Publishers, studios and broadcasters need to seize the opportunities presented by the growth of social media and video on mobile devices in 2011, according to Ovum. However they should also be aware of the long-term threat these channels pose to their share of audience and advertising budget, finds the independent technology analyst.
In a new report* Ovum states that opportunities lie in using social media as a new channel to engage directly with the audience, derive greater insight into their preferences and demography, and to directly capitalise them through products such as casual games or virtual goods. Combined with the growth in video viewing on the latest generation of smartphones, this is an important method to get the attention of the highly specific audiences that advertisers are increasingly looking for.
However the threat social media poses is ever present and Adrian Drury, Ovum analyst and author of the report, said: "With the massive audience clustering around platforms such as Facebook, there is great potential for publishers and channel programmers to use social platforms for audience acquisition, engagement and profiling.
"However social media, also present a clear threat to traditional media and entertainment platforms as it steals a growing share of audience attention and advertising spend"
In the report, Ovum also looks as the growing trend towards defensive collaboration within broadcast, publishing and further down the content supply chain to studios, music labels, and production companies. The goals are to define common standards, labels, and service platforms to drive a single experience for the customer across multiple devices, as well as establish a framework for shared technology infrastructure costs and supply chain efficiency.
Defensive collaboration within this market, however, is beset with execution risk. As the music industry has demonstrated, mounting a coordinated response to a disruptive technology threat in a hyper-competitive market is highly challenging.
Drury states "In 2011, the market will see ongoing polarization between two distinct classes of technology investment in media and entertainment markets. The first is the broad-based and highly strategic, in many cases employing shared infrastructure models between former competitors - examples include UltraViolet, YouView, HbbTV projects across Europe and digital newsstand projects within the publishing industry. This type of project presents an opportunity for the IT vendor and SI community to deliver technology services and potentially play a vital project co-ordination role.
"The second strand is tactical, driven by product managers looking to exploit audience engagement and revenue streams in the short-term that have been opened up by new consumer technology platforms. These projects are creating opportunity for highly agile SaaS vendors that are able to offer a low-cost route to fast service deployment and experimentation."
