As the global middle class grows (from 1.8 billion people in 2009 to an estimated 4.9 billion in 2030)¹, demand for new media services focusing on convenience, education, premium content and video-on-demand will grow, particularly in emerging economies. Meanwhile, the emergence of millennials (the generation born between 1981 and 1997) is creating demand for technology services that offer convenience, memorable experiences and instant access to content. At the same time, the world’s population is ageing, leading to increased demand for health and wellness, entertainment and education services designed for older people. Finally, urbanization will contribute to increased demand for media offerings designed with people’s commutes and busy work lives in mind.
2. New consumer behaviors and expectations
These demographic shifts are having a dramatic impact on what consumers expect from media, how they consume it, and on their familiarity and savviness in navigating the digital world.
- Changing consumer expectations and behaviors. Younger generations are keen to consume content from around the globe. Their expectations are built around instant gratification, especially the ability to access content immediately. Moreover, as the boundaries between industries blur, customers judge their experience of a service not just against competitors in its own sector, but against the best services from other industries.
- Editorial content, advertising and propaganda. Consumers are increasingly savvy at spotting marketing or PR spin disguised as editorial content. As growing numbers of Internet users turn to ad-blocking software, marketers are changing tactics and looking to engage consumers through storytelling or providing useful information (brand utility).
- The rise of the amateur content creator. Younger users are flocking to channels run by amateur content creators, such as Swedish star PewDiePie, who has amassed 9 billion views on his YouTube channel². These content creators have developed a new kind of relationship with their audience, building up a dialog with fans and namechecking them in videos.
- Content curation and delightful experiences. Consumers appreciate having someone to curate content for them, similar to what an editor would do with a (paper) magazine. Clean mobile reading experiences and native advertising platforms are reaching new and savvy audiences, enhancing the user experience and allowing publishers to charge a premium to advertisers.
- Security, privacy and trust: Consumers are becoming increasingly aware that their daily lives are being turned into data that can be analyzed and monetized by third parties. Opaque and complicated privacy policies and customization algorithms may prompt consumers to switch to services that offer them more transparency and better data privacy.
3. Ecosystem challenges
As the media industry adapts to the changing habits of its customer base, we have seen a number of significant changes to the landscape of the media sector.
- Startup disruptions. Talent, access to technology and a ‘change the world’ attitude are allowing startups to bloom across the world, creating new businesses and lean models. Once this breed of company reaches scale, it invests both in raising the quality of its content and in offering new services, putting competitive pressure on traditional media companies.
- Everybody is a content creator. A diverse set of brands and organizations now assume the role of broadcasters competing for consumer attention (for instance, Unilever and Intel through their partnership with Vice Media).
- Access to financial resources. Creative people are finding novel ways to fund new products and services. Content creators are bypassing traditional media companies and turning instead to innovative sources of financing such as crowdfunding platforms.
- The transformation of work. Digital transformation is likely to have a significant impact on employment, creating demand for some highly skilled digital roles, while making some job categories redundant. As the workforce adapts to the digital economy, there is likely to be a need for lifelong learning to keep pace with the evolution of technology.
- Regulatory uncertainty. Legal frameworks surrounding intellectual property are not ready for a new generation of media consumers who expect instant access to content from anywhere on the globe. As a consequence, many consumers are choosing to bypass conventional means to access content (for example, using Virtual Private Network (VPN) services to access US Netflix in the United Kingdom).
4. Technology trends
The increase in mobile and Internet penetration has made being connected a way of life for younger generations of consumers. This presents media businesses with opportunities to fuel the continuous conversations that this connectivity allows. Alongside this increase in connectivity, technology now allows access to content anywhere, anytime. Meanwhile, the growing availability of open-source and free software enables startups to build new businesses and innovative products in record time. And finally, through the widespread availability of cheap sensors, connected devices and cloud computing, we are witnessing the birth of the Internet of Things, a network of connected machines delivering smart services, which will offer the media industry a whole range of opportunities to create seamless, personalized services.