Telecom, media and entertainment industries are crossing paths with increasing regularity in hopes of seeking a fruitful partnership. Navigating the increasingly connected, ever-changing wireless ecosystem is not for the faint of heart. Inking the deal is just the first step. Integrating technologies, teams and operating cultures are what can really make or break the customer experience and thus profits.

Comcast made a big bet on content when they purchased the remaining half of NBCUniversal from GE in 2013. They recently took it a step further with their DreamWorks purchase in April of this year. The move helps to improve the “long tail” of their content through amusement park and product revenues. Conquering content, Comcast is now signaling a move into wireless as an official bidder for the spectrum the FCC is auctioning off. Comcast stands to make significant gains into being the one-stop-shop to be reckoned with for consumer broadband, mobile and entertainment needs.

T-Mobile and Sprint entered a partnership with Google for Project Fi, a network of networks that allows access to multiple carriers for wi-fi when traveling around the neighborhood, country or globe, that would improve connectivity as you moved about during your day. In theory, and practice really, this is a great concept and one that Google seemingly could strong arm singlehandedly. However, the Nexus phone is lacking in customer love and use making this partnership a bit flat out of the gate. Time will tell if Google’s deep pockets and T-Mobile’s flair for disruption can make Project Fi work to their advantage.

Verizon is making usage deals with Comcast while buying up fledgling AOL and Yahoo to potentially compete with Google and Facebook on the online and mobile ad sales front as well as add content to their own fledgling Go90 mobile video platform. It remains to be seen if Verizon can improve the video customer experience enough to leverage their new online ad capabilities.

Finally, entertainment company Lionsgate is setting the stage to boost the Starz’ subscription channel with its own content. A huge risk by some estimates as Starz’ sits well behind HBO, Netflix and other SVODs; a brilliant move according to others who see potential for a vertically integrated entertainment powerhouse. For Starz subscribers addicted to the likes of Outlander or The Girlfriend Experience, they are likely to see improved content options.

The horizon for multichannel communication and entertainment is exciting if complex. Building on the tools a company has with the mined remnants of past and future greats will be the chessboard upon which the industry plays for the next many years. May the company that can make customers the happiest, the most loyal reach check mate.

Organizations are missing a valuable opportunity if mid-year planning only considers a budget or project review for the rest of the year. Asking “How are we doing against what we said we wanted to do?”, is necessary, but not enough for a well-run, forward-thinking organization.  Now is the time for company leaders to review their 2016 strategy and reposition for 2017 and 2018. Think of this as a shift from a dashboard approach to a focus on the business horizon.

2016 and Beyond Plans Defined

We help clients in healthcare and media, telecom and entertainment (MTE) shift their mid-year thinking using our SYNAPTIC strategy method, which considers both the plan in place and future factors. 

First, determine if 2017 and 2018 plans are well-defined and clearly communicated. Review and evaluate existing and future strategy across several dimensions:

• Landscape – Where will the company or department be active?
• Vehicles – How will goals be reached?
• Differentiators – How will the company or department win and standout from the competition?
• Roadmap – What will be the sequence of events?
• Economics – What are the level of returns and how will they be obtained?

Next, review the strategy against current and future risks and opportunities. This is where a more forward-looking approach is required because external factors are forcing organizations to (re)evaluate strategy and make course corrections. 

Industry Examples

Healthcare

In the healthcare domain, anticipating and adjusting for market and regulatory changes is necessary for success. Here are three shifts currently taking place across this industry.

• Uncertainty around meaningful use.

Early this year, CMS (Centers for Medicare and Medicaid Services) proposed that the meaningful use program be replaced with a Merit-based Incentive Payment System (MIPS) and introduced Advancing Care Information, which is “designed to simplify requirements, support patient care, and be flexible to meet the needs of physician practices”. Healthcare organizations will need to be strategic about how they leverage technology across changing reporting requirements, patient engagement and continuum of care to help achieve high-quality care outcomes.

• Value-based contracts.
  Revenues from value-based contracts are expected to rise even while healthcare organizations are facing continued pressure on their margins.  How will the organization measure quality, profit from this trend, and avoid penalties?
   
• Consumerism and the shift from B2B to B2C model.
  This trend is a remarkable shift in the marketplace once dominated by B2B.  Key to 2017/18 planning is hyper-targeting the right consumers and providing an excellent customer experience.  Technical platforms and business models including sales and marketing may have to change to meet this transformation.

Media, Telecom and Entertainment

This is another industry where tectonic changes are affecting strategy.

• B2B becoming a key growth segment.
  Multiple Service Operators (MSOs) such as New Charter (Charter/Time Warner Cable), Comcast and AT&T are experiencing a shift in the opposite direction from healthcare. The consumer marketplace is saturated and commercial clients represent the growth opportunity.  This requires organizations to consider how to exploit the commercial market and solidify its position with consumers.
   
• FCC ruling on set-top boxes.
  Even though the current ruling favors net neutrality, it will be several months—and appeals—before it’s finalized or overturned. MSOs already face greater competition from Alphabet, Apple, Google, and Amazon. These new competitive threats have to be factored into 2017/18 strategic plans and will be influenced by alternative devices and over-the-top (OTT) competitors.
   
• OTT competition.
  While content will still be king, profitable delivery of content when and where consumers want it is where the battle wages. Companies need to implement business models that take advantage of OTT services and monetize consumer data. Global subscription spending on Netflix and other subscription-video-on-demand (SVOD) services grew by 33.8 percent in 2014 and 32.3 percent in 2015 — that’s 77 percent in two years. MSOs will need to figure out how to stay relevant, and content providers will need to innovate their distribution models while updating their technical position.  Back office technologies cannot be overlooked at this time. Many billing systems, for example, are not robust enough to meet these challenges.

A Call to Action

CFOs and CIOs need to plan at least 18 months out to remain relevant, engaged, and nimble enough to ensure projects are aligned with evolving strategies. Starting now, before the 2017 budget cycle begins, consider these steps:

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• Engage business partners to understand their shifting and future needs. Abandon projects that don’t move the needle for the business, prioritize existing or new projects that do.
• Engage the ecosystem.  Look outside the organization to help predict and understand trends to create an informed strategy for the future.
• Outline the economics and develop a compelling business case considering these two key factors:

• IT Investment review: Is spending by area aligned properly? Can dollars be saved and shifted to higher-use investments?
• Workforce planning: Talent is at a premium. Don’t sacrifice a strategic initiative based on a misguided belief it has to be done in-house.  Successful sourcing programs can be implemented to shore-up strategic as well as commodity efforts.

Planning and reevaluating strategy 12-24 months out will serve the organization well into the future. It allows time to build the nimbleness needed to meet the demands of the company and, most importantly, customers.

We found it interesting that Comcast was singled out by six senators in Washington for billing customers the rental fee for their modem after the modem had been returned. Comcast acknowledged issues in their customer service and called out a focus on their billing systems to avoid such mistakes in the future.
 
We often find our cable and telecom clients knee deep in a layered and complex billing system that does them no favors on the customer service front. This complexity significantly increases the probability of a business process breakdown or a programming error with ramifications like Comcast is experiencing via bad press and increased Federal scrutiny.
 
Billing isn’t sexy. In fact, it’s often monolithic, causing investment in billing improvements to be deferred by the the industry as a whole. This is actually the mistake. Modern architectures, implementation techniques and service provider engagement models can create an opportunity for new service offerings, monetization options and improved customer experience.