As digital media begins to dominate all segments of the IME industry, organizations will need to restructure their revenue and distribution methods, as well as their global strategies and organizational models.

1. • Cognizant 20-20 Insights
Prepping for the New Age of Information
Services, Media and Entertainment
Increased demand for an improved digital user experience is
challenging players industry-wide to reevaluate their existing
organizational models and strategies.
Executive Summary Factors Influencing Industry Trends
With the convergence of technology and media Recognizing and effectively responding to
and the proliferation of new business models, industry trends requires organizational transfor-
information services, media and entertainment mation and complementary partnerships focused
(IME) companies face a host of opportunities on optimizing core competencies. In the near
and challenges. Technological advancements, future, digital media will dominate all segments of
especially increased broadband access, climbing the industry, and media consumption behaviors
tablet use and smartphone penetration rates, will rapidly evolve. In order to develop solutions
are impacting the way content is distributed and flexible enough to address such growth, organi-
consumed. These advancements have significant zations will need to restructure in order to foster
implications, not only for companies’ revenue innovation and improve agility.
and distribution methods but also for their global
strategies and organizational models. Digitization of Media and Rising
Power of Mobility/Internet
Across the industry, decreased demand for tra- Consumers are progressively switching to digital
ditional delivery platforms, such as TVs, DVDs downloads and on-demand consumption of IME
and physical books, and an increased call for an content. The number of U.S. households with
improved user experience, through heightened both broadband connectivity and at least one
access to mobile devices and elevated interac- 3G mobile device has quadrupled in the past
tivity via social media, are challenging industry five years and has increased more than 600%
players to re-evaluate their existing organization- globally.1 The proliferation of new devices and the
al models and strategies. This paper discusses digitization of content will continue to impact the
industry trends and provides recommendations way media is consumed. For example, by 2014,
that will enable companies across the spectrum 33% of all media and entertainment spending will
to position themselves for the industry’s changing be digital, compared with less than 10% a decade
climate. ago.2
cognizant 20-20 insights | april 2012

2. The emergence of 3G and 4G networks, supported networking, which represents not just a profound
by advanced infrastructure and enriched by a behavioral shift but also an illustration of the
growing array of mobile applications, will notably power of shared information and communication.
increase the capacity for data flow. This will For example, the television series Sons of Anarchy
result in an acceleration of mobile advertising and X Factor have successfully integrated social
and also the convergence of online and mobile media sales and marketing approaches into their
applications. Evidence of this trend can be seen products; Sons of Anarchy aired an episode-
in television with the advent synched second-screen application that allowed
The shift toward of Web-enabled TV, which will fans to purchase items directly from specific
be a catalyst for new forms of scenes, and X Factor allowed viewers to vote for
digital media compels content consumption that will contestants and ask questions of judges during
IME companies enable consumers to stream live broadcast through Twitter.
to focus on areas or download content at their Social networking on various platforms, including
convenience.
that can drive mobile devices, is now being embraced by tra-
both efficiency For all types of content ditional media and viewed as complementary
creators, this change will to existing offerings rather than as an alternate
and effectiveness, certainly have an impact medium. Integration between the two enriches
such as strategy on operations and revenue the overall consumer experience but demands
analysis, workflow streams. Thus, the shift toward more agile and dynamic content delivery
digital media compels IME platforms. Mobility and social networking are
redesign, automation companies to focus on areas driving additional demand for access to infor-
of content creation that can drive both efficiency mation and content, which many consumers are
and distribution, and effectiveness, such as willing to pay for, as evidenced by the $3-per-title
strategy analysis, workflow rental offerings by Warner Bros. on Facebook.
and utilization of redesign, automation of
outsourcing and content creation and distri- By enhancing their digital and social media
offerings, content providers are improving
shared services. bution, and utilization of out-
consumer access, boosting the viewing
sourcing and shared services.
experience and creating customer buzz and
Disintermediation of Content Distribution loyalty. In addition, they are finding opportuni-
As digital transformation steers the media ties to create additional revenue streams through
industry into new territories, companies are either a subscription or pay-per-use model.
increasingly engaging their consumers in product
development. Preparing your Organization
for the New Age of IME
While the industry was traditionally built on busi- These evolving trends present IME players with
ness-to-business (B2B) transactions, industry numerous risks and challenges. However, there
players today operate by building relationships is now tremendous opportunity and competi-
directly with consumers in a business-to-custom- tive advantage for organizations that are willing
er (B2C) landscape, as evidenced by initiatives to comprehensively analyze their business and
from content providers to embed social media transform their content creation and delivery
connectors within their content. This trend can capabilities to address new-age needs.
also be seen in the recent purchase of Flixster by
Warner Bros. and the development of applications The following are key recommendations for
from studios (e.g., UltraViolet) and broadcast- performing this analysis. IME businesses that use
ers (e.g., HBO GO and ABC Player), which have these guidelines will ensure their costs, processes
eliminated the barriers that previously existed and organizational structures are ready to
between these companies and consumers. leverage tomorrow’s landscape.
Focus on Social Media and Consumer Experience • Define and analyze core competencies for
Through social media platforms, interactions have your business resources (people and tools):
increased between content creators, distributors Future-proofing an IME company starts with
and consumers, resulting in more customized and a top-to-bottom assessment of the business’s
interactive product development and distribu- core competencies — the areas that are critical
tion. This trend is reflected in the rise of social to the business and provide competitive
advantage. Revisiting which areas are central
cognizant 20-20 insights 2

3. to your business and add the most value to goals and incentives, segregation of depart-
your product or service will drive key decisions, ments and incompatible tools and processes
such as when to acquire, with whom to partner, across the organization.
which areas to outsource and what activities
should be kept in-house.
>> Goals and incentives: Competing report-
ing structures often exist across territories
Identifying non-core tasks allows businesses and departments, which lead to dissimilar
to leverage strategic partnerships in order goals that can hinder
to focus on key capabilities. Moreover, when a streamlined strategic When content
new business models arise and need to be objective and work- providers confuse
supported, organizations can turn to their core flow. Additionally, these
competencies to understand when a “build vs. structures inhibit time-
non-core competencies
buy” model is needed. to-market, create incon- with non-important
sistent branding world- tasks or processes,
When content providers confuse non-core
wide and can cause
competencies with non-important tasks or
process efficiencies
they may overlook
processes, they may overlook areas that
that disrupt business areas that would easily
would easily lend themselves to an outsourced
partner relationships lend themselves to an
or shared service solution. Often, there
(e.g., multiple points of
are processes and tasks within the value
contact for customer
outsourced or shared
chain that are critical to the business but do
support) and incur un- service solution.
not provide a distinguishable competitive
necessary overhead
advantage, such as copy-editing processes for
costs. For example, business partners might
publishing, quality control and metadata tasks
receive the exact same asset file and meta-
for servicing divisions and digital distribution
data from separate territory offices for the
processes for asset delivery, such as ingestion
same content provider. Yet, siloed incentive
and archiving. By looking at these critical
structures can perpetuate inefficiencies.
but non-core activities as an outsourced or
The incentives given to
shared-service opportunity, content providers
resources in particular When evaluating an
are able to leverage specialized knowledge,
territories should be organization end-to-
standardized tools, repeatable processes and
cohesively aligned to
meet a larger organiza- end, it is important to
consistent methodology, while eliminating
resource redundancies.
tional goal. look for opportunities
Additionally, leveraging partnerships for non-
In addition to differing to unify and
core activities allows organizations to reallo-
goals and incentives standardize processes
cate resource time to more strategic, poten-
across global terri-
tories, there are also across business units
tially revenue-generating tasks. For example,
to address the plethora of new business
cases of misalignment and territories.
models facing the industry, companies can
across windows, which
create innovation departments, or matrixed
have historically led to cannibalization
organizational groups focused on innovation,
(theatrical vs. home entertainment) or inflex-
which support prototyping and implementing
ibility of release windows (print vs. electronic
new services/products and drive thought lead-
publishing). Understanding the motivations
ership throughout the company. This struc-
of these departments and those who lead
ture provides direct oversight of new business
them will often uncover the causes and solu-
models, as opposed to cross-departmental
tions for fragmented departments within an
task forces, which may inefficiently spread
organization.
work across various departments without true
focus and accountability. >> Organization structure: Recently, there
has been an increase in the centralization
• Develop a unified and global organizational and collapse of departments across content
structure: When evaluating an organization
providers, such as combining sales and mar-
end-to-end, it is important to look for oppor-
keting into one consumer productions divi-
tunities to unify and standardize processes
sion; combining domestic and international
across business units and territories. Spe-
sourcing; bringing home entertainment, digi-
cifically, a disjointed global workflow is often
tal and TV under the same leadership, etc.
caused by several factors, including differing
Another trend is to modify the way products
cognizant 20-20 insights 3

4. are developed, such as publishing companies over from the physical distribution model,
organizing by customer segment rather than since there was greater dependency on tech-
product segment. The ability to restructure nologies and formats of the local market.
these areas is dependent on the following However, the growth of digital distribution
key factors: and operations lends itself to the opportuni-
»» Shared strategic objectives: Where can ty to evaluate tools and processes to enable
economies of scale and a flexible workforce.
there be a unified strategy across these
For example, studios should consider the
organizations? Can similar assets and pro-
user of a single digital asset management
cesses be leveraged to reduce effort and
repository for marketing collateral through-
resource duplication?
out the organization to improve asset reuse
»» Geographic dependencies: Are there local and streamline associated processes and re-
relationships, legal parameters, language sources.
requirements and/or time-zone dependen-
cies critical to the organization’s workflow • Build organizational competency around
social media: According to an Experian
that necessitate an international pres-
Simmons report, 98% of online 18- to 24-year-
ence? Is it important to understand con-
olds already use social media each month,
sumer behavior or cultural norms within
as do nearly three in four online seniors and
local territories for product development?
82% of online adults aged 55 to 64.3 This
»» Time to market: Will centralization impact trend has changed the way content providers
the time to market required for product must market and distribute their products.
distribution? Marketing spend is slowly shifting from tradi-
»» Skill requirements: Can the necessary tional avenues, such as billboards, TV, terres-
skills to support the organization be filled trial radio and newspaper ads, to online media
by a centralized structure? and digital initiatives. As digital continues to
become more prevalent, organizations must
The greater the dependency on local markets ensure that their social media strategies are
to drive business decisions, customer leveraged across multiple windows.
support and products, the stronger the need
for a decentralized organization. However, Ready to Implement:
there should be a consistent strategy Three Key Questions
developed across depart- When partnering with our IME clients on imple-
As digital continues to ments that is driven and menting the small- or large-scale organizational
become more prevalent, overseen the digital dis-
example,
centrally. For change required for future success, we have
observed three factors in the implementation
organizations must tribution strategy can be and change management activities that lead to
ensure that their driven by the domestic successful organizational adoption and support:
social media strategies officeresources located
by
and implemented
1. Does the initiative have executive buy-in
are leveraged across worldwide that report and support? A critical factor to successful
multiple windows. directly to the executive organizational change is ensuring the effort
team domestically. has an “owner” and champion to see the
change through, from inception to implemen-
>> Tools and processes: A key opportunity
tation. The individual appointed as champion
for content providers is to consolidate
should lead the committee that will support
processes and technologies that support the
the change and be empowered to make
digital supply chain. For example, many ser-
adjustments and decisions based on feedback
vicing and distribution groups use differing
throughout the process. Some companies have
technologies within and across territories,
created roles such as chief product officer and/
which interrupts the inability to collaborate
or chief content officer as a fundamental way
effectively on operations and distribution.
to drive product strategy and see the organiza-
For example, multiple asset inventory data-
tional vision through to completion.
bases and spreadsheets, requiring numerous
resources to support, are used to collect the 2. What is the business continuity plan? Deter-
same information within the organization. mining a plan for business continuity (i.e.,
Many of these incompatibilities were left keeping your existing business stable during
cognizant 20-20 insights 4

5. the transformation) is an important and tion. Investing in the knowledge and skill set
sometimes overlooked step in the prepara- resources will have an immediate impact on
tion for organizational change. Commonly, a training, recruiting and productivity.
company’s best resources are pulled into the
transformation program, yet their day-to-day Is Content Everything?
operations still need to be maintained. To avoid For companies in the IME space, “content is king,”
over-taxing individuals who will also be respon- but it is not enough to stand out given continuous
sible for implementing change, it’s important industry changes. IME organizations are,
to find the balance at the individual resource therefore, challenged to take advantage of new
level between transformative execution and and varied distribution platforms and strategic
business-as-usual operations. Leveraging stra- partnerships to gain competitive advantage and
tegic partnerships can also help to support this realize organizational and process effectiveness.
balance. Executives must take a close look at their organi-
3. Do the skills of our resources match our zational structure and vision to determine if they
needs? As the organization is remodeled are properly positioned to meet the future needs
to react to current trends, it’s important to of the business.
evaluate skill sets and knowledge acquisi-
Footnotes
1
“Seventy-Three Percent of Global Media and Entertainment CFOs say Digital and Mobile Content are
Greatest Future Revenue Opportunities Despite Current Profit Pressures,” Ernst & Young, June 17,
2010, http://www.ey.com/GL/en/Newsroom/News-releases/Seventy-three-percent-of-global-media-and-
entertainment-CFOs-say-digital-and-mobile-content-are-greatest-future-revenue-opportunities-despite-
current-profit-pressures.
2
“Global Entertainment and Media Outlook: 2010–2014,” PricewaterhouseCoopers, 2011.
3
Social Networking Watch, http://www.socialnetworkingwatch.com/all_social_networking_statistics/.
About the Authors
Candice Lu is a Director in Cognizant Business Consulting’s (CBC) Information Services, Media and
Entertainment (IME) Practice. She has over 10 years of consulting experience in the entertainment
industry, providing expertise to film studios, production companies, broadcasters and music labels.
Candice co-leads the Domain Process sub-practice within CBC’s IME Practice. Before joining Cognizant,
Candice spent four years at Andersen Business Consulting in its Media and Entertainment Practice.
Candice holds an MBA in strategy and entertainment with honors from the University of Southern
California and a B.A. in economics from the University of California, Los Angeles. She can be reached at
Candice.Lu@cognizant.com.
Vanessa Fiola is a Senior Manager in Cognizant Business Consulting’s IME Practice, with six years of
experience in media and entertainment consulting, providing expertise to film studios, broadcasters,
publishers and performing rights organizations. She also co-leads the Domain Process sub-practice
within CBC’s IME Practice. Prior to Cognizant, Vanessa spent nearly 10 years in the high-tech and tele-
communications industries. Vanessa graduated from the University of Missouri with a degree in English.
She is a certified Agile scrum master and has spoken at industry events (Henry Stewart DAM) on the use
of the Agile methodology within media projects. She can be reached at Vanessa.Fiola@cognizant.com.
Karen Mahal is a Manager in Cognizant Business Consulting’s IME Practice, with over five years of
consulting experience in the entertainment industry. She is a member of the Domain Process sub-practice
within CBC’s IME Practice. Karen holds a B.S. in information management and technology from the School
of Information Studies at Syracuse University. She can be reached at Karen.Mahal@cognizant.com.
Krishna Sandeep is a Consultant in Cognizant Business Consulting’s IME Practice, with approximately
three years of business development, market research and consulting experience. Sandeep holds an
MBA from IIFT New Delhi, India. He can be reached at Krishna.Sandeep@cognizant.com.
cognizant 20-20 insights 5

6. About Cognizant Business Consulting & the Information Services,
Media and Entertainment Practice
Cognizant’s Information Services, Media and Entertainment (IME) Practice serves leading global
companies across the film entertainment, TV, music, publishing, information services, broadcasting,
advertising and new media industry segments. Cognizant’s IME practice has significant experience
working with leaders in the industry to enable departmental system, process, cost, and organizational
efficiencies.
With over 3,000 consultants worldwide, Cognizant Business Consulting (CBC) offers high-value
consulting services that improve business performance and operational productivity, lower operational
expenses and enhance overall performance. Clients draw upon our deep industry expertise, program
and change management capabilities and analytical objectivity to help improve business productivity,
drive technology-enabled business transformation and increase shareholder value.
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 137,700 employees as of December 31, 2011, Cognizant is a member of
the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing
and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
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