the betterment of humankind.
In this context, it will be extremely interesting to see how Elon Musk’s purchase of Twitter plays out. Is Elon really concerned about free speech and if so, what definition of free speech does he apply? Will he use Twitter as his personal playground to humor his vanity – or will he indeed make a positive impact on the world by creating a truly human-centered, value-based platform that fosters understanding, communication, and advancement for making the world a better place. I have my doubts – but it is a unique and historic opportunity for Elon to show that capital can be used for good.
Demand for Impactful & Purpose Driven Content: I know I repeat myself in each newsletter lately. But this aspect is so important; I cannot repeat it often enough. The market trends as outlined above will increase demand for content that has a positive impact. Topics like positive purpose, world peace, and humankind on a very abstract meta-level are the guiding stars. They manifest themselves in more tangible matters like sustainability, ecology, social justice, equity, inclusion, and diversity, for instance. Communities – both real and virtual – that are created around these subject matters become the drivers of the change and the most valuable target segment for any business. They crave information, knowledge, and content both entertaining, educational, and inspirational – but also for services to help them organize their community and exchange.
I believe, for instance, that the CNN+ streaming service has been a massive failure because CNN did not clearly address the needs of its main user community. They fell in love with the product and lots of nooks and crannies – instead of delivering what their target audience really wants and needs: live news wherever and whenever you want to access it.
The Rise of Content & Community Silos: the different currents and developments will ask for places where people can convene around their main purpose. It is an immense opportunity for brands and especially media businesses to become the virtual campfire for such communities. TV is still the best way of creating such campfire experiences and businesses have to think hard about how they can serve their communities both via content and services.
This also drives the need for more types of subscription services. Creating your community renders itself to creating subscription services. It is strategically also relevant that you consider bundling your offer with products and services that might not necessarily be in your core domain but add great value to your community (see for example the move by DAZN to add betting services).
It is important not to do window-dressing only when it comes to your company’s purpose. You must also look within and clearly revisit the values that your business is based on and make sure these values are becoming a core principle of everything you, your management, and your entire organization do.
A good (or rather bad initially) example is how Disney got into trouble when it was lately way too slow to address the reactionary government in Florida, which demonizes certain communities and creates an environment of hate and division. In this case, Disney has been reminded by its own employees when it comes to rights for the LGBTQ+ community and that Disney has an obligation to its own values and employees to defend these rights actively.
Budgets will grow Creators Economy & FAST Channel Universe: let us not forget the overall economic effect of the geopolitical shift and decoupling into ideological trading blocs. Budgets on all levels will be thoroughly scrutinized and decreased. Households will have fewer available resources to pay for entertainment and media. Businesses will earn less and need to likely cut down staff. The fight for the best talent will increase. Efficiencies in your operations need to be discovered and quickly enhanced. Value in all of its sense needs to be demonstrated towards your customers, your employees, and stakeholders.
It will naturally drive you towards all kinds of partnerships (see bundling of services above) in and outside of your business. Consolidation will take place and you need to look carefully at whether you are going to be a hunter or the prey.
On the other hand, times like this are meant for creative ideas to arise and the so-called “creators economy” will boom. The demand for content is continuing to grow massively; and the content needs to be more individualized, more targeted, and fitting.
In a similar fashion, advertising will again become an integral part of media: companies want to showcase their purpose-minded image and consumers want to be educated exactly on that front. And as the commercial pressure is increasing, businesses need to sell and hence need to spend marketing dollars. This will help to grow the universe of FAST channels and also should make you think for yourself if a FAST channel is maybe the ideal tool for your business to build a community and better shine the light on your brand.
Uff . … That is a lot to take in, isn’t it?
The various developments might seem overwhelming and threatening to some of us. They are nevertheless also great opportunities to build your brand and a business with a positive impact on humankind – and don’t we all want to make this planet a great and happy place to live on?
If you want to learn more about these trends and how you as a business can react to them, do not hesitate to contact us. My team and I would be delighted to assist you in navigating these currents.
We can help you to build a resilient, purpose-driven media business, assist you in creating or finding impactful content, work with you in launching a TV outlet such a FAST channel or advising you in strategic initiatives such as M&A, new product and business developments.