Getting personal – Technology in Entertainment and Media

Advertising in the entertainment and media industry has surely suffered, but many of these brands have found ways to deliver experiences and content directly to consumers such as through social media. Innovative E&M companies are identifying and adopting new ways to seek out growth and adapt to consumers’ preferences. A drive towards subscriptions, for example, reflects a wider attribute of the accelerated digital future: the power of direct-to-consumer connnections. Some E&M companies in this region are exploring different ways to bring live or on-demand experiences direct to consumers through their phones or smart TVs with the attendant growth in data consumption. According to PwC’s Global Entertainment & Media Outlook publication, fixed broadband is projected to reach its 1 billionth household in 2020 while unique mobile internet subscribers will have grown to 3.4 billion by the end of 2020. By Meshack Ndirangu

The Entertainment and Media (E&M) industry in Kenya has transformed with time since independence in 1963. The pace of change has increased significantly in the recent past. It is now about five years since the digital migration took place. The government’s objective in embracing the digital migration agenda was to deliver improved quality of audio and visual content to the Kenyan population while at the same time efficiently utilising the frequency spectrum.

Since the digital migration, the number of TV stations has increased more than six-fold from nine in 2015 to 68 in 2018, while radio stations have increased by 44% from 120 in 2015 to 173 in 2019 based on data in the broadcasting report prepared by Communications Authority of Kenya. The number of online news sites has also increased significantly. Though the audience has expanded, E&M companies that have invested in transmission infrastructure and set-top-boxes continue to face several challenges including high levels of churn as a large percentage of subscribers fail to renew subscriptions. This is likely to be compounded as the Kenyan population follows the global trend of code-cutting where viewers using cable TV are on the decline while streaming services are gaining traction as internet services become more available, reliable and affordable.

E&M companies are employing data analytics and Artificial Intelligence (AI) to address churn. By analyzing data collected over time to understand subscriber behavior, E&M companies can categorise and predict customers at risk who can then be targeted with specific tailored campaigns. Data analytics is also being used to improve customer experience by analyzing and responding to consumer likes, preferences and peculiar behaviours.

Traditionally, E&M companies invested in generating quality content which was broadcast at designated times. Consumers had very limited options as to when and how to consume the media. Today, the consumer has more options and flexibility for how to consume media. Consumers are increasingly looking for convenience and media that resonates with their daily lifestyle and preferences. This has put more power in the hands of the consumers as to the choice on the form and timing of media consumption.

This indicates that there is a growing preference for consumers to move away from cable TV where a bouquet of channels is made available for a fixed fee, to services where the consumer has more freedom of choice as to what videos/ programmes to view, at what time and through which devices. In response, media companies are increasingly designing their offerings to address specific consumer preferences using algorithms and AI to predict usage patterns.

Traditionally, the newspaper was viewed as the main source of news. Circulation numbers in Kenya have declined since 2013 with a cumulative decline of 33% having been recorded for the period between 2013 and 2018 (KNBS Economic Survey 2018 - Media landscape report). Although media companies have undertaken significant initiatives to increase circulation in the short to medium term, these initiatives may not have the desired impact in the long term as generation Y or Millennials join the worker and consumer class. Millenials are already more inclined to consume media through digital platforms and hence unlikely to purchase or read physical newspapers.

Although total advertising spend in Kenya continues to increase, the share of newspaper advertising is on the decline. According to the Marketing Society of Kenya, End of Year Survey, social media is the most successful channel to reach consumers at 47% while Above the Line (ABL) advertising is at 33%. E&M companies are looking for ways to utilise their online presence and traffic to make news delivery more interactive and customisable, even as they explore ways of monetising that experience.

As media consumption becomes more personal and consumer-driven, there will be a greater need for advertising to be personalised which calls for a deeper understanding of individual preferences. Artificial Intelligence (AI) technology is already in use by some E&M companies. For instance, consumers already receive recommendations based on their video streaming behaviour; advertising is pushed to consumers on various platforms based on the websites they have visited and their internet search history. This is likely playing a more critical role as the technology is refined and advanced further. The raw material for AI is personal data. The value of personal data is rising hand-in-hand with the capacity of AI to interpret that data.

For media houses to be successful in this environment, they need to look for innovative ways of gaining insights on consumer behaviour and their likes and preferences, and tailor content to suit individual consumer needs. Data protection is increasingly becoming an important boardroom agenda as consumers, political leaders and regulators are starting to grasp the risk associated with handling personal data. There is a risk that the data may fall in the wrong hands or be used in an improper or unethical manner.

The agenda has been heightened by widespread fears over use of personal data for political purposes. Consumers are likely to lose trust if they realise that their personal data is being used without their consent which, in turn, impacts their willingness to share and their choice of platforms.

Data plays a critical role in helping E&M companies to deliver personalized experiences and targeted advertising which are the ingredients for creating and sustaining customer loyalty. Keeping data secure is therefore critical for E&M companies if they are to maintain consumer trust. The PwC’s Global Consumer insight Survey 2019 suggests that the way forward is to treat consumers’ data with respect and deliver value in exchange for it.

The most successful E&M companies of the future will be those that can deliver tailored and responsive content to the right audiences conveniently and through preferred devices, using AI, data analytics and other technologies to optimally monetise these services while building and maintaining trust. This is a tall order for any industry.

Meshack Ndirangu

Senior Manager, Assurance at PwC Kenya

E: T: +254 20 285 5541

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