Media and entertainment executives see the growing ability and eagerness of individuals to create their own content as one of the biggest threats to their business, according to results of a survey released recently by Accenture.

In its annual survey of senior executives in the media and entertainment industry, Accenture examined the growth strategies of companies across the landscape of advertising, film, music, publishing, radio, the Internet, video games and television.

More than half (57 percent) of the respondents identified the rapid growth of user-generated content-which includes amateur digital videos, podcasts, mobile-phone photography, wikis and social-media blogs-as one of the top three challenges they face today. In addition, more than two-thirds (70 percent) of respondents said they believe that social media, one of the largest segments of user-generated content, will continue to grow, compared with only 3 percent of respondents who said they view social media as a fad.

“This is just the beginning for a rapidly changing landscape where the media content environment grows more fractious and the user gains more control and power,” said Gavin Mann, digital media lead for Accenture’s Media & Entertainment operating group. “Traditional, established content providers will have to adapt and develop new business and monetization models in order to keep revenue streams flowing. The key to success will be identifying new forms of content that can complement their traditional strengths.”

The new landscape offers opportunities as well as challenges, according to the study, as two-thirds (68 percent) of the respondents said they believe that within three years their businesses will be making money on user-generated content, Sixty-two percent said they believe their companies will make money through advertising and sponsorships of social media. Other sources of profits cited were subscriptions (21 percent) and pay-per-play offerings (18 percent). However, a quarter (24 percent) of respondents said they do not yet know how their businesses will profit from user-generated content.

The study included interviews with industry giants like Roger Faxon, chief executive of EMI Music Publishing; Leslie Moonves, chief executive of CBS; Doug Neil, senior vice president of digital marketing for Universal Studios; and Sir Martin Sorrell, chief executive of WPP Group PLC.

Survey participant Sir Martin Sorrell said technological change and the consolidation of digital and non-digital business models will have a dramatic impact on the media and entertainment industry over the next five years. “The winners will be those who can probe and analyze the changes and manage and merge online and the offline most successfully,” the WPP chief executive affirmed.

Universal Studios’ Doug Neil, senior vice president Digital Marketing: “Digital distribution of content will be increasingly important in three to five years with the convergence of computers, TV and home entertainment options,” he said. “To succeed in this environment, you need to innovate and anticipate the needs of the consumer, be willing to take risks and try new things.”

Faxon, of EMI Music Publishing, said the music industry is moving “from a sales model to a consumer consumption model or participation model, where its economics are predicated on the use patterns of consumers as opposed to the purchase patterns. In essence the commercial roles of music companies will be more as facilitators for bringing music and the rights that support them in to the market place, as opposed to being originators of the content itself.”

Broadcasters surveyed by Accenture also predicted greater choice for consumers. “Technology will continue to alter the distribution landscape, allowing people to access content on their own schedule, wherever they are, in all kinds of ways,” said CBS’s Moonves. “Current technologically driven distribution channels will expand and new ones will open. But without compelling content, every new platform is an empty shell. Companies that can combine world-class content with powerful national and local distribution will have the competitive advantage.”

The executives surveyed in 2007 showed greater optimism about content driving their revenues than those surveyed last year, with 32 percent of respondents in this year’s survey stating that content will drive their revenues, compared with only 21 percent of respondents in last year’s survey.

Methodology
As part of an annual study to examine the growth strategies of companies in the media and entertainment industry, Accenture surveyed 110 senior executives at advertising, film, music, publishing, radio, Internet, videogame and television companies in North America and Europe. Approximately 60 percent of the respondents were from North America (the United States and Canada), with the remaining 40 percent from Europe (Austria, Belgium, Spain, Italy, France, Germany, Switzerland and the United Kingdom). The survey was fielded for Accenture in North America and Europe by The BPRI Group during the first quarter of 2007.

Source: Accenture Digital Forum

Tags: entertainment industry, media industry, user-generated content

More than half of communications industry executives believe that Internet Protocol Television (IPTV) can generate significant revenue within the first three years of service, according to findings of a survey released recently by Accenture and the Economist Intelligence Unit (EIU).

The survey of nearly 350 executives from telecommunications, broadcasting and media companies across 46 countries in the Americas, Europe and Asia revealed industry-wide confidence in the longer-term outlook for IPTV, with 60 percent believing that IPTV will generate significant revenues within three years.

However, confidence in the short-term outlook remains mixed, with slightly more than half (52 percent) of respondents saying they are not confident in the ability of IPTV to generate significant revenues within the next 12 months. On the other hand, one-fifth (20 percent) of respondents said they are confident or very confident, and more than one-quarter (28 percent) said they are somewhat to fairly confident, that IPTV will generate significant revenues within 12 months.

“The business case for IPTV, its value-added benefits and its potential remain strong,” said Dan Elron, managing director for Accenture’s Communications practice. “In the long-term, the key to achieving high performance through IPTV is to be visionary, ambitious and open to innovation from many sources. For the shorter term, the key is to quickly adapt to consumer feedback and jump over technology hurdles.”

Who’s got the money?
When asked what they believed would be the principal revenue source for IPTV, about half (46 percent) of the industry executives surveyed selected advertising. However, network operators, as a subset of all respondents — which included equipment vendors, consumer electronic companies, content providers and broadcasters/studios — disagreed, with three-quarters (74 percent) of network operators saying they believe that subscription fees for premium content will provide the largest recurring revenue stream, followed by basic content subscription fees and then advertising fees.

“This difference in opinions reflects the broad uncertainty around how media will be delivered and what customers will be willing to pay for,” said Elron. “Carriers are used to subscription revenues and believe that the IPTV experience will soon be comparable to or even better than current video offerings, whereas media executives are more cautious and skeptical of a scenario where a new revenue stream is created so rapidly. The reality is that both revenue streams will be important, but the challenge will be to harness the power of this new technology to create a new video experience that makes consumers and advertisers willing to pay more than they do today.”

When asked to identify reasons for pursuing the IPTV market, the greatest number of respondents (42 percent) cited new revenue streams, followed by acquiring new customers (28 percent) and increasing sale of broadband access connections (21 percent).

Overwhelmingly, executives believe that discounted pricing through service bundling will be the primary motivation behind consumer spending. Nearly two-thirds (64 percent) of all respondents — and three-quarters (74 percent) of network operators surveyed — said they believe that discounted service bundles provide the greatest enticement to buy IPTV. The ability to move content between devices was also cited as an important enticement, selected by 38 percent of respondents, as was the convenience of a single bill for multiple services, selected by 31 percent of respondents.

Still some hurdles to clear
Yet there are obstacles to IPTV adoption. One-quarter (25 percent) of respondents said that the primary short-term obstacle to IPTV adoption is a quality-of-service issue relating to unproven architectures, low bandwidth and other technology issues. The same number (25 percent) said they believe that quality-of-service issues will be resolved over the next three years, leaving stiffer competition from alternative TV providers as the toughest challenge to the adoption of IPTV. Another challenge to IPTV adoption, cited by 19 percent of respondents, is high subscription fees due to the high cost of network access and equipment.

When asked which types of companies are most likely to generate revenue from IPTV, the vast majority (87 percent) of respondents selected content providers, followed by telecommunications providers (72 percent). Not surprising, more than two-thirds (69 percent) of respondents said that traditional broadcasters have the least to gain from IPTV, a view held strongly by respondents across all company types, including broadcasters themselves.

About the Survey
The Economist Intelligence Unit surveyed 341 media executives in October 2006 to identify their beliefs about the potential of IPTV. The survey, conducted via email, covered 46 countries in three major geographic regions, with 35 percent of respondents based in Europe, 33 percent based in the Americas and 32 percent based in the Asia-Pacific region. Forty-six percent of respondents were C-level executives, and the other 54 percent consisted of senior managers such as heads of business units and directors of marketing or planning. Companies represented included fixed network operator / services providers, integrated fixed-wireless telecommunications operators, cable / satellite network operators, telecommunications equipment manufacturers, consumer electronics manufacturers, TV broadcast networks, film studios, other content providers (e.g., news, music, games) and value-added services providers (e.g., billing, customer care), among others.

About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of about 700 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world’s leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

Source: Accenture Digital Forum

RELATED LINKS
For more details of the study, visit International IPTV Consumer Readiness Study

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Tags: internet protocol television, iptv

Executives at the world’s largest companies say their chief concern as their businesses become more global is the ability to maintain a common corporate culture around the world, outweighing even geopolitical issues, according to results of a survey released recently by Accenture.

The annual survey of more than 900 C-suite executives in the United States, Italy, France, the United Kingdom, Germany, Spain, Canada, Japan and China is designed to identify the business priorities and major concerns of executives at some of the largest companies around the world.

When asked to identify the greatest challenges to building global enterprises, the greatest number of respondents - 49 percent - selected the “ability to maintain a common corporate culture,” followed by “understand local customs and ways of doing business,” selected by 44 percent of respondents. Forty-one percent of respondents selected the ability to “service remote clients/customers effectively” as a major challenge, and more than one-third of respondents (36 percent) selected “the impact of the global economy.” Only 25 percent of respondents selected “the impact of different geopolitical issues” as a major challenge.

Many companies seen as poorly equipped
In addition, nearly one out of four respondents (22 percent) said that their organizations are poorly equipped to succeed as global enterprises, despite the fact that the majority of respondents said that their employees, suppliers and customers are more global now than they were five years ago. This issue is particularly noteworthy in two countries, as one-third of respondents in Japan and almost half (48 percent) of respondents in China said they believe that their organizations might face difficulties in adapting to the global market.

Only 55 percent of the executives surveyed said they believe that their organizations are able to develop leaders with the aptitude and skills to adapt to rapid change and new learning. There are significant geographic differences: two-thirds (67 percent) of respondents in Germany said they believe that their organizations are developing global leaders, compared with less than half (45 percent) of respondents in Japan.

“To succeed in today’s global environment, companies must create a strong and diverse leadership team with knowledge spanning disparate markets,” said Mark Foster, Accenture’s group chief executive-Business Consulting & Integrated Markets. “The critical challenge for management is to ensure that companies maintain their core values and corporate identity across many countries, especially as industry becomes more knowledge-based and increasingly, work is handled by virtual teams. They also must build organizations that abandon the traditional geography-based operating models, which often fail to recognize dramatic differences in market needs and the resulting management challenges,” said Foster.

About the study
As part of an annual study to identify senior executives’ top concerns, Accenture conducted a telephone survey of 919 senior executives at many of the largest and most influential organizations around the world. Respondents represented all major industries and the public sector and included executives at the highest levels of senior management (”C-suite” executives) as well as heads of key functional areas, such as human resources. For this year’s study, fieldwork was conducted between September and December 2006.

Source: Accenture Digital Forum

Tags: corporate culture, global exec

Accenture has been positioned in the “leaders” quadrant in Gartner’s recent assessment of supply chain management service providers in North America.

In the report, “Magic Quadrant for North American SCM Consulting and Integration Service Providers,” Gartner evaluated 14 service providers across North America on their ability to execute and their completeness of vision.

According to Gartner, “leaders” are vendors that are performing well, have a clear vision of market direction and are actively building competencies to sustain their leadership position in the market.

Gartner evaluated the service providers based on two criteria. The first, “Ability to Execute,” measures product/service, overall viability, sales execution/pricing, market responsiveness and track record, marketing execution, customer experience and operations. The second, “Completeness of Vision,” measures market understanding, market strategy, sales strategy, offering strategy, business model, vertical/industry strength, innovation and geographic strategy. Client feedback is one of Gartner’s most critical measures of a provider’s supply chain practice.

“We strive to help our clients develop supply chains based on operational strategies that enable profitable growth in existing and new markets-and lead to high performance,” said Pat Byrne, managing director of Accenture’s Supply Chain Management practice. “We are pleased to receive this recognition from Gartner and from our clients.”

Source: Accenture Digital Forum

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Read the full Gartner report on supply chain management in North America.

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Tags: supply chain management, magic quadrant

As a new consultant in Accenture, Evan Gregory’s second project was to work with the team helping the New York Power Authority (NYPA) create an energy trading intranet portal. “The project gave me a real opportunity to be involved in the entire project lifecycle — design through development, testing and working with users — and so I was able to see the whole solution come to life,” says Evan.

In New York State, some of the lowest-cost electricity is provided by the New York Power Authority, the nation’s largest state-owned electric utility. To ensure that NYPA facilities, New York residents and businesses receive the best possible price for power, NYPA asset managers face a daily challenge of gauging constantly changing market conditions.

Asset managers are able to develop well-informed bidding strategies only if they have an integrated overview of weather, fuel and energy market information. Such a view was not possible in the past as these managers relied on multiple standalone, disparate systems that were incapable of delivering integrated real-time data from multiple sources, with some operations even requiring error-prone manual entry of data.

The solution? A single energy trading intranet portal for asset managers, analysts and executives, including a real-time dashboard highlighting NYPA’s financial and physical positions. The New York Power Authority turned to Accenture to oversee development and implementation of its energy trading intranet portal because of its deep energy industry knowledge and trading and data integration expertise.

Working closely with NYPA, Accenture assessed the key functional and technical requirements for the trading portal. The major issue was how to maintain data integrity while automatically updating integrated data in real-time. The single dashboard had to display the various indicators that would help NYPA optimize bidding strategies through timely and effective information management. The Accenture solution broke new ground by creating a hybrid technology model that allows both atomic and aggregated data to be stored in different forms, while being displayed in an integrated fashion on the portal.

“I was lucky to be part of a small team working on a crucial portion of the project,” comments Evan. “It was great to get firsthand experience of a project like this one and also to benefit from the tutelage of the team lead, who was very skilled in the toolset we were using. In fact, he ensured that when he left to tackle a new project, I was able to take over as team lead in his place!”

NYPA asset managers now are equipped with a state-of-the-art system that allows them to quickly respond to the dynamics of the deregulated energy market. The groundbreaking energy-trading portal has helped to transform the asset managers’ workflows by removing a significant amount of manual data entry and data integration. This allows the managers to focus on what they do best — concentrate on market analysis and optimize energy-generation bidding strategies in the deregulated energy marketplace. The soundness of NYPA’s strategy is borne out by Accenture’s continuing research, which shows that using technology to create and act on customer and business insights in real time is a characteristic of high-performance businesses. Another trait that typifies high performers: rationalizing, simplifying and standardizing IT to manage the total cost of ownership and enhance productivity.

By teaming with Accenture, the New York Power Authority is positioned to continue its role as one of the nation’s energy leaders well into the 21st century, as it continues on the path to achieving high performance.

Source: Accenture Digital Forum

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Tags: new york power authority, nypa, energy trading

Freight and logistics industry representatives report that truck and cargo thefts result in more than $10 billion in annual losses. In addition to this alarming statistic, freight and logistics companies face constant global pressure to succeed in an uncertain economy, as well as increased attacks on fuel tankers. As a result, more and more freight and logistics companies are investigating new solutions to safeguard their assets and reach for high performance.

Incorporating a number of innovative technologies — including Radio Frequency Identification (RFID) tags and sensors, biometrics technologies, and Global Positioning Systems (GPS) — Accenture Transport Security Services offers a range of security options to secure trucks from a journey’s beginning to end.

RFID tags offer a “smart cargo” option — as cargo loads are able to broadcast their location and any unusual occurrences. Space-age biometrics technology drop-off stations identify the truck drivers through this technology.
Accenture Transport Security Services also helps freight and logistics companies equip their fleets with a number of identification technologies, including onboard computers to:

• Provide GPS access for real-time location tracking.
• Require drivers to identify themselves via a fingerprint scanner before opening the truck door.
• Monitor door sensors and the truck’s location to identify alert conditions.
• Send location and alert conditions to the fleet manager via a wireless network.

Additional innovative technologies also help freight and logistics companies reach high-performance goals.

Automated Vehicle Location and mapping technologies, for instance, can help dispatchers set route parameters and alert the dispatchers if drivers deviate from established routes. These innovations can also provide alternative or more fuel-efficient itineraries.

Fleet managers can implement comprehensive performance programs to encourage safer, better driving and reduced insurance costs by knowing where every truck is at any given time, and knowing each vehicle’s performance level. The Accenture solution can also deliver real-time product location to receiving companies as a value-added service.

Source: Accenture Digital Forum

RELATED LINKS
Find out why now is the time for freight and logistics companies to investigate intelligent device integration.

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Accenture Technology Labs blogger, Ed Gottsman, looks at the implications of a UK government proposal to install GPS-installed governors on motorcycles to prevent speeding.

The global freight and logistics industry must develop information-rich systems to help meet challenges of efficiency and security.

Tags: transport, transport service