The pandemic has brought difficult times for many sectors, but the Communications, Media, 
and Technology world has faced a unique set of challenges. Facing continued downward pressure on revenue, media and entertainment companies are taking a hard look at their business models, and evaluating how they deliver on the needs of an ever-changing customer base. This climate presents a target-rich environment of opportunities for consultants, and we recently caught up with Mike Chapman, who recently joined Kearney as a new Partner and Americas Media Lead in the firm's CMT practice, to talk about the biggest challenges and opportunities.
Consulting: What are some of your top priorities starting out in your new role as Kearney's Americas Media Lead?
Chapman: My top priority is to increase executives' awareness of Kearney's deep capabilities and experience in media and entertainment management consulting, and our commitment to improving the state of the industry for our clients. Kearney has a strong track record in strategic and operational consulting – we are known for developing big-impact strategies and transformations for the world's leading companies, along with a "get things done for the client" orientation. I believe there is an opportunity to build on this heritage and expand on the great work that Kearney has done globally by scaling the practice in a way that helps media clients meet their business objectives.
My second priority is to harness collective thinking across Kearney to proactively develop new ways of thinking about the media industry. and its offerings and operations. There is a great opportunity to shape collaborative propositions in a way that creates greater value for our clients, the firm, and ultimately our people, who are genuinely excited about working in this space. Industry executives that know me well have seen how I constantly challenge the norms and conventions of the media business, and continually push my clients to evolve in a pragmatic manner – in hopes that they can affect the future instead of having it done to them by disruptors and competitors. I plan to do the same with Kearney's media practice.
Consulting: What are some of the biggest challenges clients in the space are facing during these unprecedented times?
Chapman: The media and entertainment industry overall has been highly impacted by the pandemic, yet the degree of impact varies for each sub-sector and specific companies. For example, industry sub-segments such as movie theaters, live events and theme parks have experienced a near total loss of revenue due to being shut down or having their capacity limited. Other businesses such as studios, TV programmers and broadcasters have had challenges producing new content, or there is less availability of premium content such as sports and primetime programming, which typically produces the largest audiences and revenue. Some media companies have seen an increase in time spent by consumers viewing their content, but monetization has suffered, which has resulted in revenue challenges.
These top-line revenue pressures have forced many media companies to evaluate their bottom lines more closely than ever before. The cost structures of legacy media companies remain less efficient than comparable digital companies, despite prior M&A activity and incremental cost reduction initiatives. However, the greatest challenge for media companies is responding to changes in consumer preferences and partner relationships as driven by the pandemic. This includes managing customer experiences and relationships, multiplatform production, distribution & windowing, efficient operations, business models and monetization – and how to operate in this new reality as an integrated enterprise.
Consulting: What are the biggest consulting opportunities you're seeing?
Chapman: I will say that media consulting opportunities have started to shift from purely being focused on reducing costs, and improving cash flows and liquidity in the near term, to rethinking how to grow and operate the business over the long term. Clients are moving away from consulting engagements that delivered near-term solutions for issues that were driven by rapid consumer and economic changes over the past 10 months. They are now starting to think more about what their businesses need to look like based on where the consumer and economy are moving over time, and they are challenging consultants to develop more robust ideas and solutions with longer shelf lives.
I feel that this shift is a good thing for both the media & entertainment industry and consulting firms. Hopefully, clients will have more willingness to consider innovative strategies and transformations that they can execute coming out of the pandemic to increase their competitiveness. This consulting market opportunity is well aligned with Kearney's approach to client engagements– creating lasting change through boldness in thinking, passion for the work that we do in close collaboration with clients, and our commitment to clients' success from an outcomes and commercial perspective.
Consulting: Media companies have obviously faced major disruption with new players in recent years, and of course the pandemic this year. How are consultants helping them weather that?
Chapman: Consultants are serving media companies well during these times by bringing cross-industry perspectives, focused resources and programmatic attention to bear during a time of unparalleled industry turmoil. Engaging a consultant is a prudent decision – the confluence of secular and consumer shifts, competitive disruptions, internal structural moves, leadership & organizational changes, and financial pressures has placed the media executive in a position where he or she could benefit from external support. The consulting industry overall has seen an uptick in engagements with media clients in recent years, and I expect that trend to continue and potentially accelerate as media companies increasingly realize that they can use the help.
Consultants are involved across the board or in specific areas depending on the company – whether it is setting a go-forward strategy, defining initiatives and plans, enhancing the operating model, or executing organizational and technological transformation. I believe that there is a recognition amongst media executives that consultants can deliver significant value when utilized in the right way, and if they are diligent in selecting the right firm for the task – which may lead them to different firms than they have employed in the past. Kearney's media practice will continue to leverage our unique expertise and approach to collaboration, both in the Americas and worldwide.
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