Harnessing the Power of Revenue Optimization for Sustainable Growth in Media & Entertainment
There has been no shortage of revenue challenges facing the media and entertainment (M&E) industry in 2023. As companies struggle to boost their revenue while finding ways to reduce costs, it has become crucial that they explore new ways to evolve and optimize their revenue streams — that is, they must focus on RevOps.
Five of the most common challenges that top M&E players face include:
- Increasing Prices: With rising costs of programming and content production comes higher subscription costs — and unhappy consumers who are less willing to spend.
- Fiercer Competition: The industry has witnessed multiple new entrants, as well as the merging of existing content providers (e.g., Discovery-Warner, Amazon Studios-MGM), leading to an increase in competition.
- Identity Crisis: The lack of key content and customer experience differentiators makes it even more challenging for M&E companies to stand out from their competitors.
- The Balancing Act: Struggling to balance licensing of content to other distributors versus maintaining exclusivity on their streaming platforms leads to businesses being unsure if they’re making the most cost-effective decisions.
- Fragmented Customer Service: There is an absence of a unified approach to address customer retention and growth across various teams, leading to duplication or conflicting efforts within the company.
Some organizations may hear the term RevOps and think of it as revenue operations, but it’s more than just keeping your operations running. It’s about focusing on revenue optimization. Fans and customers continue to spend on media and entertainment, but M&E companies must ensure that they provide compelling offerings to keep them engaged. This requires a holistic approach focused on customer growth and retention — the core principles of RevOps. The challenge lies in implementing these principles at scale.
In this blog, we will explore how RevOps can help businesses address these challenges by focusing on optimizing operations, customer growth and retention.
Retain Your Customers
One of the most important things M&E companies can do to optimize their revenues is to focus on keeping the customers they already have. In other words, keep your happy people happy. Specifically, M&E companies should be focused on the following three things:
- Reduce customer churn
By understanding customer preferences and analyzing real-time data points, M&E companies can continuously improve services and enhance their entertainment experiences.
- Increase customer loyalty
Understanding their customers and the billions of real-time data points gives M&E companies the opportunity to personalize their entertainment experiences, thereby increasing loyalty (and reducing churn). Using AI/ML models to assist with content planning and recommendation engines, M&E companies can serve personalized content to the right audience at the right time.
- Transform service and product experiences
Keep happy people — well, happy. Ensure that your current clients keep finding value in your current offerings and innovate as necessary, so they can continue to enjoy the platform's content and offerings in the long term.
Grow Your Customer Base
You want to keep the customers you have but, at the same time, it’s vital to continuously attract new audiences. There are three critical ingredients to growing your customer base in the M&E sector:
- Optimize Existing Revenue Streams
Most consumers have more than one streaming service that they subscribe to nowadays and there are constantly more providers that are coming to market. With many traditional content providers merging, this opens the opportunity for more cross-selling and service bundling — whether bundling access to various digital streaming platforms under a single subscription or pairing streaming subscription services with other commodity services (e.g. internet/tv) to allow for ad-supported subscription models.
- Find Your Audience
Improve marketing excellence by targeting the right demographics, creating persuasive promotions and employing effective communication strategies.
- Open Up New Lines of Revenue
Diversify into new revenue streams, exploring innovative opportunities that align with emerging market trends and customer preferences.
Optimize Your Operations
In an increasingly challenging landscape for M&E companies, it's essential to evolve and optimize revenue streams proactively. RevOps means not only implementing customer retention and growth strategies, but also leveraging technology, optimizing existing revenue streams and diversifying into new opportunities. Taken together, these strategies can ensure M&E companies survive and thrive in this dynamic industry.