Bain & Company, in their yearly report “Generation #hashtag ascendant: Think native digital first,” advises entertainment, media, publishing, and service industries to prioritize a “native-digital-first” approach.

They define “Generation #hashtag” as individuals who favor content created and shared solely on digital platforms, especially mobile, regardless of their age. Bain notes that this group, first identified in 2014, now makes up almost half of all media consumers. Surprisingly, younger consumers are increasingly willing to pay for content even with limited budgets and access to pirated alternatives.

Media companies’ success hinges on understanding consumers’ needs and preferences and adopting a “native-digital-first” mindset. This means creating content specifically for digital platforms instead of just repurposing existing content. Bain’s survey of over 7,000 consumers across ten countries revealed that native digital consumption is equally high in emerging and developed markets.

Entertainment is rapidly shifting to digital, with 37% of consumers in emerging markets (like India and China) using digital platforms, up from 24% in 2014. Online news and magazines have reached digital penetration rates of 89% and 65%, respectively, with 30% of readers globally belonging to Generation #hashtag.

Services like real estate, job boards, travel, and sharing platforms (Yelp, Airbnb, Uber) are quickly becoming native-digital-first. Interestingly, while millennials drove the change in entertainment, services see equal adoption across generations. For example, over 30% of those over 35 use native digital real estate platforms compared to 20% of younger consumers.

Florian Hoppe, a partner in Bain’s Media Practice, notes that while Generation #hashtag is nearing a turning point, many media companies haven’t figured out how to make native formats profitable. Balancing user adoption with payment is crucial.

Mobile platforms provide hope for paid content, as mobile users are more likely to pay for native digital content. For example, over 25% of smartphone users pay for digital video content compared to half that number among non-smartphone users. This could explain why younger demographics comfortable accessing media on their smartphones are more open to paid models.

Despite this positive trend, native digital monetization needs to catch up to traditional revenue models. Native digital platforms are vying for global dominance, directly challenging established players. However, bigger isn’t always better, and even successful large platforms are introducing premium content and services to reach their full potential.

Hoppe emphasizes that success in the native digital age requires having multiple monetization strategies and adapting to new payment models. Traditional companies need to embrace native models, and native players can learn from established practices.

To thrive in the native digital era, media companies must improve their capabilities by:

• Rethinking content strategy: Create content tailored to today’s world instead of adapting old formats for new platforms. Successful content is user-influenced, if not user-generated.
• Securing distribution routes: Simply having “good content” is no longer enough. With fragmented audiences, securing the right distribution channels is crucial to ensure content reaches its target audience.
• Embracing new advertising rules: Digital advertising is changing the game. Targeting, engagement, measurability, and ROI are now just as important as reach and affinity for advertisers.
• Earning customer data: In a demand-driven market, understanding consumer behavior is vital. Media companies need to earn consumer trust and incentivize them to share their data willingly.
• Revisiting the M&A toolkit: Digital transformations are rife with failed acquisitions. Traditional media companies need a specific approach to digital M&A, focusing on deal-making and integration. Agility in acquiring and integrating native digital businesses will be essential for companies to thrive in the next digital wave.

Interested?

Watch the video about Generation #hashtag View the infographic about Generation #hashtag