The global media industry is grappling with constant disruption: well-funded upstarts that support new formats and experiences crowd more traditional media companies, which seek to differentiate their own offerings from the increasing volume of content rolled out by a growing roster of competitors. Predictably, competition for consumers’ attention and spending remains intense, with widespread connectivity giving consumers access to new content from an array of increasingly global providers.
McKinsey’s Global Media Report indicates that, for all the turmoil in the industry, a core macro trend remains steady: traditional media continues to fight for relevance as increasing broadband penetration brings with it new formats and channels through which consumers can access content. With 11 percent compound annual growth rate globally from 2012 to 2018, the steady growth in broadband access and the availability of attractive, cheap streaming video services have enabled a growing number of “cord-cutters” who cancel their traditional media subscriptions in favor of online content, and “cord-nevers” who never become cable customers at all. In addition, more consumers than ever before prefer to pay for access to media over owning physical media, especially in developed markets. Spending on streaming media, which includes one-time purchases as well as subscriptions, grew at a compound rate of 33 percent per year during the same period.
As media companies and brands seek productive growth in an uncertain and changing landscape, the next stage for the industry will lie in an intense focus on direct-to-consumer engagement. It is the best way for media companies to sustain strong relationships with consumers, prevent competitors from diverting them, and win back the disengaged by tailoring offers to evolving preferences. Meanwhile, competitors have increased in kind as well as number: the days when media companies’ direct rivals were limited to other media companies are long gone. Social media and technology platform providers are just as (if not more) daunting competitors for consumers’ attention, in no small part because of their direct connection to their users. In such a competitive environment, the most powerful tools for media companies and brands to build and strengthen relationships with consumers–and achieve sustainable growth—will be the following:
- content creation, sourced and created with a focus on strategic goals
- curation of content and experiences to maximize consumer engagement
- using industrywide consolidation as an opportunity to overhaul operating models
Download the full report, When the content consumer is king: Adapting to the media and marketing power shift (PDF–296KB).