The lockdown has accelerated the trend towards an increasingly “digital-oriented” consumer. Companies in the media sector must be ready to seize the opportunities linked to the evolution of the consumption model. Security, data intelligence, cloud and blockchain are at the heart of IT investments.
In a short time, the global pandemic has changed people’s lifestyles and habits, attributing an increasingly central role to digital in consumer experiences. In the Media sector, this phenomenon is translating into the acceleration of a model of use of contents in which digital not only coexists with analogue media (TV, radio and print media) but is beginning to assert itself in a predominant way compared to traditional models. Suffice it to say that during the period of the first lockdown in Italy (March to April 2020), 32% of the population increased their use of online video content, while 5% used this type of service for the first time.
The increasingly intensive use of digital technology, driven by the travel restrictions imposed by the lockdown, has rekindled the spotlight on a problem now infamous in our country – that of the digital divide. The availability of access to the internet and efficient digital services becomes even more essential in a context in which the “new normal” has become that of smart working and distance learning.
Access to the internet and efficient digital services becomes even more essential in a context in which the ‘new normal’ has become that of smart working and distance learning.
Accelerating technological investments therefore represents a fundamental step for the country system, which will also generate positive repercussions on the Media sector: the business component linked to the digital channel will only benefit from the increase in the number of users potentially reachable, thanks to the availability of access to the broadband network.
In the meantime, the competition within the sector is increasingly intense: the pandemic continues to fuel the turnover of video streaming platforms and has further accelerated the transformation of the consumption logics that reward on-demand versus linear. Alongside the established players, new incumbents enter the Italian market (such as the entry of the Disney+ platform in March 2020), making the competitive arena of the sector increasingly crowded.
The players in the Media sector are responding to these challenges by innovating their offer through a continuous expansion of their catalogue with new content and the development of new services. An example is the recent entry of Sky into the world of fixed telephony in Italy. Thanks to the wholesale agreement signed with Open Fiber, the television operator is now able to offer its customers all-inclusive packages that include both connectivity services in fibre and the contents of the satellite platform.
Another area on which some players in the Media market, in particular publishers, are concentrating their investments is that of enhancing their information assets to develop new services aimed at companies and professionals: an example of this is a historic Italian publishing house of periodicals. Specialised companies have capitalised their vertical contents on the automotive sector to create services for the B2B world, for example, by providing leasing companies with the information tools to better manage their fleet and keep its residual commercial value under control.
According to NetConsulting cube, in 2020, the digital market in the Media sector in Italy recorded a value of over €1.2 billion, down 3.7% from the previous year. The effects of the Covid-19 emergency led the Media companies to postpone numerous projects, also due to the drastic drop in revenues from advertising. In fact, in the first nine months of 2020, advertising investments in Italy fell by 15.9% on all media compared to the same period of the previous year. In 2021, investments in the Media sector are expected to restart, although much will depend on the evolution of the emergency situation linked to the pandemic.
Players in the Media sector are responding to these challenges by innovating their offer through a continuous expansion of their catalogue with new content and the development of new services.
So what are the priorities on which investments in the Media sector will focus in 2021?
To respond to the challenges dictated by the pandemic context and the general decline in audience monetisation, companies in the Media sector are concentrating their investments in certain technological areas. Here are the most important:
Cybersecurity: with the multiplication of cyberattacks during the pandemic and the growing importance of the digital channel in people’s habits of content use, cybersecurity is a priority for media companies, as they are increasingly exposed to the loss or counterfeiting of their data and to potential attacks aimed at causing service interruptions. Furthermore, the lockdown period has caused the phenomenon of online piracy to re-explode, particularly in the consumption of video content: it is estimated that Italian users who use illegal IPTV services to watch sports content are at least 5 million. In addition to fighting piracy, companies in the Media sector must also deal with the phenomenon of fake news and guarantee their users the reliability of the content and information conveyed.
Data Intelligence and Big Data: data plays an increasingly strategic role within the Media sector to make effective decisions and support strategy planning. By now, all companies in the sector have embarked on a path to become a data-driven company: this will result in an increase in investments in advanced data analysis technologies, data lakes, artificial intelligence and machine learning to support customer profiling, customer engagement, advertising, loyalty and customer care.
Cloud Computing: sector operators have been making investments in cloud technologies for several years, driven by a prevailing goal of cost-efficiency. Cloud platforms are becoming increasingly important for the delivery of video content and services via web and mobile – especially in web streaming mode – as they allow the capacity of the technological infrastructure to be dynamically and automatically adapted according to the number of users, guaranteeing an optimal user experience.
Blockchain: this technology is finding an important space within the Media sector in the management of copyright and intellectual property, with the aim of protecting and guaranteeing the authenticity of content. Even in the context of the identification of fake news, some operators are already experimenting with solutions for the traceability of the origin of the contents published on their properties. The European regulatory framework on copyright is constantly evolving, but it is certain that blockchain technology, and its ability to uniquely highlight each step of the supply chain, can represent, in perspective, an effective solution to guarantee transparency and authenticity to the end user.
In the near future, innovation at all levels will be crucial for companies in the media sector to achieve the “new normal” and survive in a hyper-competitive and fragmented market. NTT DATA acts as a partner of Media companies in 360-degree digital innovation projects, thanks to a mix of skills capable of supporting the customer not only in the technological realisation of a product or service, but also in the conception and development phase.
