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 27 Jan 2006
It is apparent that the convergence that was so often talked about in the last millennium is now a reality. Certainly, based on the discussions that my colleagues are having with executives both in the region and globally, it is clear that by the end of this decade we will be living in a fully converged world.
Our research highlights that, in this converged media highway, consumers are in the driver's seat. They already are using iPods to make their own playlists. They will increasingly use TiVo to make their own viewlists. In some territories, satellite radios stations pump music into their cars free form commercials.
This is the world where one no longer goes into a coffee shop for a cappuccino and the potential for engaging an attractive fellow caffeine addict in conversation, but instead where the laptop is now as common as the cinnamon!!
Such consumers pull stock market updates, SMS messages, wallpapers, ringtones and short-form videos on to their cellphones. In short they generate their own content, mix it and (to the despair of rights owners) share it.
Broadband and IP, both of which are the true pandemic of the digital world, represent the glue through which consumers organise their productive, leisure and social time. At the same time, this is taking down the walls separating the media, telecommunications and advertising industries.
Is it therefore that these multi-mode, multi-device, multi-tasking, converged media consumers have overtaken traditional audiences as the most important market for media and telco companies? Not yet, but this dream (for some!) is very soon to become a nightmare for others, as exclusive content will no longer guarantee competitive advantage. Economies are governed by scarcity - which is, of course, negated by convergence. In a converged world, the opportunities for consumers to access and manipulate communications, content and services are indeed abundant.
In a converged media economy, the scarce resource is consumer time and attention. Whatever the amount of storage or transport of digital media, the ability of an individual to experience media or communicate at a given point in time is limited and, as such, valuable. This is already driving consumers to pay a premium for services (and devices) that allow them to configure a lifestyle 'infomediacomm' experience. This 'Lifestyle media' is bridging the world of unlimited channels and content with the world of limited consumer time and attention.
It is most likely that market power will be with those players that organise their assets (either communication, content or distribution) to create a pull-orientated, consumer-driven value chain for converged services, as opposed to a push-oriented, supply-driven value chain.
That means that the key will be a new approach to audience measurement, combined with new distribution models that look less like programming schedules than media marketplaces, which will allow the consumer to search and then configure their optimum infomediacomm experiences.
The choices that consumers make in finding, selecting and exchanging for content and services will be the activity that is tracked and measured by leading providers, in order to create value for their advertising partners. These challenges can no longer be ignored, but I sense that a large part of the industry is still in denial about the impact of this change.
This article is also featured in the 27 January 2006 edition of Media Magazine.
** This article was written by Marcel Fenez, Partner and Asia-Pacific leader for entertainment and media practice of PricewaterhouseCoopers in Hong Kong. |
