mobile devicesAccess to digital media across multiple platforms – be it video, music, games or books – is prompting a shift from traditional buy-to-own to individual rental models, a trend with broad and deep ramifications for content producers and other participants across the physical and digital media value chains, according to a study from Bain & Co. released November 13.

Adding to this shift, rapid and widespread uptake of smartphones and tablets is also prompting changes in the way consumers discover digital content, according to Bain & Co.’s, “The Age of Curation: From Abundance to Discovery,” results of which are to be presented on November 21 at the 2013 Forum D’Avignon.

Among the study’s key findings:

  • Smartphone ownership in developed markets (the U.S., U.K., France and Germany) jumped from 49 percent on average in 2012 to 64 percent in 2013; while increasing from 24 percent to 37 percent in developing BRIC markets (Brazil, Russia, India and China)
  • Tablet ownership rose from 18 percent on average in 2012 to 39 percent in 2013 in developed markets; while increasing from 13 percent in 2012 in developing markets to 21 percent this year
  • Almost 70 percent of subscribers to online video streaming services in developed markets reported watching more video content today than they did three years ago, and nearly 60 percent of subscribers to streaming music services spend more time listening to music than they did three years ago
  • Multi-device owners consume more video than average device users
    • Approximately 70 percent of multi-device users in developed markets reported that they watch more video than three years ago; while that number drops to 45 percent for average device users
    • Eighty-three percent of multi-device users in developing markets said that they watch more video than three years ago, versus roughly two-thirds of average device users in agreement

“Tablets and smartphones are increasingly the 24/7 gateway for viewing, playing and listening on the go,” commented Laurent Colombani, a partner in Bain & Co.’s media practice and lead author of the study. “Tablets and smartphones are driving a discreet disruption in the lives of millions of users who listen to, watch, read and play content on them.”

Bain market researchers found wide variability between markets and formats among the over 6,000 consumers from Brazil, China, France, Germany, India, Russia, the U.K. and the U.S. surveyed for the study. “Sharp behavioral differences” in online content consumption between those in developed and developing countries were also revealed.

  • In the United Kingdom and the United States, 40 percent or more of consumers have read at least one e-book in the past year. In Germany, the rate declines to just over 25 percent, and in France, to under 20 percent
  • Online video, including short and long-form content, reaches from over 60 percent to nearly 75 percent of consumers
  • Streaming music from services such as Spotify, Google Music, and Pandora has nearly doubled in adoption since 2012. The highest rates are seen in the United States and France (over 40 percent), while adoption in the United Kingdom and Germany lags at 30 percent or under

Over 85% of digital media consumers in developed countries and nearly 70% in BRIC countries use at least one of the major platforms – Amazon, Apple, Google and Sony – to make purchases in all formats.

Rather than relying on critics’ and experts’ opinions, consumers in developed markets increasingly prefer to rely on recommendations from platforms or their social network connections. More than half of consumers now rely on recommendations from other consumers while less than half rely on professional recommendations, Bain & Co. researchers found.

Attitudes toward online privacy also vary widely. Some 2/3 of those surveyed in China and India said they were willing to provide personal data in exchange for personalized music and video recommendations. That dropped to around 50% in the U.S. and U.K., and to less than 1/3 in France and Germany.

Bain & Co. recommends digital media content producers and publishers take action across three main areas in order to ward off platform providers owning “the most direct relationships with consumers”:

  • Investment in original content and gaining a stronger foothold in production: Publishers of all content formats are still in the best position to carry out R&D, content production, audience development and monetization, though platforms such as Netflix are experimenting with their own original content
  • Building scale to maintain a differentiated access to talent and funding: Today, media companies can still rely on traditional audiences to monetize marquee content. As a result, they remain in a unique position to build the intellectual property and content libraries that will generate mass audiences today and tomorrow – including on digital platforms
  • Embracing data analytics to complement editorial approaches: Publishers must invest in acquiring consumer data capabilities and data-driven approaches for existing marketing, programming and creative processes to compete with the platforms that have more direct access to customer data and behavior

“More than ever, winning strategies will be based on quality original content that stands out in an increasingly crowded marketplace,” Colombani articulated. “But they will also require deep, analytical insight into consumer behavior. In Bain’s view, blending these two worlds represents both the biggest challenge and the most promising opportunity media companies are facing today.”

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