|Issue:||Europe I 2008|
|Title:||Managing Director, Telecom, Media & Entertainment|
Didier Bonnet is the Managing Director for Telecom, Media & Entertainment (TME) for Capgemini globally. Before joining Gemini Consulting, as it was then called, Mr Bonnet was a strategy consultant with the international economic and management-consulting firm Putnam, Hayes & Bartlett, and with Coopers & Lybrand. Mr Bonnet brings over 17 years’ experience in advising international telecommunications and media clients on key strategic and transformational issues. Prior to his current role, Mr Bonnet was Chief Marketing Officer for TME. During his tenure with the firm Mr Bonnet has focused on strategic consulting for international clients in the area of M&A, alliances, market entry, and competitive and industry analyses. He has consulted on issues ranging from strategy to operational implementation and organisation design. Didier Bonnet graduated in economics, gained an MBA from a French business school and a Doctorate in Philosophy from Oxford University.
New technologies, convergence and digitalisation have engendered significant changes in consumer habits. Gaming now accounts for 66 per cent of the growth in media use and interactive Web content for another 30 per cent. User-generated content and social networking are growing rapidly among younger users. Young consumers increasingly seek peer-generated content and rely on peer recommendations for purchase decisions. They consume content in ‘micro-chunks’ – TV clips, sports highlights, user-created short films, or single music tracks that limit advertising impact.
Over the past few decades, the telecom and media sector has undergone dramatic changes as choices available to consumers have multiplied considerably. Consumers’ use of personal digital devices has accelerated in the past few years. Consumers continue to be interested in TV and music, spending nearly 80 per cent of their media time on such activities. However, the growth in media use comes from new types of content, such as: gaming, interactive Web applications, online shopping, user-generated content and social networking. Gaming is the single biggest contributor to the increase in media time over the past five years, accounting for 66 per cent of the growth in media use. The other key growth area, interactive Web content, has contributed to more than 30 per cent of the increase in media use. In particular, user-generated content and social networking are growing rapidly, gaining significant traction among youth. Changing behaviour Telecom and media usage is changing rapidly. To understand where these changes will lead us, it is important to look at the pronounced new patterns of behaviour in 15- to 24- year olds, the first ‘digital natives’ who grew up surrounded by devices. This generation’s behaviour is characterised by four key themes that summarise the new media and communication equation: control, impatience, community interaction and originality. Control – Media consumption is no longer a passive experience, constrained by broadcasting schedules. Young users are actively controlling and deciding how and when they want to consume media, moving away from less flexible platforms, such as linear TV and radio. They increasingly rely on services that allow access to content whenever they want it, such as personal video recorders and Web TV. For example, nearly 38 per cent of youth in the UK now consumes TV content on a PC compared to 24 per cent of all individuals. Impatience – Consumers today are living in a world of hyper-choice and own multiple devices. Multi-tasking between devices is a key trend for all demographic groups and especially for 15- to 24- year-olds. Up to 25 per cent of teenagers’ typical daily media time in the US consists of overlapping media experiences. To maximise the efficiency of their media time, younger users ‘pull’ content through search engines and RSS (Really Simple Syndication) feeds, which ‘feeds’ them only content relevant to them. They also consume content in stripped down, fragmented formats that one could call micro-chunks, such as TV clips, sports highlights, user-created short films, or single music tracks which limit advertising impact – two-thirds of 15- to 24- year-olds in the UK indicate that they largely ignore TV ads. Community Interaction – The influence of the peer group on the younger generation is nothing new. This age group continuously exchanges opinions on what is worth seeing, reading and downloading. Much of the peer conversation about content takes place in the form of blogs, email links and instant messaging (IM) discussions that merge communication and content into ‘conversational content’. For example, blog postings can create a word-of-mouth effect that can propel the popularity of content from a core group of fans to the mainstream in no time. These online community dynamics alter traditional patterns of trust; young consumers have more confidence in peer-generated or ‘crowd-sourced’ content. Online users increasingly rely on peer recommendations to make purchase decisions. In Europe, more than 50 per cent of consumer electronics online buyers have checked product reviews from other customers, and 30 per cent made a purchase on the Internet based on peer reviews. Originality – Young people also want to stand out in their community and be regarded as cool, original, and independent-minded. The Internet allows creative self-expression and a showcase for individuality. The younger generation is especially active in developing creative online identities through personal profiles on social networking sites such as MySpace and Facebook. Over half (55 per cent) of online American teens have created a personal profile on these Websites, and a significant industry is growing to enable users to customise their profiles. Recommendations Against the backdrop of these emerging behaviours of the online youth, many wonder whether these trends are a passing fad or are here to stay. It is likely that the uptake of many of these services is rooted in inherent consumer needs and, as such, they will grow further into the mainstream. The telecom and media space is being reshaped by new consumer behaviour, which will challenge the traditional, static, non-interactive and pre-packaged media experience. This presents several issues for players in the TME (Telecom, Media & Entertainment) industry in terms both of service offerings and marketing. Consumers now have an outlet – online – for their expertise, opinions, reviews, recommendations and creativity, and are playing an increasing role influencing their peers’ consumption. Telecom and media players, therefore, need to redesign their traditional relationships with the consumer. Involve consumers in the creative/development processes – Marketing and R&D activities can be complemented by actively involving consumers who are increasingly interested in giving their opinions and expressing their ideas online. This trend towards greater user participation can be leveraged for product development, where consumers become valuable test beds and an important source of ideas. Consumer-led innovation can help strengthen the ties between customers and brands, because consumers feel empowered by their involvement in the product development process. Recreate source of value to the consumer – The traditional provider/end-user relationship needs revision, as consumers demand more information, participation and control. Time-starved consumers can easily skip advertisements, and brands need to find ways to recreate engagement by adding value to their marketing message. For example, Nintendo created a ‘viral’ videos advertising campaign for their new Wii gaming console. They uploaded the videos on YouTube for everyone to stream, link to and comment on. Over a million people saw the videos on the Web. Players can also create value for users by giving them more control, allowing them to personalise, remix or modify content, thus satisfying their need for creativity and self-expression. For instance, the BBC allows consumers to creatively reuse, free of rights, material from its archives to create mash-ups. Weave strong relationships with online opinion-makers – Consumers increasingly rely on peer groups and on social information Websites to make purchase decisions. It is critical to understand how these decisions are made and to influence them. While control over these peer groups and their consumer/experts is impossible, marketers should aim to build a relationship of trust by providing information transparently and accepting both positive and negative feedback openly. Honda UK, for example, is the first sponsor of 2TalkAbout.com, which lets audiences freely publish their views on well-known brands. Honda engineers and associates regularly contribute and respond to feedback online. This has helped the company to build an active community of customers as well as potential buyers who share experiences. Offer addictive experiences – In today’s choice-filled world, engaging the time-starved and attention-deficient consumer is becoming increasingly difficult. Players need to deliver new and innovative services to capture the consumer’s interest. Understanding what creates an addictive experience will be crucial to win the attention of the increasingly elusive consumer. The growth in time spent on activities like gaming or social networking reveals that consumers have an increasing dependency on these services. In some cases, addiction can be extreme: for instance, users of World of Warcraft, a multiplayer online game, spend an average of 25 hours per week playing. Users can showcase their skills and be rewarded accordingly – in the case of World of Warcraft – or by the number of friends they accumulate in MySpace. These ‘social currencies’ are displayed for everyone to see in the user’s profile. This helps to increase the social status of the holder and to reinforce their addiction to the site, which is exacerbated as users enter the closed elite of ‘most experienced gamers’ or ‘most connected people’. Patterns of addiction are also evident in the mobile world. The mobile phone is the preferred device of the new generation and is the hub of their social life; it keeps them permanently in touch with their community. Other age groups are also showing increasing dependency on their mobiles. In order to sustain this and drive similar patterns for other older age groups, mobile operators, developers and vendors must embed more features that match the needs of older generations, such as home management, banking, healthcare – not simply community, entertainment and communication. Mobile services can generate solid revenues and consumers show a higher willingness to pay on the mobile platform than on the fixed PC-based Internet. Today’s online world is reverberating with consumers’ voices and experiences; people want to be involved in what they consume and how they consume it – as exemplified by the 15- to 24- years age group. The increasing role of digital technology in this group’s leisure time is an indicator of what the medium- and long-term future holds for telecom and media consumers. The developing behaviour patterns and attitudes towards media and communication exhibited by this age group will move into the mainstream as they mature and their digital habits cross the generation gap. Players willing to listen, learn and incorporate consumer insights will be well placed to offer innovative services and gain in the long run.