Technology will redefine business models: IBM report

IBM Business Consulting Services (BCS) expects the shifts in technology and consumer consumption will force media companies, particularly in the broadcast and film industries, to redefine their business models over the next five to seven years.

The media and entertainment landscape, both in India and overseas, is changing dramatically. In order to survive, media companies will have to allow consumers round-the-clock access to protected media content for variable fees, IBM BCS's latest report "Media & Entertainment 2010" said.

The report says customers should have access to information on their own terms. They should have the right to purchase and download the rights to a book or other media and have it configured in devices of their choice or delivered immediately in traditional hard or soft cover.

Consumers should be able to order the film of the book, the soundtrack or only one song or a single quotation to use in a variety of formats "" from a term paper to a wall poster, it says.

As per IBM's forecast, companies will survive on not just creative content but on creative intelligence about customers and markets.

Media companies today toil over many issues. One of them is bridging the historic model of systematic, promotional based, one-way delivery to mass audiences to a world incorporating digital technologies, analytics driven marketing approaches and distribution models. It is precisely this factor which will bring about the change.

For this the company will have to create or convert all content to digital format. They will have to open digital doors to let consumers contribute, produce or author dynamic content.

The largest investments in content today are in the creation, marketing and distribution of physical media, but costs can be slashed with the digital distribution of online media.

Once these and many other factors are taken care of consumers will be able to experience many independent artists and producers who will offer their music, short videos and movies completely free.

These artists and producers will be able to make money from tie-ins, product placements, webcast concerts and events, and fan merchandise.

Millions of micro-payments will add up to sizable revenue streams from the sale of new or archived digital content, much of which will never travel to a theater, retail store or TV station - it will be delivered online.

The conglomerates, traditional studios and publishers, added the report, will open up their inventories, putting old and new digitized content online in various forms for variable fees.

The same song, movie, or other media will cost more or less, depending on complex variables such as age, sales tracking, or even the rarity of archival content.

"We're seeing the revolution in the media and entertainment industry and the market environment in India is no different," said Arvind Mahajan, partner, communication sector, IBM Business Consulting Services, in a media release.

He explained that there are already companies emerging today which are embracing the technological capabilities. These companies are working through the various issues in an attempt to embrace new ways of delivering content and related assets as per the choice of an individual.

This transformation indicated the report is expected to take place by 2010. Management of digital media capabilities will be key basis of differentiation amongst media companies, the report added.