It seems clear to everyone that the media industry is undergoing a fundamental transformation, from all perspectives. Consumers wanting their content anywhere, anytime and on any device, and new technologies enabling superior media delivery and experience wreak havoc on the industry. All these changes come from new ways of outsourcing media technology development, and enabling innovation at a faster pace.
It is not my intention to highlight and elaborate again on the media business trends that most of us already know and actually see happening. But let me just mention a few major ones without any further ado:
- Blurring industry lines – cable and satellite companies offering quad play and … telcos offering quad play, Facebook stepping into video (broadcasting?) and newspapers, companies are nowadays defined more by their origin rather than by what they actually do (as they are actively trying to reposition)
- Advertising on its head – traditional above-the-line and below-the-line getting obsolete. Online, email, mobile, digital in general winning the field very quickly
- Flourishing all-you-can-eat models – not only audio (Spotify), video (Netflix) but also eBooks (Scribd)
- Content licensing on its head – since business models change, so do have to licensing models for all-you-can-eat, for online-offline-mobile bundles as well as other combinations
- New powerful digital channels – Amazon, Spotify, Facebook …
- Traditional channels like broadcasters (linear TV), book stores, newspapers under serious threat of their business and distribution model getting obliterated
- Flourishing OTT models – Internet disrupts traditional distribution channels and new players can successfully compete without a need for a proprietary infrastructure
- Flourishing platform models – ecosystems built around technology platforms (Apple, Google) play also an important role in media as they might become (actually are) media distribution and consumption channels cutting out everybody else. This impacts not only current content distributors but also content producers (increasing bargaining power of platforms)
- Personalisation – consumers demand individualised experience, the marketing of one. While so far it was economically unjustifiable, it becomes an imperative in media consumption
- User experience is the king – there is a dramatic shift driven by new consumers generations demanding seamless and superior experiences (vs technology geeky solutions)
- Big data – more important than ever and more available than ever before. In the new era, there is no place for a guess work, consumers’ behaviours can be precisely measured (true actions), analysed and fed back to improve the experience further. This almost infinite loop is a must for most solutions
I could mention probably a few more but this is not the essence of this post. Summarising: the media industry is undergoing serious disruption right now! As a matter of fact, these industry changes also put the entire ecosystem upside down including the whole media technology domain. Notably, the industry changes bring along new (or amplified) technology trends. Just to mention the major ones:
- Proliferation of (new) cloud solutions – it is not unheard that companies can run most of their core operations from the cloud. Therefore the need for technology ownerships subsides
- Multiplication of standards and technologies – and only more are coming. There is a whole gamut of technologies available, driven by innovation but also various interests. Fortunately software is patient and can include most of it, the complexity of solutions increases though
- Open standards or dominating standards – at the same time the industry wants to reduce complexity and converge to a few dominating solutions. This accelerates go-to-market as well as consumer adoption curves
- Software rules – software defined networks, software defined distribution, software defined security …
- Increased drive for interoperability (and reduced push for proprietary technologies)
- Big Data Processing and Analytics – as already mentioned, lots of real data but the intelligent decisions cycle still needs to make sense (data-information-knowledge-wisdom)
- Customer experience-driven development – now technology truly needs to serve the experience, going much beyond simple functional purpose. The winners will excel in seamless integration, bug-less products and sheer simplistic designs
- Agile and scrum development methods – the industry has already adopted this model as the only one truly enabling meaningful innovation and value delivery. Technology more than ever needs to deliver value
And again, all these changes and trends shake up the entire media ecosystems. Content owners, content distributors, consumer electronics companies and everybody else get their goose bumps pondering whether they will be in or out of business tomorrow. And as they are scratching their head on how to crack this digital transformation nut, it is time to rethink strategies and reposition and regroup.
I argue that though these changes impact all business functions, product management and product development will be impacted the most. The way media technology products, services and solutions are designed and developed is undergoing a significant revamp. Let me point out several key imperatives industry players need to embrace to ensure their future in the business.
- Nobody now can be a jack-of-all-trades. Consumer demands for ever-improving experiences and the complexity of new media solutions enforce companies to concentrate on their core value proposition (note: NOT technology). What is really that you offer? Is it content or content delivery or maybe mobile user experience? Focus on your core competence and seriously consider outsourcing (partnering) for everything else. There are companies out there that can deliver excellent solutions (better than yourself) that will become components of your final product. So why build it yourself? Consider Make-Buy-Partner matrix for software outsourcing, application outsourcing and software development in general. Consider also outsourcing other IT, marketing or even operations-related activities
- Become lean. The speed of change renders old-school big bets obsolete. Media companies need to employ lean methodologies namely elimination of waste, learning and pivoting, all designed in the feedback loop. Moreover, this lean method by definition includes customer development. And yes, even incumbents must continuously involve customers in their products life-cycles right in the beginning and not be afraid working with minimum viable products. Media consumers do not have a patience to wait for new market innovations, they want to experiment with them right away.
- Become flexible. Given the speed of change, you can never be sure what technologies and standards will need to be implemented in your solutions or alternatively taken out. Consider video streaming protocols and DRM technologies. Maintaining internal teams supporting RTMP, IIS, HLS, MPEG-Dash and Marlin, PlayReady, Adobe Primetime or Google Widevine. You can simply hire external on-demand software engineering teams on an on-going (need) basis. Software support can also be arranged the same way. When you consider outsourcing and partnering for software components development, you will not only reap the flexibility benefits but likely also the ones related to cost, speed, quality and focus.
- Become agile. As a matter of fact, this is a consequence of the drive towards becoming lean. Agile methods can be deployed not only to product development but also in marketing, operations as well as other business functions.
- Increase interoperability. With the ever increasing number of standards and technologies, solutions need to be open to quickly integrate with other solutions. And it is not only because of the ‘cloud’ phenomenon. Solution architectures need to be build with plug-and-play in mind and that will help with leveraging their core capabilities
- Source the best talent from everywhere. The reason why I strongly recommend partnering and outsourcing is that talent can be found anywhere. By broadening your perspective (beyond your current network and partners), suddenly you will be able to access world’s best resources. Open up for remote work, remote development, remote outsourcing partners to utilise the best resources for building solutions that exceed your customers’ expectations.
- Lead with software-defined. Bet on software, software is flexible, software is patient and, except for very critical components, most systems can be software-defined (e.g. software defined networks, software-defined security). This trend will only increase and the impact of software will become even bigger.
- Lead with design and customer-driven solutions. Customer will demand only excellent experiences. Therefore, media companies must develop fully customer-driven solutions. Analysing customer journeys, improving them, becoming obsessed with customer touch-points is an imperative. In media, where omni-channel and multiscreen experiences are already a norm, companies must adapt design as an essential element of their solution crafting (and delivery)
- Use (and create) on-demand. Needless to say, we live in on-demand times from availability, consumption and business perspectives. And this is true in both B2C and B2C. We are not used to pay for what we don’t use. Interestingly, the development of subscription models might be an exception but it still feeds the idea of on-demand availability.
- Understand you are a part of a bigger proposition. Finally, solutions are more than ever part of a bigger propositions. Consider multiscreen solutions. These include a whole plethora of technologies and require significant integrations. And consumers will only care about the final experience. You must embrace the idea and assume it is a norm that your solution is only as good as it contributes (brings value) to this bigger consumer solution. It means the entire ecosystem is working on it and competitive and cooperative forces blend.
Summarising, the changing media landscape forces all players to reconsider their product development strategies. To stay in the game, companies need to develop their partnership models. Notably, software development should more than ever be exposed to outsourcing. And nowadays, software outsourcing models can successfully be supported by increased knowledge on remote teams collaboration and offshore or near-shore outsourcing challenges. Ekipa with its novel marketplace and market network approach truly helps companies get through the stormy waters of the industry disruption. Building great products and solutions can be done with the support of best-match teams that are not formally part of the organization but they certainly feel like. Resource constraint is not longer an issue and sourced competencies become part of the competitive advantage!
So lead the revolution, grab the opportunity and succeed!
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