The Move to Focused Markets
IGNITION 2018 - Day 2 Recap
6th Dec 2018
The Move to Focused Markets
Day one of Ignition had a central theme around the economy. The conversations and interviews were focused on gender, race and pay inequalities, what impact this was having on our ecosystem and what leaders in the tech space were doing to reverse the trend.
With speakers like Hans Vestberg (Verizon), Randy Freer (Hulu), Scott Rosenberg (Roku), Meek Mill (Music Mogul), Curtis “50 Cent” Jackson (Hip Hop Artist, Actor, Entrepreneur), and many others, it was looking like Day two was going to coalesce around media and entertainment discussions and the future of TV. Like media and entertainment itself, there was lots of great content, but the discussions eschewed any singular genre or theme. That said, the latent strategist in me loves to look for patterns and find order in chaos so I’m going to call the central theme: The Move to Focused Markets.
Media and entertainment has forever been the “tree frog” of industries. In the same way that scientists consider frogs sentinels of environmental change, media and entertainment is generally the first industry where you start to see shifts in consumer preferences and behavior. For example, consider the move from an “ownership” economy to the increasingly popular sharing economy. You could argue that this began in music with Napster, where people shared their own music libraries in order to gain access to others. This eventually transitioned to more of a subscription economy that is everywhere from music (Spotify) to travel (Airbnb) to transportation (Uber, Lime).
So, what are the current trends we’re seeing in music and TV? For starters, a noticeable shift toward serving smaller, more focused markets. There’s a bit of a chicken and egg thing going on here in regard to whether media organizations created these markets or if they are just responding to a change in market conditions. Personally, I think it’s the former, but that’s a subject for another day. Either way, let’s look at how new and old companies are responding.
David Levy, CEO of Turner, spoke about how they are refocusing after being acquired by AT&T. The customer data and platforms they now have access to through AT&T is allowing them to be more focused on the advertising front. They are moving away from mass advertising to a model where they will decrease the ad load and focus on serving more contextually relevant and targeted ads to viewers. He calls it focusing on the Three A’s: Audience (relevant advertising content), Addressability (connecting audience with the right content) and Attribution (measuring real impact and outcomes of advertising). David didn’t specify what the ad load might be, but said it will be less than the average 16 minutes per hour people are seeing today. Scott Rosenberg at Roku echoed these sentiments and also noted that they are spending heavily in areas like machine learning to predict the type of content someone will like and improve their search and discovery experience.
The brothers Russo, Joe & Anthony, who co-directed multiple Marvel blockbusters including “Avengers: Infinity War,” are moving out of Hollywood. Their new studio, AGBO, is located in downtown LA and the goal of it is to assemble an artist collective to create content that explores new forms of storytelling. In their assessment, Netflix has changed a lot of the rules around how we tell stories in film. The next generation might not look at the “2-hour narrative” as the predominate or best form of storytelling anymore. The focus on more narrow markets also allows them to be more culturally sensitive, such as their partnership with Wu Jing on the Chinese blockbuster, “Wolf Warrior II.” The $30 million sequel to the original, released only in China, netted $780 million in its first month at the box office.
Even more focused are companies like Blavity and Hello Sunshine, focusing specifically on black millenials and women, respectively. Aaron Samuels, one of the co-founders of Blavity made the point that for many in the black community, “your story is put on you.” One of the driving factors in starting Blavity was to allow black millenials to take control of their own narrative and to give them a chance to capitalize on their sizeable cultural contributions.
Hello Sunshine, the media company founded by Reese Witherspoon, is also focused on changing a narrative. In their case, they want to change the narrative of women through storytelling. Instead of chasing scale and impressions, they are focused on building a loyal and engaged audience who can carry their message forward.
The importance of cultural relevance was echoed by Troy Carter, CEO of Atom Factory, the multi-dimensional branding, entertainment and artist management company. He talked about shifts he has been seeing in global markets. In the past, hip-hop artists with global scale like Jay Z or Kanye West would top billboard charts worldwide. Today, local hip hop artists tend to top the charts in countries from China (Higher Brothers) to France (Booba) to Korea (Jessi). The other super interesting thing about Troy is that he’s famous for having a sneaker in both the music and tech worlds with an office strategically placed between LA and Silicon Valley. Looking forward, he sees lots of promise in the combination of creativity and technology, which is a good place to close.
It’s not clear to me that these “focused markets” are the end game, but more a point along the path to a more interconnected future. Andy Main, Head of Deloitte Digital, made an interesting point, noting the need for multiple different ecosystems to come together and cooperate to support moments in a person’s life. The example he offered was around an auto dealer and ride-share company that come together to support someone whose car is in need of service. This catalyst for this moment might be the service light coming on in a person’s car.
I’d like to carry that sentiment forward and believe that as opposed to us continuing to dive deeper into our own micro-bubbles, we can look for ways to create value through connecting and collaborating across these focused markets. We need more diversity in business and society, not less.