A new economy is set to emerge for digital media distribution in which global consumers will be willing to divulge their private details in exchange for highly sophisticated customization, but companies will have to earn their customers’ trust first, according to research from Oracle, in partnership with UK-based consultancy The Future Laboratory.
The? “Capitalizing on the Digital Age,” report explores how the digital world is changing consumer behavior and the challenges that it will present for communications and media companies in the future.
The study, which gathered insights from a British panel of industry experts, assessed such influences such as the rise of “freemium” services, the increasing professionalism of the creative consumer, and technological advances such as semantic search and builds a picture of consumers’ media consumption in the next five to 10 years.
Among the phenomena predicted in the study are:
- Contextual branding:? Predictive and geo-spatial software will enable brands to target consumers through contextual branding. Current advertising formats and models will become increasingly redundant.
- “Supertising:” As multiple screens enable different members of a household to watch diverse content at the same time, ad profiling will be tailored to the individual.
- Emotional profiling: Emotional engagement and depth of connection will replace eyeballs as the dominant media trading currency.
- Privacy for sale: Consumers will realize how important their personal data is to companies wishing to provide them with tailored, immersive entertainment.
- Recommendation culture: In the digital future, tuning into a particular TV channel will be replaced by a service that enables viewers to navigate choices and recommends options based on preferences.
- Digitally augmented reality:? Video visors and ultimately contact lenses will digitally enhance everyday life into a three-dimensional, wrap-around immersive experience.
Tackling the Market
In addition to predicting the above trends, the report also offered suggestions for communications and media companies to take advantage of these future opportunities.? Examples of such recommendations:
- Build and maintain customer trust: Trust will be the most important aspect of a brand, the key to gaining access to more profitable relationships with customers and competitive differentiation.
- Become the recommender: The company that consumers turn to when navigating a bewildering sea of choice will be well-positioned to profit.
- Establish smarter billing systems: Communications and media companies will need to adapt to changing revenue models and cater to micropayments and revenue-sharing models for third-party partnerships.
- Leverage valuable customer data:? With the ability to know more about consumers – including where they are, what they spend money on, and what content or applications they download – communications and media companies have an inherent advantage for tailoring future immersive experiences to the individual.
“A new digital economy is being forged – value will lie in having access to customers’ habits and desires. In exchange for this, companies will offer help to navigate the vast sea of digital choices,” said Tom Savigar, strategy and insight director at The Future Laboratory. “The only way to pull any of this off, though, is by gaining trust.”
About the study: Drawing on a panel of global experts – including Martin Lindstrom, author of “Buyology;” Hugh Garry from BBC Radio 1 Interactive and Anders Sandberg from the Future of Humanity Institute at the University of Oxford – the study explored how current and emerging social, cultural, economic and technological forces would impact the future business models of communications and media companies.