With innovation increasingly being considered indispensable, Marcel Fenez, Global Entertainment and Media leader for PwC, feels the journey is a long one as globally markets are at different stages of evolution.
Everyone is talking about innovation. What’s your take on this?
We have to innovate. There is no question about that. We have to look for new products and services. We have to look at new ways of connecting with the customer. Innovation is happening. However, innovation journey is going to be a long one. In many markets we are witnessing early stages of innovation and in others innovation requires the right number of technologies to be available for the digital journey. I think innovation is absolutely critical. Everyone is talking about it. All major companies, whether they are in the US, Europe or Asia, are looking at ways to innovate.
Are legacy thinking still prevalent in today’s media business?
There is nothing wrong in legacy thinking. The real question is how we change and adapt. We need to leverage the legacy. We should not allow the legacy to straddle you down.
What is the biggest concern of Media and Entertainment CEOs today? What is top of their mind?
Number one is the growth agenda. We have already talked about new products, services and innovation. Everyone is looking at consumer behaviour with changes in media consumption. The mobility of the consumer is absolutely critical. As a consequence you have to reach out to the consumer and create new products and services. That’s top on CEOs radar.
CEO groups are looking at scaling up. Scaling up can be achieved by new products or through acquisition or entry into new markets or through collaboration with other companies. A lot of CEOs are looking at inventing new products and services.
CEOs also are also realising the need to look at the way they are operating their existing businesses to make sure that the infrastructure they have and their organisations are actually aligned to the business of today and tomorrow rather than being aligned to business of yesterday. Negatively, that means cost reduction. But cost reductions are being made so that organisations can invest in new businesses. Looking at cost base is absolutely synonymous with how you invest in growth.
Media and technology companies are getting closer and marriage seems to be inevitable? There is no media without technology and no technology without media?
I actually believe that. I think technology and media is all about reaching the customer. Technology is nothing without content. And, content needs technology to reach the customer. I think that marriage you talked about is happening and it will happen more and more. We will see many more technology people in media companies. And also, we will see technology companies bringing more and more talent from media and advertising companies.
Recently, WPP’s Martin Sorrell said they are not an advertising company. Is the way how we define companies is changing?
Today, it is increasingly becoming more challenging to define simply what a company is. I think the most important thing is to identify the core skill or the core competency of an organisation. That will define what you are. But within that definition, you also have certain other important elements. Every organisation should be looking at all kinds of revenue streams and ways to get those revenue streams flowing. It may mean brining certain people together in-house or collaborating with others.
What is your take on cable TV digitization in the India market?
I think digitization will go relatively well. People are very positive about that. The underlining thing is how the economy will do over the next eighteen months.
India has a strong tilt towards traditional media but we are also experimenting with new media? Will India continue to do that?
Yes, it will. But India is not the only market with strong tilt towards traditional media. Take Indonesia for instance. It has still got a good print and TV sector. Online is relatively slow to develop. What I think important about India is that sometimes one doesn’t need to be first mover; sometimes it is better to be a good follower.
Everyone is talking about Big Data? How important is Big Data to M&E companies?
There is a lot of talk about big data. It is much more fundamental. Every organisation wants to connect with the consumer. Data analysing is basically understanding the consumer behaviour. It is very important for media companies. It is not easy to acquire and then subsequently mine the data. Data analysis is a very specific skill. It is a skill that media companies never had been exposed to. As media companies are moving increasingly from B2B to B2C space data analysis will become more important.
Do you see changes in the multi-screen media world today?
What we are seeing today is the change in traditional model. New things are coming along to compliment what we have seen before. If I have to give an example, there is a talk about second screen behaviour. But ultimately a lot of that is complimentary to the first screen behaviour. What we are seeing is that the behaviour is not substitution but complementary. People talk about Over the Top Television (OTT). The question in the short run is that is it substitution or complimentary?. There is a lot of evidence at the moment to show that it is complimentary. I think in the long run there may be substitution.
What is your outlook for media and entertainment sector?
There are short-term challenges in advertising in many markets. But these will be relatively short term. In terms of innovation, new products and services I am very upbeat. As I go around the world, I see many cool things happening. In terms of how we as an industry are changing, I am very upbeat.