Time

Ente

rpri

se V

alue

TraditionalBusiness

TRANSFORMTHE CORE

YOU AREHERE

BUILDTHE NEW

WISEPIVOT

GROW THE CORE

NewBusiness

Bringing TV to Life VIII

INNOVATION. APPLIED NOW.Reframing innovation as a competitive advantage in Video, Advertising and Content

Platforms are expected to outspend traditional networks by 2020 in programming investment

A FRAMEWORK FOR INNOVATION

There’s a long history of innovation in Television, but IP creates new urgency. Around the world, investors are seeing the chilling effects of platform-enabled consumption on the health of established video businesses:

levels of churn among pay-TV

subscribers

ELEVATED FLAT TO LOW growth in traditional television advertising

revenues in some markets

SLOW BUT STEADY move of major

platforms into rights acquisition, where fierce competition had always been

within an established inner circle

Original content volume is growing at CAGR of 12% per year# of Originals 2011 v. 2016, # of shows

Basic Cable Broadcast Pay CableOnline services

111

181

33 36

116145

693

2011Total: 266

2016Total: 455

INNOVATION IS THE KEY.Investors are placing less value on innovation in established businesses, and significantly more oninnovation in “The New”.

Source: company financials. Accenture analysis.

12x

10x

8x

6x

4x

2x

2012 2013 2014 2015 2016 2017

OperatorsAmazon, Facebook, Google BroadcastersNetflix

Premium on Invested CapitalFactor based on Enterprise Value / Invested Capital

Innovation drives future business value and should never be taken for granted.

Video businesses need to unshackle themselves from traditional processes, architectures and cultures and reinvent their functional, organizational models to drive continuous transformation.

The S-Curve model helps you manage three waves of innovation: transforming the core, growing the core and building the new.

For Content Creators & Broadcasters: integrated multi-channel content experiences, supply chain projects supporting intelligent content distribution, curation, direct marketing and ad- or content-optimizationFor Operators & CSPs: e.g. transforming the technology and operating model, focusing on data as the most valuable asset. Embedding products in the digital routine of consumers, providing platforms & enterprise servicesFor Platforms: e.g. Core innovation projects are ones that bring new types of data back from customer engagement – data that sparks new products and services

TRANSFORMING THE CORE to drive efficiencies, and growing it, often requires ITERATIVE INNOVATION TECHNIQUES, e.g.

For Content Creators & Broadcasters: e.g. global exclusive D2C propositions, or changes that significantly affect value chain position. eg: digital aggregation models through acquisition, or partnerships – with content the seedFor Operators & CSPs: e.g. platform thinking and the industry ecosystem. Exploring business models in new horizontal markets using the data you already have. Existing control points with consumers will help.For Platforms: e.g; significant and continual reshaping of the organization around its customer relationship and data: its leadership, culture, capabilities and relationships with adjacent ecosystem players

BUILDING THE NEW

by incubating disruptive ideas requires a BROADER AND BRAVER INNOVATION APPROACH, e.g.

Source: SNL Kagan, Accenture Research, FX

Our innovation framework gives specific insights and recommends pragmatic approaches in five business areas

Copyright © 2018 Accenture. All rights reserved.Accenture, its logo, and High Performance. Delivered. are trademarks of Accenture.

Visit us at www.Accenture.com/TV2LifeCopyright © 2018 Accenture. All rights reserved.Accenture, its logo, and High Performance. Delivered. are trademarks of Accenture.

More articles will be published soon on innovation across these areas.

Design products that generate monetizable dataIntegrate new technologies to create new experiences and create loyaltyEstablish trust and transparency with users

PRODUCT

Integrate tightly through cross-disciplinary scrumsFlexible, agile platform architecture Balance agility with financial control Create decoupling layers

ENGINEERING

Instill “Test and Learn” culture Embrace new ways of working- R&D & Innovation Hub, Industrialisation Factory

OPERATING COMMERCIAL

Widen product portfolio Think differently about your strategic assetsExplore new low-risk initiatives Partnerships for new revenues & efficiencies

Generate low-risk additional revenue through ecosystemMake the most of your customer reach Expand into new industriesPartner rapidly and easily

ECOSYSTEM