As the entertainment industry has grown more complex and more reliant on deep research, major consulting firms have increasingly become involved with helping networks manage their businesses.
The blue-chip management-consulting firms, which have expertise across a range of industries, see media as a growth engine. Consider: Bain & Co.'s technology, media and telecommunicaions practice is growing at 20% a year. At Boston Consulting, the media and entertainment group has seen a 50% annual rise in recent years. And at PricewaterhouseCoopers, the entertainment and media group has more than doubled its business in the most recent fiscal year.
Consultants are advising networks and studios on technological issues and demographics as programmers seek ways to reach younger viewers who are now bombarded with new viewing options in a multiplatform age.
“Just about every significant content player in the world today—in music, film, television or sports—is looking to find another distribution channel that adds value and creates something that the consumer couldn't get before,” says Greg Douglass, global managing partner of Accenture's media and entertainment group. That's where the consultants come into play.
Starz Entertainment Group (SEG), for example, turned to Accenture when it was trying to organize its new Vongo service that allows customers to download movies over the Internet and view them on any number of platforms, including PCs, laptops, televisions and portable devices.
Seeking to turn the idea into reality, SEG hired Accenture in March 2005 for soup-to-nuts assistance. With expertise in strategy and technology implementation, the management-consulting firm spent the next 10 months laying the groundwork for Vongo's January launch. Accenture's army of consultants performed duties ranging from ensuring that films wouldn't be pirated to building a search engine for the 1,600 movie and video selections to developing the user interface on Vongo.com.
The Starz venture is emblematic of the types of challenges that media companies are increasingly turning to outside consultants for help in navigating through. Changing consumer behavior, new platforms and heightened profit pressures require intense strategic thinking.
“Things are changing so rapidly that you need as many smart brains around you as you can get,” says Michael Kelley, a partner in Pricewaterhouse­Coopers' entertainment and media practice. “We're talking about a lot of uncharted territory. And frankly, that's where consultants tend to excel: helping companies through uncharted territory.”
Besides the global mainstays—most of which offer services in the strategy, operations and technology arenas—media specialty shops are also booming. At Frank N. Magid Associates, a year-old group formed to advise clients on how to program and market to a new generation has been the single biggest new-growth driver in the entertainment division in two decades.
By 2008, the age group sometimes referred to as Generation Y (those between the ages of 9 and 28, also called Millennials) will make up the vast majority of the audience that advertisers and programmers want to reach. Magid's entertainment division launched a unit to advise clients on how best to target the cellphone- obsessed, iPod-loving, social-networking generation. Called the Millennial Strategy Group, its consultants conduct research both online and in person and develop insight into the behaviors and consumption habits of the target group. Clients include NBC, ABC Family and Sony Pictures Television.
“If you're targeting these guys, you have to understand how they think and how they consume,” says Magid Senior VP Jack MacKenzie. “Otherwise, your show or your spot is going to go right past them, and it will never be noticed because it will never be deemed relevant.”
Adds David Mumford, executive VP, planning and operations, at Sony Pictures Television, “In the competitive landscape, everyone wants to get an edge.” Magid is providing Sony insight on how to craft promotions and brand extensions for animated comedy The Boondocks, which it produces for Cartoon Network's Adult Swim block.
From Advisor to Company Exec
Perhaps the greatest example of the elevated influence consultants now enjoy is what happened last fall when MTV Networks sought a No. 2 executive to Chairman/CEO Judy McGrath. Eschewing internal candidates or a successful leader from another media operation, MTVN turned to one of its consultants: Michael Wolf, managing partner of McKinsey & Co.'s global media, entertainment and information practice.
Wolf, the new president/COO, had advised senior executives at MTVN for a decade while at McKinsey and before that at Booz Allen Hamilton—both leading global media consulting operations—on launching channels, growing overseas and adding an animated-film division to the Nickelodeon unit.
After he accepted the job—which encompasses oversight of ad sales, affiliate sales and marketing, business and strategy development, and production operations—Wolf explained that his consultant background made him a prime candidate. “I know this company better than anybody else,” he told B&C last November. “I'm one of the few people who has had a vantage point on every part of this company.”
Wolf's former colleagues are tackling a range of issues that intersect with just about every hot-button topic in the industry. That includes advising clients on how to repurpose content on new platforms while not cannibalizing traditional ones; exploiting content libraries in a digital world; developing new sponsorship models; and learning how to reach young consumers.
And other consultants are doing the same. “We're really wrestling with some of the biggest challenges the industry is facing and working with the senior executives at these large media companies to help them adjust,” says David Sanderson, who heads Bain's global media practice.
At the same time, some consultants are working on more-niche issues. For example, Magid works with stations to improve ratings and audience delivery for their newscasts through “attitudinal” market research. It's also helping them devise strategy for expanding their news content to emerging platforms, advising clients not to simply repurpose content for the Web or wireless devices but to customize to the distribution outlet.
Magid is also spreading out from its traditional base as a consultant to local newscasts. It's working with the NFL's Jacksonville Jaguars, for example, to improve the programming it produces for local television during the football season. The Jaguars produce three half-hour shows a week focusing on the team's performance, coaches and players. The team retained Magid to conduct audience research so it could create more-compelling broadcasts.
While individual teams seek to play a larger role as content providers, the NFL itself is placing an increased focus on its role in that area and has retained IBM's media and entertainment consulting group to improve its capabilities.
The unit is part of IBM's four-year-old consulting business formed by the $3.5 billion acquisition of PricewaterhouseCoopers' PwC Consulting (PricewaterhouseCoopers maintains a separate advisory service).
The acquisition melded IBM's technological expertise with PwC's business savvy. “IBM has a brand that not everybody associates with media and entertainment,” says Steve Abraham, global leader of the practice area. “But we really understand the business and technology challenges companies face going into the digital future. A lot of what we're doing is trying to unlock creative assets to drive value.”
For the NFL, the challenge is to maximize revenues by repurposing its vast library of video footage and audio clips (both from the modern era and its vast archive dating back decades and maintained by the NFL Films division).
The league is aggressively updating its capacity because its three-year-old NFL Network will begin carrying live games this fall. Beyond the games, the network needs programming 24 hours a day, including its signature show NFL Total Access. The NFL also produces shows, such as ESPN's EA Sports NFL Matchup.
But the NFL—which creates more than100 kinds of content daily—had a significant weak spot in its production chain. Its treasure trove of historical footage was hard to access, often forcing production staffers to conduct manual, time-consuming searches through printed game logs or even to scroll through videotape to find specific footage needed to create a package.
IBM helped the NFL create an archiving system that dramatically reduced search-and-retrieval time for production staff, speeding the process of editing pieces for the NFL Network and other league- developed programs tenfold and quadrupling programming output.
IBM performed similar digital content transformations for the BBC and Fox. Despite a weekly worldwide audience of approximately 150 million and broadcasts in 43 languages, the BBC continued to rely on 50-year-old analog technology for capturing and storing audio and video, forcing its production staff to literally splice tape together to create news stories. IBM's new digital system increased production speed to allow more up-to-date content to be produced for the increasingly fast-paced news cycles.
The Future of TV
While consultants work on technical issues and others grapple with changing advertising models, some are trying to gauge the very future of television itself—and there is noteworthy disagreement in the ranks. A recent bombshell report from IBM's Saul Berman declared that “the end of television as we know it” is here—a conclusion derived from the proliferation of viewer choices and consumer hunger for control.
“The tech- and fashion-forward consumer segment will lead us to a world of platform-agnostic content, fluid mobility of media experiences, individualized pricing schemes, and an end to the traditional concept of release windows,” the report said. IBM advises media companies to “take risks today to avoid losing position over the long term.”
The fact that Berman could use such dire language is proof that the roiling entertainment industry is hungry for advice and that its appetite isn't abating. Earlier this month, to keep up with demand and offer a broader array of services, Sucherman Consulting Group —which specializes in advising on internal organization—and Smith­Geiger —with a core competency in audience targeting—formed a strategic alliance.
“Our business has never grown faster,” says David Smith, CEO of SmithGeiger. “Periods of change are always good for research and consulting companies—and we're in a period of change beyond anything that anyone's ever seen in the media industry. When it hits you fast, you need to react, and that's why people typically turn to consultants. You can't wait to get the human resource that has the knowledge inside the building.”