MIT-fit-for-the-future-final

Foreword
If you showed a publisher
or broadcaster from twenty
years ago today’s media
market, to say they’d
be shocked would be an
understatement.
2 COGNIZANT September 2012
If you took a publisher or a broadcaster from twenty years ago and dropped
them into today’s media environment, it would be an understatement to
say they’d be shocked by how the market has changed. While on the
surface there are many continuities, look a little deeper and the channels,
revenue models, technologies, partners, behaviours and platforms have
shifted to become totally and unexpectedly different.
The world’s biggest bookseller is also a publisher… and
sells everything from shoes and groceries to business IT
services. And yet it is only just getting around to opening
its first brick-and-mortar store.
A company known for making PCs is now the world’s biggest
music and video seller. Its catalogue includes 28 million
songs and millions of films and TV shows, but there’s not a
single CD or DVD on its shelves.
The video game industry is forecast to hit revenue of $70 billion by
2015 1 , bringing it almost on a par with the book trade’s current revenue 2
— in-game advertising will add $2.67 billion to that by 2017, plus more
for in-game purchases and cross-media tie-ins. Game publisher Valve
is even employing professional economists to manage the growth of its
“virtual economies”. 3
If you run a media business — publishing house, film studio, newspaper,
music label, TV station, distributor or retailer — how do you respond to
such large-scale disruption? That’s the question we set out to answer.
This paper is a summary of rigorous in-depth research conducted by
Gregory Gimpel and George Westerman at MIT’s Center for Digital
Business in collaboration with Cognizant’s Information, Media and
Entertainment consultants. In the following pages we outline seven
strategic principles that organisations like yours can follow to get “fit
for the future”: making brave and often counterintuitive choices to
navigate successfully through the dramatic changes that are reshaping
your industry.
We hope that it gives you some food for thought.
If you’d like to discuss how what we’ve learnt can be applied to your
business, speak to your Cognizant consultant or get in touch with us
direct — you’ll find our contact details at the back of this paper.