Accenture launches 'Media Thrive Index' for Media and Entertainment Industry

The report concludes that radical reinvention is critical for media companies’ lasting success.

Accenture has announced the launch of its 'Media Thrive Index' to assess the impact of reinvention strategies on media and entertainment companies’ ability to succeed financially and strategically in an increasingly challenging industry.

The Media Thrive Index is a response to the findings of Accenture’s third annual “Reinvent for Growth” global entertainment study, which surveyed 6,000 consumers across ten countries including India about their media consumption behaviours. The study highlighted a complex landscape of challenges facing traditional media companies in which marginal strategies won’t restore them to economic or strategic health.

It assessed 50 different strategic options for reinvention, identified from a range of initiatives launched by companies and from Accenture’s own strategic analysis. The assessment found most options so far are modest adjustments, which do not substantially alter a company’s economic profile. Only radical moves show a path for legacy media companies to secure the sound financial footing needed to thrive and sustain success.

For example, Sony Pictures shunned the idea of becoming a direct-to-consumer (DTC) streaming service to focus on producing and selling content to the big streamers in addition to reinvigorating its portfolio to span video games. This, as its parent company is also making a bold move into the electric vehicle market. The New York Times is gaining new strategic and financial resilience through a portfolio of offerings that include consumer apps for audio/ podcasts, sports, cooking, shopping, and games.

Key findings from the study highlight some of the challenges facing media organisations:

Tired of Browsing – More than 35% of consumers in India say they struggle to navigate between different entertainment services, apps and devices while 72% say recommended content does not match their interests. The survey reveals that 57% of consumers increased their time spent on Subscription Video on Demand (SVOD), but also 26% of them indicated that time on linear TV (nonsports) decreased since last year.

The report mentions that, "Companies such as Amazon, Google/YouTube, Apple and Microsoft are investing heavily in streaming, gaming, and live sports. Their diversified revenue streams give them a safety net that pure-play media companies don’t have. Their deep pockets enable them to offer an alluring mix of free content, exclusive perks, and competitively priced subscription services that traditional media is hard-pressed to match."

Additionally, Walmart and Reliance Jio in India are extending into streaming, and a wide range of products across connectivity, news, books, movies, music, payments, groceries, devices, education, health, and financial services (in addition to delivery services, auto care, travel and fuel). Social media company X, formerly known as Twitter, is equally evolving its offerings by adding video, Gen AI and finance capabilities with the aim of becoming a "super app.”

Serial Churners – Nearly 65% of consumers in India are cancelling and resubscribing to services based on the availability of desirable content. In 2023, 63% of consumers in India cancelled more subscriptions than the previous year.

Big Tech companies are now pioneering lifestyle bundles, such as Amazon’s Prime membership and Apple’s Apple One subscription, which augment their market power and strategic advantage. They support the consumer's lifestyle with services such as free shipping, grocery delivery, streaming video and music, photo storage, video game streaming, and pharmacy assistance.

Shifting Preferences – Two-thirds of consumers in India consider user-generated content to be as entertaining as traditional forms of media. In all scenarios presented to consumers, such as “when I want something funny” or “when I want to relax,” social media and social video platforms were consistently picked over streaming video services as the media of choice.

Consumers increased their time spent on social media (52%), social video (52%), and video games (50%), spaces where legacy media companies have little to no footprint. Netflix's establishment of its own mobile gaming division and Disney's acquisition of a $1.5 billion stake in Epic Games are examples of how video-focused media companies are expanding their reach into the burgeoning gaming industry.

The study also found opportunities for media organisations to expand beyond traditional content offerings, including aggregation platforms and lifestyle bundles. A majority (89%) of consumers in India said they would be inclined to use a single app to access all their digital services across both media and non-media categories. Additionally, Accenture projects lifestyle bundles to reach $3.5 trillion in consumer spending by 2030 with technology brands better positioned over traditional media brands to be the creators of these bundles.

“While the media industry is growing, the industry players are not. This essentially means that the value is shifting elsewhere. It is amply clear that incremental actions taken with a survivalist mentality will not help media companies thrive in the future,” said Neeraj Sharma, MD and lead for Accenture’s Media industry in Growth Markets. “For media companies, the need of the hour is to place big bets, go where consumers want to be while exploring new avenues of growth, redefining new roles in the entertainment value chain, and tapping new sources of revenue.”

The online survey of 6,000 consumers aged 18+ in ten countries (Australia, Brazil, Canada, Germany, India, Italy, Japan, Spain, the U.K. and the U.S.) was designed to assess the impact of shifting media consumption habits on company strategies and offer suggestions for brands across the media spectrum to adapt their models to be more relevant and successful with customers. Fieldwork was conducted between November and December 2023. Oxford Economics assisted in developing the survey, carrying out fieldwork, analysing the data, and deriving key insights.