Media, Entertainment, and Communications Industry Outlook: Beacon 2020

This blog draws on the results of a North Highland-sponsored survey conducted in September 2019. To analyze organizational attitudes and determine the most critical priorities for 2020, we surveyed more than 700 business leaders from organizations across industries that had 2018 revenues > $1 billion and that are headquartered in the U.S. or U.K.

We sat down with one of North Highland’s Media, Entertainment, and Communications (MEC) industry leaders to understand these trends and unpack the implications for the MEC industry in the year ahead.

Q: Looking to 2020, how would you characterize the outlook for the MEC industry?

A: The industry dynamics are quite interesting given that they are changing rapidly and deviating from traditional paths, driven by the imperative for innovation. The key challenges we see are customer experience (CX), operational efficiency, and data & analytics (D&A), all of which can help to drive other top MEC priorities like revenue generation and product or service innovation.

Q: This is the third year that CX has been a top-three strategic priority in our annual Beacon research. How do you anticipate that business leaders will approach CX differently this year?

A: We’re seeing fewer companies blindly making investments in CX. Instead, they are looking to invest in activities that will move the needle, from both a financial perspective— gauged by measures like revenue generation, profit, and operational efficiency—and a customer perspective. To address success from a customer perspective, organizations are prioritizing activities that will have measurable impact on key metrics like Net Promoter Score (NPS).

In our research, CX is the top factor driving change across industries, and as companies evolve and adapt along with customer-driven change, chasing CX investments that lack a solid business case is no longer sustainable. Savvy leaders in MEC want to know that a focus on CX will either increase the number of products and services that customers are purchasing, or drive NPS to measurably increase brand perception in the market.

Q: Unsurprisingly, D&A is one of the top priorities for both MEC and across industries this year. Why is the MEC industry uniquely positioned to harness the value of D&A and how can it help leaders address their other strategic priorities?

A: MEC companies see a tremendous amount of data coming through their systems, whether it's through broadband, wireless, or video. There are countless transactions that happen daily, and those transactions can tell stories to help inform the design of smarter products and services. However, we’re seeing companies getting stuck when it comes to applying analytics to understand what those stories mean to their customers, their products and services, and how insights can help them relate to other companies as well.

Q: Why is operational efficiency as a strategic priority particularly important to the MEC industry?

A: Operational efficiency is a critical focus, especially with wireless companies, because they have to spend significant sums of money on the network. When you look at 5G buildout and 5G commercialization, MEC-based companies see this as a huge transformation to the industry, both from a network standpoint as well as a consumer-facing standpoint. As companies double down on these sorts of innovations, it’s important that they deliver these new programs efficiently and cost-effectively. Additionally, MEC has been the focus of several high-profile acquisitions.  As these acquisitions take hold, companies are using operational efficiencies to accelerate payment for these acquisitions by removing duplication and streamlining back-end processes as quickly as possible.

Q: Where are some areas in which innovation is playing out in the 2020 MEC agenda?

A: Given the recent uptick of acquisition activity in the MEC space, multi-product integration is an area that MEC companies are facing tremendous pressure to address today. Particularly as telecom companies acquire media companies, leaders are questioning how they take those products and services and integrate them in a way that maximizes revenue and creates a more compelling product offering for consumers.

As another example of innovation, blockchain brings a lot of unique challenges to the MEC industry. A lot of it has to do with understanding what blockchain is, how to commercialize it, and how to integrate it into offerings. While blockchain is important, it's still bleeding edge technology that’s not yet fully defined. As a result, our clients are still grappling with how to commercialize it.

Q: How has cybersecurity as a strategic priority evolved over the past year or so?

A: Cybersecurity was a top strategic priority in 2018. We saw it dip in importance this year because it's now something that MEC companies have addressed, either through new offerings or building better security into networks as a way of working. While Cybersecurity will always be a priority, with a secure foundation established, MEC companies now feel confident that they can shift focus into new areas like CX.

While companies are more generally more confident about addressing cybersecurity in 2020, privacy is a growing focus amidst the rollout of new laws and regulations in the U.S like the California Consumer Privacy Act (CCPA). Specifically, companies are zeroing in on how they can address data privacy while remaining cognizant of customer needs.

Q: Cost reduction and digital adoption are the two of the top factors driving change across industries in 2020. What does this mean for MEC companies?

A: Given the availability of new digital technologies and the need to keep costs down, companies are increasingly trying to steer their customers to self-support. While this benefits companies from an operational efficiency standpoint, it is also a trend that customers are asking for in the products they purchase.  MEC leaders are asking questions like, how can we better enable our products and services for self-install? How do we provide better tools for self-service on the products that customers currently have? By answering these questions, MEC leaders can drive operational efficiencies to help customers get what they need, when they need it, and how they need it

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