Strategic consulting for the media and entertainment industry
With the transition from analog to digital content, the media and entertainment industry has been in a phase of digital disruption for years. The consumer’s expectation to demand content cross-medially, anytime and anywhere, presents new challenges for the media and entertainment industry.
The upheavals in the media and entertainment world are dramatic; the transition from analog and print-based business to digital is unstoppable. “Digital first” becomes “digital only”. And those who are not fast enough are left behind. Successfully mastering this change could hardly be more challenging. Revenues from traditional business models are declining, digital media are experiencing a strong upward trend, and at the same time, competitive pressure is increasing due to providers of on-demand and streaming services.
However, the probably most difficult task is the restructuring of IT landscapes within organizations. Few industries are as permeated by IT systems as the media – and accordingly numerous are the construction sites.
Our expertise in media and entertainment helps companies assert themselves in the digital future of the globally connected media business and explore new paths. We scrutinize existing business models, support in designing and managing the digitization process, and develop customized solutions based on our know-how – so that our clients can effectively seize the opportunities of digitalization.
Circulation of daily newspapers in Germany continues to decline
The number of people who reach for a daily newspaper each morning or pick up a printed magazine is consistently and seemingly unstoppably declining. The average age of the readership is increasing, and the “Twitter Generation”, the younger target audience, is hardly reachable on paper anymore. Thus, the print business model is finite; the question is not if, but simply “when is it finally over”?
Development of the sold circulation of daily newspapers in Germany, 2024 →
Parallels to the music industry
Print media are following a development that has already taken place almost completely and at a much faster pace in the music industry. Here too, the physical distribution of content is only relevant for people who grew up with vinyl records and CDs. Young people today who listen to music don’t pull a disc from a sleeve but use streaming services.
Declining relevance as an advertising medium
Alternative revenue sources
Can the business of text and photos, similar to music, be switched to online media within a reasonable time? According to the New York Times, the answer is a clear “yes”. Unlike many others, the New York Times has early and consistently focused on paid models for journalistic content and has thus been able to offset the declining advertising revenues to some extent with paid journalistic content beyond the printed newspaper. Even though this model is only partially transferable to others, it shows that strong media brands remain relevant and economically viable regardless of the medium.
New technologies are challenging and at the same time create new opportunities
Amount of available data increases
Data is generated everywhere. Not only the increasing amount but especially the better availability of this data significantly influences the media industry. The integration of advanced technologies such as analytics, Customer Data Platforms (CDP), or increasingly artificial intelligence (AI) is revolutionizing the way media companies create, distribute, and monetize content.
By using appropriate tools, deep insights into the preferences and trends of target audiences can be gained. In content production, this adds a data-driven perspective to journalistic expertise on the reception of these contents. The analysis of large data sets enables the recognition of patterns that can improve editorial work and help make journalistic content more relevant.
The use of Customer Data Platforms (CDP) facilitates the central management of customer data, enabling media companies to provide personalized interactions across various channels. This enhances customer loyalty and opens up new monetization opportunities.
Despite these advances, data protection remains a central concern. Compliance with data protection regulations, especially the General Data Protection Regulation (GDPR), is essential for media companies. Careful handling of personal data and transparency in dealing with user information are crucial to maintaining the trust of the target audience.
Content and publication processes are becoming more diverse and complex
The constantly increasing complexity of content and publication processes has profound effects on the media industry. Media companies face the challenge of creating and maintaining content in a media-neutral way to enable seamless distribution across various channels. This requires a flexible content production that must be independent of specific formats and platforms.
Digital Asset Management (DAM) systems enable efficient management and organization of digital assets such as images, videos, and texts to ensure the required efficiency in content production. At the same time, precise metadata management is becoming increasingly important to effectively categorize content and optimize it for search algorithms.
Channel orchestration is another key aspect. Media companies must ensure that content is consistently distributed across different platforms and social media. Editorial planning and organization must adapt to the dynamics of these channels to adequately reflect current trends and events.
Regarding payment models, we are experiencing diversification. In addition to traditional subscriptions, for example, pay-per-use models or freemium approaches are emerging. This requires a precise analysis of user behavior to derive sustainable monetization strategies from it.
More diverse options lead to rising expectations, which significantly influence the usage behavior of the target audience. Media consumers expect content to be available everywhere and at any time, and to be relevant to them, creating a seamless user experience. To ensure such consistent and engaging interaction across all touchpoints, tools are needed that allow for precise control of the customer journey.
Traditional organizations are dissolving and are being replaced by new structures that are more aligned with customer needs
AI applications offer new opportunities but also pose risks
The emerging triumph of artificial intelligence has significant implications for the media and entertainment industry, perhaps more so than for any other industry. The advancing integration of corresponding applications has profound impacts on the media and entertainment industry and fundamentally changes the way content is created, distributed, and consumed.
In the area of content production, AI supports through automated processes, whether it be in research, evaluation of sources, creation of texts, proofreading, or the selection and generation of images and videos. This automation of workflows through AI mainly affects the editorial process: journalists can be relieved of routine tasks, leaving more time for creative and qualitative work.
AI-based algorithms are capable of analyzing large data sets, deriving patterns, and identifying trends. This allows for the categorization of both content and users, for example, through scores and flags, so that the design and delivery of content can be precisely tailored to the needs and expectations of specific target groups. This extends to customized content and recommendations for individual persons. The keyword here is relevance and the promise to provide the customer with an optimally reliable user experience to keep them permanently attached to the product.
In general, AI technologies enable predictions to be made, thus supporting both operational and strategic decisions based on data-driven insights.
However, the increased use of AI also raises ethical and societal questions. Aside from the verifiable compliance with all data protection regulations, special sensitivity is required particularly in relation to the spread of misinformation and the distortion of contexts. Media and entertainment companies have a particular responsibility in dealing with these issues.
(IT) landscapes are becoming more diverse
In addition to the publication channels and formats, the number of systems and applications is also increasing, complicating the coordination of processes and affecting their efficiency and effectiveness.
Additionally, the lifecycles of technologies and applications are shortening. This puts pressure on media companies to quickly adapt to new generations of systems. Such adaptations require continuous investment in the training of employees and the permanent updating of technical infrastructures to manage recurring compatibility issues and the risk of security vulnerabilities.
Moreover, the extreme specialization of systems and their users necessitates highly qualified personnel at all levels of the company and can lead to a dependency on specific expertise. In the context of skilled labor shortages and the need for maximum flexibility, this is a real challenge.
Service and contract management are also gaining importance to efficiently manage the multitude of applications. For optimal use of finite resources, reliable monitoring of service levels, maintenance contracts, and license terms is essential.
Core technologies and operational models are changing rapidly
Software as a Service (SaaS) has initiated a paradigm shift in software usage, enabling media and entertainment companies to use applications cost-effectively and flexibly, accessing the latest functions immediately.
Interoperability is crucial for ensuring seamless cooperation between different technologies. Systematic interface management, service-oriented architectures, and the use of middleware lay the foundation for the integration of various systems and promote smooth data exchange and efficient information flow.
The possibilities for designing technology stacks are becoming more flexible, which increasingly focuses on the systematic dismantling of outdated systems. The individual workplace is also affected by this. New technologies promote flexible work models, mobility, and new forms of communication, and transitioning to a modern workplace (new work) is especially essential for people working in journalistic and creative fields.
In this dynamic environment, professional project management and agility, as well as change management, are of crucial importance. Media companies must be able to respond quickly to market changes and manage projects efficiently to provide innovative content and services in a timely manner.
To master all these challenges, media and entertainment companies must focus on the increasing and hardly manageable number of industry-specific systems and applications. Additionally, it is crucial to keep an eye on general technological developments and changing operational models, assessing their relevance for the industry. All this requires technology management that follows a strategic approach.
Selection, configuration, integration, and management of applications must aim to:
Only by doing so can media companies continue to be successful in the long term in a rapidly evolving digital landscape.
Proceed together in a systematic and planned manner
To adequately address all these challenges, media companies need to proceed systematically and with careful planning. Such an approach can be summarized with the following key points.
The use of systems is not an end in itself but follows objectives set by the business. From these, specifications for products, services, and processes are usually derived. Moreover, these also form the strategic guidelines for questions of technology management within the company, allowing technological goals to be directly derived.
This ensures that technology truly follows strategy. It means that the development, implementation, and use of systems and applications are closely aligned with the overarching strategic goals and plans of a company. Such an approach consistently considers technology as a tool and enabler for achieving the overarching objectives.
There’s no avoiding the necessity of knowing the state of your own house as precisely as possible. Only then can limited resources and valuable time be used most effectively to build a future-proof IT landscape and organization.
Typically, the system landscapes in media companies are extremely complex. A difficult-to-oversee multitude of individual applications, components, and data stores lead to process and media disruptions, functional redundancies, and data silos.
Typical problems include:
To gain a systematic overview, it is advisable to obtain an appropriately detailed overview of all systems and components currently in use.
Mapping existing process steps and deriving the desired state allows for a precise functional configuration of all essential systems, which significantly simplifies the search for future solutions and minimizes system redundancies.
Questions regarding IT operational strategy should also be addressed in this context. It is important to decide early whether the new solution should be “old school”, hosted on the company’s own servers “on-premise”, or whether it should be operated partly or entirely through external “as-a-service” offerings.
The results of all considerations can be summarized in an overarching target vision or a development plan and easily and effectively coordinated with all relevant stakeholders.
Key areas could include customer management, content management, order and product management or publishing management. For these levels, consideration should be given to role-based smart expert applications, smart data, middleware, system software and physical processes and products.
How can one reach a destination without knowing the way? Likely not at all, or only via costly and time-consuming detours. Therefore, a plan is necessary that outlines the steps and the timeline for turning the vision into reality—the so-called roadmap. From this, all activities required for the implementation of the project can be discerned.
Initially, prioritization criteria and metrics need to be developed to sequence individual initiatives logically. These initiatives can typically be divided into projects and subprojects. Building on this, a valuation model is created to prioritize these individual activities and organize them into rough phases. The definition of the projects and subprojects includes setting objectives, milestones, scope, resources, possible start dates, duration, and dependencies on other projects. All these projects are then summarized in an overall project plan. Finally, it makes sense to coordinate with IT planning at the corporate level. This ensures that the IT development roadmap aligns with the overarching corporate goals.
Journalistic work and the dissemination of content, i.e., the actual value creation of media companies, takes place not in the technical functions of IT systems but in processes. This means that people work together purposefully, using applications to achieve a specific result. IT decisions should therefore always be measured by their potential to contribute to the optimization of these processes.
In addition to orienting around customer- and market-driven strategic aspects, all IT decisions should also align with the following objectives:
The restructuring and redesign of the IT landscape cannot happen incidentally; it requires professional project management. The choice of project management methods—whether traditional waterfall, agile, or hybrid—is secondary and depends on the specific goals of the project and the skills of the people involved.
Agile project management differs from traditional project management in its more flexible and iterative approach, emphasizing adaptability and responsiveness in dynamic environments. This approach is particularly suitable for media companies when developing new digital products. In contrast, traditional project management relies on a fixed plan, clear phases, and defined milestones, where changes during implementation are limited and come with additional costs.
In addition to the actual project managers, the engagement of experts for a professional Project Management Office (PMO) and the appointment of specific roles such as Test Manager, Quality Manager, Scrum Master, or Product Owner is often useful and advisable.
Harmonious Triad
At valantic, we view digitization, IT strategy, and organization as a harmonious triad and implement it together with our clients. The digital mapping of production and value chains, end-to-end, is essential for companies. In this context, valantic emerges as a reliable partner with comprehensive expertise in process digitization and automation. We understand business processes and translate them into effective digital or IT strategies.
Digital becomes normal
Our approach to digital transformation aims for the comprehensive digitization of the value chain in line with Industry 4.0 principles. Digital processes, products, and services are key to resource efficiency and sustainable improvements in performance and quality. Significant cost reductions and productivity increases through the elimination of media disruptions, redundancy removal, or reduction of throughput times are the results of a contemporary workflow organization using the right systems.
Individual Roadmap
valantic is ready to accompany you on your journey through this transformation and find a tailor-made solution. We will scrutinize all relevant processes, workflows, and technologies, and together with you, explore the limits and possibilities of available technologies to derive practical optimization suggestions and recommendations for action. Our extensive industry experience ensures a profound understanding of the specific challenges media companies face in these dynamic times.
Systematically towards the best system solution
We are well aware of trends and changes in the system provider markets and possess extensive expertise on providers of all types. When selecting a system, we conduct a detailed comparison of various solutions—provider-neutral and system-agnostic—focusing on your company and strictly oriented towards your requirements.
Responsibly achieving success with valantic
With valantic, you have a partner by your side that not only accompanies companies in the development and implementation of IT strategies but also takes responsibility for all work results. True to our motto “Big enough to deliver – small enough to care”, we competently support you in the consistent implementation of your goals until the desired success is ensured.
Peter Schwalbach
Managing Consultant
valantic Management Consulting GmbH