INDUSTRY PROFILE: MEDIA & DISTRIBUTION
Leading media companies include Disney, Comcast, and Facebook. The holding company for Google, Alphabet, is at the top with annual media revenue of $59.62 billion USD. Overall advertising spending is projected to grow from $183 billion in 2015 to $207 billion USD in 2021. TimeWarner and AT&T recently merged, with the goal of competing on content with distribution infrastructure. In 2015, cable and pay television providers had revenue of just under $50 billion USD from advertising and program revenue alone and just over $25 billion USD in airtime revenue. Mediacom Cable, DirecTV, DISH Network, Comcast, and Frontier are the largest cable or satellite players. For many years, content distributors have eroded the revenue and influence of traditional broadcasters, such as ABC, NBC, and CBS. Yet, cable is now being challenged by subscription services, such as Netflix and Amazon Video.
CUSTOMERS AND SEGMENTS
45 percent of American households with televisions are wired to cable connections. 80 percent of people over 30 still rely on broadcast television or cable, while 44 percent of content is consumed on televisions by Millennials aged 14 to 24. A recent survey of people aged 16 to 24 found that 72 percent of them most associated the watching of television with the Netflix brand. The streaming service now has almost two million more subscribers in the U.S. than the largest cable companies. A survey by Deloitte revealed 37 percent of American consumers today own alternate devices such as tablets, laptops, and smartphones. That is an increase of 270 percent since 2010, with the sharpest increase among women. And 56 percent of the content viewing is on smartphones, computers, tablets, or on gaming devices. Millennials in the 24-30 age range consume 47 percent of their film and TV content on alternative devices.
PROMISES AND BUSINESS MODELS
It is important to keep customers happy so they will not want to switch. Vision Critical found that 42 percent of Americans will stop using a brand after just two bad experiences. Some providers make the costs of switching away from cable very high. Houston Chronicle reported that Comcast customers who keep internet but eliminate cable TV service are punished. “Cord cutters are not invited to the [speed increase] party. Only those who bundle Internet with cable TV and other services will see their speeds go up at no extra charge.” Comcast also has aggressive retention specialists. If a customer is calling to cancel cable because they only watch Netflix, the rep is directed to push an internet speed upgrade. Comcast has predefined responses for every reason customers might want to cancel. Ryan Block became famous because a cable company refused to let him cancel service. More customers are leaving anyway.
Enterprises in a variety of industries are under pressure from investors and competition to innovate their Business Model(s). In some cases, Models incorporate upselling or deceptive practices to expand revenue streams. When a Model is incongruent with the Brand Promise, customers often turn to other brands they think they can rely upon. It is also possible that the Promise is not keeping up with the Model. A Promise can evolve over time, with patience and the proper investment. Enterprise Value Integration (EVI) specializes in identifying specific and incremental steps that can be taken to close gaps between Business Architecture and Brand Architecture. These gaps can occur at different levels and are often not obvious or visible to the workforce unless they interact directly with customers. And team members who interface with buyers are often not in a position to do anything. EVI creates a significant amount of value for both customers and shareholders because it improves loyalty and brand reputation, which translates into more profitable and sustainable revenue. EVI initiatives also enable operations to be more efficient and create greater clarity for employees, contractors, and partners. DO MORE WITH YOUR ARCHITECTURE >
CONTACT ENTERPRISE VALUE INTEGRATION TO LEARN WHAT WE CAN DO FOR YOUR BRAND:
INDUSTRY EXPERIENCE
Enterprise Value Integration (EVI) has extensive experience serving corporate clients in verticals such as telecommunications, internet service provider(s), media, and advertising. This experience has taught our team that Brand Promises are only as good as the company’s ability to execute consistently. Customer Experience must align with the Promise. Both will align only if the Business Model and Business Processes support the Promise. Our approach is to scale integration with Cloud Computing, through redesigned Processes and Web Services. We have partnerships with leading Cloud vendors to accelerate this process.