Technology is massively transforming the media and entertainment industry by creating new opportunities and better revenue models. The media consumption pattern is changing rapidly, and the consumers now have the power to choose and build a personalised library, which was not possible earlier. Photo: Gerd Altmann/Pixabay Technology is massively transforming the media and entertainment industry by creating new opportunities and better revenue models. The media consumption pattern is changing rapidly, and the consumers now have the power to choose and build a personalised library, which was not possible earlier. Photo: Gerd Altmann/Pixabay
JOHANNESBURG – Technology is massively transforming the media and entertainment industry by creating new opportunities and better revenue models. The media consumption pattern is changing rapidly, and the consumers now have the power to choose and build a personalised library, which was not possible earlier.
The media and entertainment industry has a great potential to train more youth, build excellence and reduce youth unemployment that’s now above 60 percent.
Technology, media, and telecommunications companies are at the heart of the digital economy – building the infrastructure and devices that connect people, businesses, and countries. Companies across these industries generate more economic profit than any other sector of the global economy, yet they are not shielded from the disruptions that they themselves create.
Our experience in helping technology, media, and telecommunications leaders create change that matters in this rapidly developing market – to build internal capabilities, integrate digital and analytics tools into their organisations, and transform the ways in which they work to improve their business in substantial, sustainable ways, it’s a style we need to see it affect the South African and the rest of Africa markets.
Media and entertainment in South Africa is expected to reach R177.2 billion by 2022, up from R129. 2bn in 2017. The Gauteng film industry plays a vital role in growing a “smart” economy, a creative economy that not only attracts cultural workers and quality jobs but also contributes to economic growth and social development. With an annual contribution in excess of R2.5 billion and direct employment of more than 8 500 workers, the Gauteng film industry plays a significant role in the provincial economy. And, given the nature of the industry, many more thousands are employed as freelancers.
If they are successful, digital transformations result in digital organisations – companies whose strategies, business and operating models, and cultures have digital technologies and capabilities at their core. Digital ways of working shape everything that these organisations do. In the media business – one of the first to undergo digital disruption – most legacy companies started the transformation to digital organisations years ago. But establishing a functioning digital operating model requires a big leap, one that relatively few media companies have taken so far.
Most legacy companies in this business face two industry-specific obstacles in their efforts to meet the digital challenge: their lack of digital, data, and multimedia expertise and the institutional lack of clear decision making, accountability, and effective interdisciplinary collaboration. True digital organisations are still, for the most part, in companies that are digital natives.
South Africa has a vibrant, growing film industry that is fast gaining recognition on the global stage. Foreign filmmakers are taking advantage of the country's diverse, unique locations – as well as low production costs and favourable exchange rate, which in some cases make it up to 45 percent cheaper to produce a film in South Africa than in Europe or the US and up to 20 percent cheaper than in Australia. In addition, South Africa’ unique location, tourism hotspots and attractive landscape have been key to marketing the potential of the local film industry.
The stunning strategy in the media and entertainment invests in the production of motion pictures as our primary strategy to develop a sustainable local film industry, while also funding media projects that strengthen the entire value chain. The development of digital cinemas in townships, through pilot projects in Soweto, provides facilities that are sorely lacking, while also giving access to digital media resources to the masses.
Meanwhile, Nigeria saw a huge 25.5 percent rise in entertainment and media revenue in 2017 to $3.8 billion (about R55.7bn), although $605 million of this $764m rise was attributable to internet access. Kenya’s entertainment and media industry saw 17 percent year-on-year growth in 2017, again propelled by growth in the internet sector. Ghana’s entertainment and media industry has more than tripled in value since 2013. Total revenue reached $752m in 2017. It is forecast to surpass $1bn in 2019 and to total $1.5bn in 2022.
Companies that start with a well-functioning operating model have an advantage. Companies that start with a well-functioning operating model have an advantage. An operating model characterised by clear processes, decision rights, and goals and metrics confer the ability to make fast decisions and move quickly—both fundamental to operating effectively in digital ecosystems.
And digital operating models enable adaptation of or changes to, business models more rapidly than traditional management structures burdened by layers of review and approval. They also allow companies to automate both routine and not-so-routine operations to achieve new efficiencies, increase productivity, and reduce costs—all priorities for investors in today’s capital markets.
We found that plenty of media company operating models still lack clarity and focus and that, as a result, companies encounter a number of common pain points that lead to slower decision making, friction across functions, and an undermining of the broader digital transformation.
These nine pain points include the following:
- Poorly defined links between strategy and operations
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Ambiguous roles and decision rights
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Missing or loosely defined cross-functional processes that streamline operations and foster co-operation
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Challenges of media buying and selling
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Provincial creation of media and entertainment content
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Reducing rentals of production equipment
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Inconsistent goals and metrics – both individual and organisation-wide – and indistinct links between goals and metrics and performance
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A culture that remains rooted in the old way of doing things
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Misalignment of the organisation structure and new digital roles
Many of these problems stem directly from lack of clarity about strategy and vision, family-run media and Individually operated media and entertainment companies coupled with uncertainty about how to structure the organisation to deliver products.
As a result, media companies that are transforming still face two big operating challenges: one, making decisions, developing new strategies, and implementing plans at digital speeds, and two, bridging (or eliminating) organisational silos that inhibit effective use of data and development of digital products and services.
Until these companies resolve the uncertainties, the battle over who’s in charge will undermine decision making and impede their progress.
Our research shows that companies that have successfully executed organisational transformation have implemented one of the following four operating models: Content led; Product led; Revenue led; Hybrid led. Resolving whether a company is content, product, or revenue led—or a hybrid—is a prerequisite to determining organisational decision rights.
For many media companies—particularly those that lack the inherent clarity of the content- or revenue-led models—making the choices necessary to implement an operational transformation is not easy. Companies that make the tough choices will inevitably experience a period of adjustment and even internal turmoil. But they will be positioning themselves to move forward as speedier, nimbler, and more efficient digital organisations.
Miyelani Mkhabela is a Chief Executive and Capital Markets Strategist at Antswisa Transaction Advisory Services, contract us on : www.antswisa.co.za | [email protected] | Tweet: @Miyelani_hei
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