Salesforce has published its survey of 350 media and entertainment decision makers across seven countries. The results – its new Media and Entertainment Industry Insights Report. It shows where the industry is focused. Some of the key findings include:
Industry is focused on customer experience
Customer experience is paramount to any business strategy, with 86% of consumers now saying experience is equally important to product quality. And, with offerings spanning streaming services, broadcasters, gaming platforms, esports, and more — customer experience is a critical differentiator for the media and entertainment industry.
In fact, media and entertainment industry professionals surveyed by Salesforce cite increasing competition as their top challenge — outranking factors such as third-party cookie depreciation, decreasing subscriber values, and increasing costs from inflationary pressures. As such, improving customer satisfaction (CSAT) is the industry’s top priority.
Case in point: A recent Salesforce consumer survey found that while 65% of consumers subscribe to at least one video service, 39% of them felt they weren’t worth the cost. Satisfaction with value was even lower for audio, digital publication, and gaming subscriptions. As a result, media and entertainment companies report significant annual customer churn rates — 17% on average — with higher figures reported among streaming service providers and cable/satellite TV operators.
Web3, the Creator Economy, and other trends
In addition to providing differentiated experiences that keep customers happy, media and entertainment companies must support a strong bottom line. Advertising remains the leading source of revenue for media and entertainment companies, both in terms of the share of companies that collect advertising revenue, as well as the average revenue per user (ARPU). Yet the outlook on advertising spend is far from positive, with a mere 15% of respondents expecting an increase over the coming 18 months.
Projected Advertising spend over the next 18 months
Seeking to buck a downturn in advertising spending and capitalise on new technologies and consumer behaviors, media and entertainment companies are actively seeking to diversify their business strategies.
Influencer marketing is an example of this trend. 65% of media and entertainment professionals reporting that their companies partner with influencers to promote products and services, attract users to platforms, and more.
Web3 is also getting serious consideration from an array of media and entertainment companies. They are interested in its ability to drive revenue and offer differentiated experiences. Web3 use cases related to loyalty programmes, real-world asset management, and content monetisation are seen as having the most promise for the industry.
Efficiency initiatives underpin automation investments
While the overall macroeconomic outlook remains decidedly mixed, the media industry is already experiencing a downturn that’s driving caution in spending. This is reflected in budget outlooks. 64% of survey respondents expect a net increase in overall operating budgets over the coming 18 months. However, resources like marketing budgets and headcounts are less likely to see a boost.
Facing the need to do more with less, they seek to win discerning audiences against fierce competition. Media and entertainment companies are focusing, in large part, on efficiency initiatives.
Workflow and process automation is a large part of this equation, yet much work remains to be done. For example, no more than 37% of survey respondents say a given process at their company is completely automated. Tasks like churn prediction and content production, in particular, are likely to be completely or mostly manual.
According to Christopher Dean, SVP and GM of Communications, Media & Entertainment at Salesforce, “A saturated media market gives consumers endless new options to choose from. Combined with the challenging economic conditions, requires media and entertainment companies to differentiate themselves while finding ways to reduce costs.
“Technology, like automation, real-time data, and generative AI, that can drive efficiencies and better customer experiences. This will be critical when it comes to remaining nimble and standing out in a crowded marketplace.”
Methodology
Unless cited otherwise, data is from a double-anonymous survey of 350 media and entertainment industry professionals. All had the title of director or higher in Australia, Canada, France, Germany, India, the United Kingdom, and the United States. The survey was live from December 14 through December 29, 2022. All respondents are third-party panelists. Additional information can be found in the report.
Enterprise Times: What this means for business.
The media and entertainment industry is constantly evolving. The emergence of streaming, social media, and subscription models over the past decade, has turned the industry on its head. Furthermore, technological change threatens to fundamentally reshape customer expectations. As the economy enters uncharted waters, consumers are re-evaluating what’s valuable. Consequently, the industry is under a new level of pressure — and companies will need to fight for every dollar, pound and euro.
As a result, much of Salesforce’s research confirms these key trends. Customer experience is paramount to any business strategy. Consumers now say experience is equally important to product quality.
Industry decision-makers cite increasing competition as their top challenge amid generally flat or lowered budget outlooks. Many are predicting ad spend to remain flat or decline over the next 18 months. 99% of companies are also investing in operational efficiency to offset higher costs. However, few have fully automated manual processes like churn prediction and content production. Thus, it remains interesting to see how these companies will survive during these unpredictable and disruptive times.
