IBM offers SA media, entertainment industry cost-cutting solutions

IBM has devised strategic information technology (IT) solutions to extricate media and entertainment companies from the trap into which the entertainment-specific technology they use to create, store and distribute content has forced them.

According to IBM Business Consulting Services` Werner Lindemann, South African media and entertainment companies, like their international counterparts, are struggling to control costs, achieve or retain profitability, and deliver innovative products and services to ever-demanding customers whose increasingly fickle tastes are harder than ever to predict or satisfy.

"There`s a belief that because you already have the content, you must distribute it all on every available device to every audience. So, you end up trying to be an Internet service provider, a broadcaster, a publisher and a portal all rolled into one.

"Naturally, that`s inefficient. And because it`s more about amassing technology than enhancing content, you begin to lose your corporate personality and therefore your audience.

"In the battle for eyeballs you have to focus more on consolidation than proliferation of technology and on re-use rather than re-creation of content."

Working with IBM`s media and entertainment specialist consultants, IBM`s Institute for Business Value has identified technology-based solutions that will help customers extract profit from what is known as the consumer`s 30-hour day.

"Because you have multiple device options - like surfing the Web, keeping an eye on the cricket, and listening to the radio at the same time - you can pack 30 hours of entertainment into a 24-hour day," Lindemann says.

To grab and hold audiences for any financially significant part of those 30 hours, IBM recommends becoming on-demand businesses.

"That means more than just carrying the latest news. You have to become responsive to audience shifts - by using IT to intelligently aggregate your content and audience behaviour patterns.

"Focus on those of your competencies that will provide differentiation. Decide, based on return on investment on those competencies, which channels to use for distribution.

"Keep yourself variable. Adopt a shared service approach, whereby your channels can share a single back-office and a single content archive. That way you can optimise your content at minimal cost.

"Integrate your customer-facing operations. Why have separate sales and marketing divisions for different channels? With technology doing the grunt work, you needn`t lose brand equity by using the same people to market different stations or publications. Also, cross-platform advertising and marketing initiatives bring enormous savings.

"Integrate your content management. Decide what is re-usable, start digitising it, and combine text and pictures to get both online and visual content.

"Think out of the box about new revenues. Don`t go first for a huge money-spinner. Choose options that require a small investment of money and effort and use them to fund the big projects.

"And, when it comes to buying IT solutions, work out upfront how they fit in with the business you want to run. Is a digital content system essential right now? Might it not be better to first integrate a few less glamorous systems - like your customer-facing and billing systems - so that you can drive down costs?"

IBM recommends a three-phase approach to transforming a conventional media and entertainment organisation into an on-demand business. Short-term effort should go into reducing costs, integrating operations and optimising the organisation`s offerings. The medium-term focus should be on driving direct consumer relationships and developing new revenue models. The long-term focus should be on how best to use technology to achieve the ideal of an integrated media platform environment.