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Media and entertainment professionals surveyed by Salesforce cited rising competition as their top challenge.
This outweighs factors such as third-party cookie depreciation, lower subscriber value, and higher costs due to inflationary pressures.
To gain insight into this changing landscape, Salesforce surveyed 350 media and entertainment decision makers in seven countries for its new Media and Entertainment Industry Insights report.
Customer Experience
Customer experience is critical to any business strategy, with 86% of consumers now saying experience is just as important to product quality. And, with offerings spanning streaming services, broadcasters, gaming platforms, esports, and more, customer experience is a key differentiator in the media and entertainment industry.
Therefore, improving customer satisfaction (CSAT) is a top priority for the industry. Case in point: A recent Salesforce consumer survey found that while 65% of consumers subscribe to at least one video service, 39% of them don’t think it’s worth the cost. Satisfaction with the value of audio, digital publications and game subscriptions was even lower.
As a result, media and entertainment companies report high annual churn rates — an average of 17 percent — and streaming service providers and cable/satellite operators report even higher numbers.
Web3, Creator Economy
In addition to delivering differentiated experiences that delight customers, media and entertainment companies must support a strong bottom line. Advertising continues to be a major source of revenue for media and entertainment companies, both in terms of the company’s share of advertising revenue and in terms of average revenue per user (ARPU). However, the outlook for ad spending is far from rosy, with only 15% of respondents expecting an increase in the next 18 months.
To weather the decline in advertising spending and take advantage of new technology and consumer behavior, media and entertainment companies are actively pursuing diversified business strategies.
Influencer marketing is an example of this trend, with 65% of media and entertainment professionals reporting that their companies work with influencers to promote products and services, drive users to the platform, and more.
Web3 is also being seriously considered by a range of media and entertainment companies for its ability to drive revenue and deliver differentiated experiences. Web3 use cases related to loyalty programs, real-world asset management, and content monetization are seen as the most promising for the industry.
efficiency measures
While the overall macroeconomic outlook remains mixed, the media sector has started to slump, prompting cautious spending. This is reflected in the budget outlook – 64% of survey respondents expect a net increase in overall operating budgets over the next 18 months, but resources such as marketing budgets and headcount are unlikely to see increases.
Faced with doing more with less while they seek to win over discerning audiences in a fierce competition, media and entertainment companies have largely focused on efficiency initiatives.
Workflow and process automation are an important part of the equation, but there is still much work to be done. For example, no more than 37 percent of survey respondents indicated that specific processes at their company were fully automated, and tasks such as churn prediction and content production in particular were likely to be entirely or largely manual.
“A saturated media market offers endless new choices for consumers, coupled with challenging economic conditions, media and entertainment companies need to differentiate while finding ways to reduce costs,” said Senior Vice President, Communications, Media and Entertainment President and General Manager Christopher Dean said at Salesforce. “Technology, such as automation, real-time data, and generative artificial intelligence, which enable greater efficiency and a better customer experience, are critical to staying agile and differentiating in a crowded marketplace.” – trade arab news agency
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