February 7, 2010...9:40 pm

The Changing Paradigm for Entertainment

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“As it searches for the right digital business models, the media and entertainment industry is striving to reinvent itself…” says Accenture, in their newly released report on the state of the entertainment industry, This Time It’s Personal.  What a timely follow-up read to the Mobile Mandala blog post earlier this month examining some reasons why mobile is not yet fully integrated into the entertainment industry?” 

It prompted me to take a new look at that question. 

But this time, rather than take a mobile perspective on the entertainment industry, I wanted to take an entertainment industry perspective on mobile and other forms of digital content distribution and content consumption.  At a fifty thousand foot level, I was interested to identify some key drivers that have fundamentally changed from the pre-digital era (say 1995) that may have prompted this need for reinvention. Three immediately came to mind.

The Entertainment Experience

The locus of control over the entertainment experience is rapidly shifting from a ‘producer only’ model, to more of a hybrid ‘producer/consumer’ or in some cases ‘consumer driven’ model.  Certainly the shift has been far less dramatic in feature films and most dramatic in entertainment models that were incubated in the computer, mobile and online environment, such as gaming and now social gaming.  But, the tide is changing even in television driven programming – with consumer text and phone voting, online videos and other real-time consumer input – as well as other forms of reality programming.

Part of the change has also manifest itself in the emerging transition from a completed and locked-in production that is transmit over the broadcast environment to a more organic, dynamic entertainment experience that is modified in real-time with viewer or user input.  Again, internet-based gaming and other user generated or manipulated content applications are the most obvious.  In television, the recent Grammy Awards using real-time voting results to determine which song Bon Jovi would perform is a nascent example.


Entertainment revenues have always been a combination of direct revenues (consumers pay for the entertainment experience) and indirect revenues (advertisers pay for the right to have their message seen or heard by consumers who are enjoying an entertainment experience).  With the migration of the entertainment experience to mobile and the computer based internet, consumers have been far more willing to pay directly for and with the immediate response possible in these mediums.  Social gaming certainly has provided impetus for monetizing this change as have smart phone applications.  The corresponding drop in advertising, particularly local advertising, has only accentuated the shift in the focus on monetization of potential revenue sources.

Another related change is the shift in cash flow from delayed payments to more real-time revenue generation.  Revenue from entertainment has been traditionally received after the content has been created and when it is experienced in its finished form. Ticket sales, DVD/CD sales and advertising on broadcast television/cable and radio are some examples.  With the advent of interactive response on digital media, content has begun to be monetized as an evolving work in progress that can be changed, manipulated and altered through control allocated to consumers.  Producer and user-created content experiences, monetized through freemium, up sell, web-based, user-generated content revenue models are prime examples of this evolving trend.

Platform Exposure

Traditionally, media has been premiered on one platform and then repurposed to other platforms to maximize the revenue windows for the monetization of content.  Digital media distribution was originally viewed as a promotional vehicle to support the sequential window-specific monetization strategy.  The ability to create significant monetization (and the potential for cannibalization) from the new digital distribution strategies has caused a re-evaluation in the existing model for platform exposure. 

The potential for simultaneous platform exposure has begun to take hold as content creators have begun to segment branded content for each platform and leveraged the unique content consumption patterns for each platform.  Mobile applications, for example, provide a completely different branded content experience (with incremental revenue potential) from traditionally distributed content platforms.

So, it is not surprising that “Sixty-five percent of executives believe the main source of future revenue growth will be new platforms/ways of delivering content,” according to the Accenture study. 

Yet, the study states “the principal hurdles they face in their efforts to transform their businesses are organizational issues, ahead of financial and market issues.”  Why? Because “businesses and their workforces have grown accustomed to particular business models, processes and ways of working, and are reluctant to take risks to change these into something new and less familiar.”

How appropriate then, that a long ago forgotten content source from the 1950s, could provide inspiration to the entertainment industry as it ‘strives to reinvent itself’.  Pogo, the central character in the 27 year running comic strip of the same name, once famously stated…

“We have met the enemy and he is us.”

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