Public Service Broadcasters (PSBs) are
facing an existential crisis due to a radical change powered by changing consumer
habits and digitization in the media industry. The challenge for PSBs is to
stay relevant by becoming leading providers of high-quality content to their
target audiences across all media channels while continuing to fulfill their
1. Become Integrated Providers
To adapt to the boundary-less and fast-paced digital
environment, PSBs need to expand their reach into non-linear, on-demand content
that is delivered through a wide array of PCs and electronic devices. The need
of the hour is for them to break down the borders separating TV, radio and
online platforms and transform into integrated content providers
2. Track Target Audiences
The idea is to successfully deliver different genres of
content via different media platforms to target audiences throughout the day.
The media touchpoint approach measures audience relevance on the basis of how
often and at what times a consumer uses different media platforms
key area of concern for PSBs and other media companies at large, is to stay
relevant in the face of advanced global digital companies that provide content
on demand, and customize it en-masse, leading to a better customer experience.
This has made the traditional media companies believe they need to revamp the
way they think, collect and use their data.
good news is that the awareness and acceptance of a technology overhaul has
meant that the job of a CIO in a media, publishing and broadcasting companies
is no longer a fringe concern, but a core proposition. And by adopting a
forward-looking Digital Strategy, long-term competitive gains can be regained.
In recent years, radical change in the
media landscape across geographies has posed severe challenges to publicly
supported broadcasters. Audience engagement with public TV and radio has
steadily declined since the 1970s due to market liberalization and the entry of
Now, a revolutionary change in the global
media industry is being brought about by digitization and changing consumer
habits. The best way for PSBs to remain relevant in this disruptive environment
is to be leading providers of high-quality content to their target consumers,
and to fulfill their public service mandates at the same time. Instead of
exiting the traditional business of delivering national and regional TV
programmes, PSBs must strengthen their online activities to become integrated
providers of content across all media.
Adapting to this changing industry
landscape would require an in-depth understanding of consumer habits and
behavior. Each PSB should identify those programming genres in which it can be
a content leader, and those in which it can afford to be a follower. Decisions
regarding investments in content should be based on the “customer journey”. How
do consumers consume media throughout the day? Which media platform are they
using at any given time?
To gain insights in the customer
journey, BCG proposes the media touchpoint approach that
measures the relevance of programming to target consumers across all media.
Under this approach, consumer relevance is measured on the basis of how often a
consumer uses different media platforms. It also measures how many of these
touchpoints are generated across media – via PCs, TV sets, smartphones, radios,
or other devices.
With this knowledge, PSBs can analyze
the benefits and costs of providing certain genres of content over a particular
media platform. By doing so, PSBs can substantially increase their odds of
making smart bets on both conventional and digital programming.
digital companies (FANGA- Facebook, Amazon, Netflix, Google and Apple) have a
two-fold proposition: giving consumers the opportunity to better manage their
time, and giving advertisers the opportunity to better target their promotions.
Because of this
new programming, as well a change in how the programming is delivered, the old
ways of monetizing the content would lose some if the currency. The onus is now
on a more accurate estimation of a consumer’s short-term purchasing behaviour
by making his/her profile more granular and detailed. This can be achieved by a
smart way of collecting and analysing user as well as consumption data. The FANGA
companies, again, are far advanced in this domain. This leaves no choice for
the PSBs but to rehaul their digital strategy, both in terms of programming, as
well as data.
Rising Challenges for Public Broadcasters
The recent decades have seen three
waves of change that have transformed the broadcasting industry at the core,
with significant implications to PSBs.
The first wave was market liberalization, in
which commercial radio and TV stations targeted at mass audience were authorized
by governments in Europe and Asia.
The second wave in the 1980s saw more
and more channels in viewers’ homes via cable and satellite TV.
Offerings included international mainstream channels as well as channels that
offered similar or the same kind of programming offered by PSBs.
The third wave – digitization- is
currently in action, and possibly the most disruptive. Fresh, nonlinear
platforms such as online streaming are breaking the boundaries that separate
different media, and allowing consumers to receive any kind of content at any
time and place. Also, rapid penetration of electronic devices such as
smartphones and tablets has accelerated the rate of innovation in the media
The era of digitization presents three major
challenges for PSBs – changes in media consumption, financial pressures, and
in Media Consumption
The penetration of digital TV and
broadcast Internet in homes around the world has drastically increased over the
recent past, and will continue to rise. However, traditional radio and TV will
still hold value in 2020: BCG estimates that traditional media will hold 60% of
viewership across all target sections, and more than 80% of viewership among
people aged 50 and more. But overall viewership of linear TV will continue to
face a steady decline.
The digital migration will be driven by
porting effect –
Studies demonstrate that as viewers age, they continue to stay loyal to the
media they grew up with. For example, older viewers prefer to stick to TV sets
and print newspapers, despite the variety of options available now.
market effect – This factor is driven by technological advancement. The
most powerful impact has been caused by improved broadband infrastructure,
which brings high-speed Internet to more and more homes at affordable rates.
Such advancements pave way for new forms of media and form an ecosystem with
The shift of consumers towards
non-linear media poses a huge challenge for the traditional PSBs. The
investment required to pose significant competition to digital players for
popular programming is rising. But due to very limited public support, PSBs do
not have many options to shoot up their revenues.
The primary issue is that of scale. The
digital entrants have a strong global reach, sophisticated technologies,
considerable expertise, and a treasure of consumer data gathered over years to
better target consumers. Even the largest PSBs cannot match up to this level of
Public funding for PSBs around the
world has either stagnated or decreased. PSBs would also not be able to sharply
increase licensing fees for their content, due to their historical mandates.
Moreover, viewers can now receive any kind of content they want at any time
through private channels and the Internet.
Overall advertising revenues are slightly
increasing in line with the GDP. However, a sharp increase in advertising is
very difficult to achieve for most PSBs. Even if advertising rules are
loosened, PSBs would have to fight for a substantial share in a brutal and
The existing regulatory structure
restrict the kinds of programming that PSBs can provide, and also their
advertising avenues. PSBs may also face legal constraints on their ability to
offer online content. The regulatory constraints on advertising vary substantially
from country to country. For example-
BBC cannot air
radio or TV advertisements in the UK. It can run only limited online
advertisements on mobile apps and on international websites.
ARD of Germany is allowed to air commercial
advertisements on TV, but with a maximum ad time of 20 minutes before 8pm
Monday through Saturday. The PSB may not run online advertisements.
Strategy for Cross-Media Success
To stay relevant in today’s disruptive
world, PSBs need to build a comprehensive platform and content strategy. New
structures are needed to ensure that this strategy is effectively fulfilled on
a financially sustainable basis. To catch up with the incumbents of digital
media, PSBs must accelerate their pace of digital growth. They must also stay
up to date with digital technology and service trends. To achieve this, BCG
proposes that PSBs adopt a new system for measuring consumption of media
content and define their content portfolios.
is important for broadcasters to have an understanding of how their different
target viewers segmented by suitable demographics consume media throughout the
day across genres and channels. BCG defines a new metric called media
touchpoint as contact with any media platform during a 30-minute duration.
Measuring media touchpoints gives a
clear idea of how media are consumed across different platforms. It can also track
parallel usage – for example, if a viewer watches a 2 hour movie on TV and
spends 2 minutes browsing the internet on an iPad, his/her actions would amount
to a total of 4 TV touchpoints and 1 mobile tablet touchpoint. These data
points can add substantial weightage and detail to information captured from
the existing metrics.
By developing an exhaustive
touchpoint-tracking system, PSBs can generate insights into what makes content
relevant to target consumers. This metric can also be extended to add new
features that could help gain more information on the media consumption
patterns and preferences.
Fine-Tuning the Content Portfolio
Once a thorough understanding of the
consumption behaviors of different target groups is obtained, PSBs need to
aggressively restructure and refine their content portfolios to cater to those target
Relevance and Reach: It is important to differentiate the
programming that is relevant to the masses from the programming that is
relevant to specific target groups. A PSB must decide whether to lead or follow
in each content genre.
Genre Economics: PSBs can make better decisions by
implementing genre economics, which is the cost-benefit analysis for each genre
and subgenre. By combining genre economics with the media touchpoint approach,
PSBs can estimate the amount of investment needed in different genres.
Building Cross-Media Capabilities and Structures
PSBs need to break down the borders
separating the different media platforms – radio, print, TV and online. Each of
these platforms must be integrated across the organization. This implied that
PSBs need to build cross-media capabilities in everything from market research
and advertising to technology, innovation and human resources.
Making Funding Sustainable
All the challenges mentioned
essentially require a strong and sustainable financing model. Increasing public
funding may not be a feasible option in all countries, but PSBs can achieve
significant cost savings by transforming their organizations and adopting an
analytical approach to investments. PSBs also need to look beyond revenues that
are generated from pure programming and explore new opportunities such as
online gaming, second-screen offerings and video-on-demand services.
Deep Data Insights: An Opportunity
A key reason why data management and
optimization has assumed great importance in new-age media management is that,
this allows to fill the gaps and unknowns in the consumer profiling.
The digitization of industries allows
for a more transparent and discoverable world. If customer profiling was
largely based on high-level demographic tags earlier, they are now more fleshed
out with their names, verified visits, purchase history and trends, consumer
behavior, along with their social profiles. All of these data points can be
used to more accurately predict the short-term buying decisions that a customer
is likely to take.
While there are reservations that this
encroaches on the right of privacy for customers, there is no doubt that this
is a huge advantage for media companies, especially for monetizing their
advertisement streams. According to a BCG report, improved customer
segmentation and targeting can lead to media companies charging up to 1.5 times
more from advertisers.
Here too, pure play digital companies
seem to have an upper hand since they already collect this kind of data about
their users. The traditional media companies, especially broadcasters, can
bridge this advantage if they utilize diverse sources of data. As has been
suggested before, PSBs would do well foray into different consumption channels,
and consolidate all streams of user data to create a more rounded profile of
the end-consumer, which can provide a richer behavior and usage patterns.
PSBs must move beyond their “analog
past” and move to a truly cross-media business, and harness the synergies
between all platforms, both in terms of distribution and data management.
Two areas of opportunity and growth
that can be unlocked with superior data management are:
TV: Providing marketers the opportunity to
target customers based on geographies and demographics. As smart TV penetration
goes up , and with a better profiling, the broadcasters can target customers
AI to automate indexing of media: If the resources are labelled
appropriately, AI software can automate indexing and filing of videos, as well
as create videos out of articles etc.
Steps in the Digital Journey
The main challenge that the new digital
strategy must resolve for PSBs is consolidating the various sources of data to
augment the consumer data in order to create more relevant consumer segments.
This effort would involve contributions from the IT teams, various business
streams or departments, data and IT architects, as well as the legal land
compliance teams in many cases, in order to ensure that both the current and
future business needs are met.
For this, investments need to be made
in the following three segments:
This is the starting point to drafting
a new digital strategy for all broadcasting companies: where to look for data.
This can be answered by following measures:
long-term objectives to dictate short-term goals and tactics. The ROI and ease
of implementation of the strategy and the business impact that is targeted
would help shape the strategy. Five key priorities that media companies may
debate and adopt are given below in the exhibit.
The governance of the data effort
should be done centrally in the organization. This would give a whole-system
picture of the quality of data, and how it is being shared between various
business units and departments, leading to consistent results. Shared
governance would be made easier by a comprehensive data management effort
conducted centrally in the organization.
People & Organization
Having the right team is pivotal to
over-hauling the data strategy for PSBs. Having the following teams would be beneficial:
A dedicated data experts team: Headed by the Chief Data Officer
(CDO), and staffed with data scientists and IT operators, this team would scout
for, create or manage the technology that would enable data collection and
management. This would also define the IT Architecture for the solution
Department teams: This would be IT developers, business
analysts and data people who are involved in collecting and managing the data
for their own departments or business units.
Centralized Steering Committee: This team should set up initial priorities, final goals,
metrics and KPIs and provide governance support to both central and department
Technology & Systems
A renewed data strategy hinges on the
choice of technology stack that would support the strategy execution.
Generally, there are two options available: adopting an integrated stack
(single-vendor) solution, or going for a best-of-breed solution. This is a
strategy decision based on the organization’s personal risk appetite, however,
the trend points towards a majority of the companies opting for best-of-breed
solutions as they offer more flexibility and freedom to concentrate on core
Agenda for the Nonlinear World
Despite the challenges, PSBs have a
number of advantages that they can cash on to remain relevant in the digital
world and also turn the game. To succeed
in the transition to the digital era, PSBs need to adopt the following goals-
Strengthen the core: PSBs need to adopt a mindset that the
aim is to win customers every day by providing relevant content at the right
Build a cross-media organization: Organizational transformation must be
centered on breaking down silos and integrating all media platforms. PSBs
should also build their technological capabilities and breed expertise in
consumer trends and market analysis.
Get into shape: PSBs must aggressively focus on
efficiency, especially in support functions that are not part of their core
activities, and they must make critical decisions on shared services and
Engage with the regulator: PSBs must regularly interact with
regulators to educate them about changing consumer behavior so as to update
mandates and business models to suit the digital landscape.
Actions Traditional Broadcasting Companies Must Take
Although there might be varied
challenges that PSBs might face, the following are largely the most fundamental
steps that they must take in order to make data an integral asset in future:
Hire the Right Talent: Adding the right resources would enable
them to use technology most optimally. Most companies look to add data
scientists and IT architects in their fold.
Identify Data Priorities: Initial plan of action would be based
on which businesses as well as projects to undertake. Broadcasters must
identify KPIs such as Return on Investment, Ease of Implementation, Time
Horizon, etc. to take the decisions.
Develop a Plan for Integrated Data: Consolidating data from various sources
and streams of businesses has its merits in providing a richer consumer
Balance Central Efficiency and Business
Units’ Benefits: For
smoother adoption and sweeping changes, it is imperative to have the buy-in of
all departments and business units. It is therefore helpful to think of measures
that not only advance the efficiencies on the organization level alone, but
have trickle down effects in departments as well.
Use Technology Standards: This will decrease the time to market
since there already exists a lot of industry support for standard technology
Make Data Management Part of CEO’s
the role of a CIO has assumed greater importance, empanelment of data
management in CEO’s agenda would underline the significance and weightage the
company places on this issue, and would lead to greater acceptance.
The nature of competition and the
landscape that the media and broadcasting companies face today are
unprecedented. Not only do they have to fend off their traditional competition,
but also tackle the threat that digital media companies are mounting.
Appreciating the severity of the
digital threat is only the starting point, and companies hence must utilize the
support from the board of directors and the business leaders to channel their
focus to a new Digital Strategy in order to remain relevant.
Moving to a vastly more on-demand and
non-linear programming content and a more efficient data management and
collection to offer more customized and personalized offering to customers and
advertisers alike, are only the first steps in re-imagining the media sector in
the near future.