IBM forecasts shifts in entertainment sectors by 2010

By agencies   |   Wednesday, 30 March 2005, 08:00 Hrs
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BANGALORE:In a new report titled Media and Entertainment 2010, IBM Business Consulting Services (BCS) has revealed that changing shifts in technology and consumer consumption will force media companies, particularly in the broadcast and film industries, to redefine their business models over the next 5-7 years.

By 2010, IBM-BCS claims the landscape of the industry will change so dramatically that media companies will have to move to a truly open environment, allowing consumers around-the-clock access to protected media content for variable fees and the ability to largely control their own media and entertainment experiences if they want to survive.

The report highlights the struggle that media companies face, bridging from the historic model of systematic, promotional based, one-way delivery to mass audiences to a world incorporating digital technologies, analytics driven marketing approaches and distribution models leveraging bi-directional relationships. These changes will continue to redefine the economics of the media business, much as has already occurred in the music industry.

“We’re seeing the revolution in the media and entertainment industry and the market environment in India is no different. Those emerging today are embracing technological capabilities and working through regulatory and business issues to embrace entirely new methods of delivering content and related assets that are tailored to the individual choices of business partners and consumers,” said Arvind Mahajan, Partner, Communication Sector, IBM Business Consulting Services.

“By 2010, this transformation will have taken place throughout the industry, and especially in broadcast and film segments. There will be clear winners and losers. The winners will move away from traditional proprietary business models to open standards, will leverage digital technologies to undermine existing economics of the media business and to know their consumers and business partners intimately ; they will deliver media to them how, when, and where they want it. Management of digital media capabilities will be key basis of differentiation amongst media companies,” he adds.

Thriving companies in the new environment will allow customers access to information on their own terms. This includes the ability to purchase and download the rights to a book, or other media and have it configured for one or more types of devices, or delivered immediately in traditional hard or soft cover. Consumers will be offered extensions to the initial media offerings, with the ability to order the film of the book, the soundtrack or only one song, the liner notes or a single quotation to use in a variety of formats, from a term paper to a wall poster.

IBM forecasts that by 2010 successful media companies will have many of the following characteristics in common: (1) Companies will survive not just on creative content, but on creative intelligence, about customers, markets, and the value of digital assets, (2) Users’ opinions, or “buzz” will be more effectively monitored, helping to shape the content individual consumers experience, (3) Conglomerates, traditional studios and publishers will open up their inventories, putting old and new digitized content online in various forms for variable fees. The same song, movie, or other media will cost more, or less, depending on complex variables such as age, sales tracking, or even the rarity of archival content, (4) Many independent artists and producers will offer their music, short videos and movies completely free, making money instead from tie-ins, product placements, Webcast concerts and events, and fan merchandise, (5) Online accounting systems will automatically invoice huge data feeds of digital content ordered by network and cable broadcasters from distributors and (6) Millions of micro-payments will add up to sizable revenue streams from the sale of new or archived digital content, much of which will never travel to a theater, retail store or TV station - it will be delivered online.

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