The media and entertainment industry is constantly changing. The rise of streaming, social media, and subscription models over the past decade have turned the industry on its head and fundamentally reshaped customer expectations.
But as the macro economy enters uncharted waters and consumers reevaluate what’s valuable, the industry is under a new level of pressure.
To offer insight into this changing landscape, Salesforce conducted a global survey for its new Media and Entertainment Industry Insights Report. Some of the key findings are highlighted below.
The industry is focused on customer experience amid a saturated landscape
Customer experience is paramount to any business strategy, with 86% of consumers now saying experience is equally important to product quality. And, with offerings spanning streaming services, broadcasters, gaming platforms, esports, and more — customer experience is a critical differentiator for the media and entertainment industry.
In fact, media and entertainment industry professionals surveyed by Salesforce cite increasing competition as their top challenge — outranking factors such as third-party cookie depreciation, decreasing subscriber values, and the increasing costs from inflationary pressures. As such, improving customer satisfaction (CSAT) is the industry’s top priority.
Case in point: A recent Salesforce consumer survey found that while 65% of consumers subscribe to at least one video service, 39% of them felt they weren’t worth the cost. Satisfaction with value was even lower for audio, digital publication, and gaming subscriptions.
As a result, media and entertainment companies report significant annual customer churn rates – 17% on average – with higher figures reported among streaming service providers and cable/satellite TV operators.
Web3, the creator economy, and other trends are diversifying revenue streams
In addition to providing differentiated experiences that keep customers happy, media and entertainment companies must support a strong bottom line. Advertising remains the leading source of revenue for media and entertainment companies, both in terms of the share of companies that collect advertising revenue, as well as the average revenue per user (ARPU). Yet the outlook on advertising spend is far from positive, with a mere 15% of respondents expecting an increase over the coming 18 months.
Seeking to buck a downturn in advertising spending and capitalise on new technologies and consumer behaviors, media and entertainment companies are actively seeking to diversify their business strategies.
Influencer marketing is an example of this trend, with 65% of media and entertainment professionals reporting that their companies partner with influencers to promote products and services, attract users to platforms, and more.
Web3 is also getting serious consideration from an array of media and entertainment companies for its ability to drive revenue and offer differentiated experiences. Web3 use cases related to loyalty programs, real-world asset management, and content monetisation are seen as having the most promise for the industry.
Efficiency initiatives underpin automation investments
While the overall macroeconomic outlook remains decidedly mixed, the media industry is already experiencing a downturn that’s driving caution in spending. This is reflected in budget outlooks — 64% of survey respondents expect a net increase in overall operating budgets over the coming 18 months, however resources like marketing budgets and head-counts are less likely to see a boost.
Facing the need to do more with less at the same time they seek to win discerning audiences against fierce competition, media and entertainment companies are focusing in large part on efficiency initiatives.
Workflow and process automation is a large part of this equation, yet much work remains to be done. For example, no more than 37% of survey respondents say a given process at their company is completely automated, with tasks like churn prediction and content production particularly likely to be completely or mostly manual.
“A saturated media market giving consumers endless new options to choose from, combined with challenging economic conditions, requires media and entertainment companies to differentiate themselves while also finding ways to reduce costs,” said Christopher Dean, SVP and GM of communications, media & entertainment at Salesforce. “Technology, like automation, real-time data, and generative AI, that can drive efficiencies and better customer experiences, will be critical when it comes to remaining nimble and standing out in a crowded marketplace.”
Access the full Media and Entertainment Industry Insights Report here.
