“Changing consumer preferences and a litany of new market entrants have flipped media and entertainment business models on their heads. Consumers are watching, reading, and listening to content from new digital sources that cut out the go-between distributor — and they’re doing this from numerous devices, from anywhere they please.”
That’s the opening paragraph of an Executive Summary to the SalesForce Connected Audience Report, which takes an up-close look at how audio and video are being consumed. How are these preferences impacting your business? What does it mean for your future growth? Talking points for your company’s evolution may lie within.
To the surprise of few, freedom to access content where they want, and when they want, is the hallmark of media entertainment consumption in 2018.
There’s also the personalization that over-the-top (OTT) providers such as Netflix, Hulu, Amazon Video and CBS AllAccess bring to the table. “As a result, traditional media outlets are trying to keep pace,” SalesForce notes.
That would be broadcast TV, and the radio industry.
As these changes in consumer media habits have already transformed the broadcast media industry, consumer expectations of media and communications companies will only rise. “Delivering on these skyrocketing expectations will depend on more sophisticated application and data integration,” says SalesForce, which surveyed some 3,000 media consumers across the globe for its report.
While consumer behavior in Malaysia may differ from those in Manhattan — both the town in Kansas and borough of the City of New York — there are some commonalities worth noting.
Simply put by SalesForce, “Companies who get ahead of these changes, by first understanding how new behaviors are reshaping old business models, will be a step ahead on the trail to success.”
Four key takeaways were presented by SalesForce.
- Consumers’ Media Habits Have Fundamentally Changed
“Consumers’ options for watching, listening, and reading content have been broadened exponentially by new media and devices,” SalesForce says. “More media consumers now watch video content on a computer or smartphone than on a TV. The shift toward digital consumption is due to more than convenience though — it’s also due to the personalized engagement new media provide. More millennials discover content through personalized recommendations than from traditional ads or publicity.”
While traditional media sources still enjoy large viewership, younger generations are now more likely to regularly stream video, TV, or movies online.
Even Gen Xers tend to view more streaming video than cable TV.
Therefore, broadcast TV stations should be readily available via hand-held devices. This includes access via such Apps as Xfinity TV, and making as much local content available via a station app. Furthermore, news distribution on an OTT platform such as NewsOn — if not your own OTT-focused offering on a device like Roku — is more essential than ever.
“Younger generations also embrace streaming music services like Pandora and Spotify,” SalesForce reminds us. “Millennial and Gen Z consumers are 3.2-times more likely than traditionalists and baby boomers to stream music at least on a monthly basis. Across all age groups, consumption of streaming audio services surpasses that of downloadable music files like MP3s.”
Note that radio is not directly mentioned here. But, streaming music is. Perhaps it is time for radio to pitch itself better as a perfect streaming companion, and play up the ability to connect through personalities on the air. The wall of music is Pandora and Spotify; the friend playing the music you love is Radio, available in more places than those two digital giants.
What are your broadcast media stations doing in terms of personalization? Does this extend to social media? These questions may also yield answers that can truly bring Radio into the digital realm in a powerful and robust way.
- Digital Content Consumption Surges While Traditional Tries to Keep Pace
“The shift toward paid digital media subscriptions is skyrocketing,” SalesForce says, noting that some 61% of media consumers have increased consumption of subscription-based streaming video over the past two years. “Consumers point to anytime, anywhere content accessibility as the primary factor for their shifts. Additionally, they cite a diversity of content that may not be supported by traditional distribution models.”
- New Mindsets Shake Up Old Business Models
“Accustomed to 1-to-1 engagement from a variety of industries, consumers are shunning the one-size-fits-all packages that have long been hallmarks of media distribution,” SalesForce notes. “Instead, today’s media consumers are increasingly likely to pay for additional services that meet their unique needs. For instance, 4 out of 10 millennials value personalized recommendations enough that they’re likely to pay for them.”
- Media and Communications Companies Face Great Expectations
This is where broadcast media should listen up.
“Although change in the industry has been dizzying, the transformation is in its early stages,” SalesForce predicts. “Maintaining competitiveness will require media and communications companies to rethink how they monetize audiences by cultivating an ecosystem of producers, distributors, and partners.”
SalesForce research finds that some 62% of media consumers expect partnerships that will create more comprehensive content options two years from now.
While radio isn’t mentioned in the United States country profile in the report, that’s not to say it is being ignored. It’s not a top 5 outlet with decreased consumption. That said, radio has once again an opportunity to show how it meshes perfectly with visual digital media and is also a digital audio solution.
What has the most decreased consumption? Newspapers are the obvious answer. But, look at where TV stands:
The other interesting statistic for radio: Look at the top 5 outlets with increased consumption.
Have subscription-based streaming music services reached their apex?
Lastly, the top reasons why media consumers have decreased consumption of five forms of “traditional media” over the past two years were shared by SalesForce.
Here are the top 5 reasons for tune-out of traditional AM/FM stations, again on a global level:
- The content is not generally aligned with my specific interests
- The content is not available anytime I want
- The variety of content is subpar
- The content is not available on my preferred device
- The overall quality of content is subpar
For the record, the No. 1 reason for global consumer tune-out of broadcast TV networks is the same as that for radio: interest in the content is simply low.
When asked about decreased consumption of basic and premium cable and satellite TV, the No. 1 reason is cost. The No. 2 reason? “I’m paying for content that I don’t care about.”
The learning lesson here for broadcast media in the digital age is simple: Content wins.
Now is the time for radio and TV to digest this message, and react accordingly.