The consumer appetite for digital content continues to grow – and change – at a staggering pace. Media consumption has not just gone digital; it's connected. As consumers continue to enhance and replace traditional media consumption with digital experiences, incumbent media companies face a potential revenue challenge. Digital services growth has not offset the value lost in traditional media, and many companies struggle to replace rapidly declining traditional revenue with equivalent unit value from digital media.
Three factors underscore this reality: 1) Value shifts have occurred as device manufacturers and distributors/aggregators continue to innovate and deliver superior experiences for the consumer. 2) Substitution of traditional media is now glaringly real, as mainstream adoption of digital devices and content across all age groups continues to drive fragmentation and decline in traditional media consumption. 3) Current digital revenue models tend to be weaker than traditional revenue models, due to either lower unit value, lower inventory or the move toward a la carte offerings.
Today's media companies must determine how to overcome these challenges and capitalize on the opportunities before them. Our research indicates they can indeed tackle these issues and chart a course toward growth by enhancing the consumer experience, embracing new distribution platforms and expanding revenue models.