ABC calls in L.E.K. Consulting to support overhaul of TV division

17 May 2016

ABC recently announced a big overhaul of its TV division, following the rapid changes to demand as new technologies and tastes begin to transform the television space. To support the restructure the company has called in L.E.K. Consulting to advise on strategic options, for a fee of $750,000.

The Australian Broadcasting Corporation (ABC) is Australia’s state-owned and funded national public broadcaster. Formed in 1929, ABC has in the intervening years played a key role in the development of Australia’s media landscape.

Similar to other TV and media production firms globally, ABC is facing changing environment. One of the major trends the media house is facing is a change in demand, in particular among the so-called millennial generation. According to a recent report from L.E.K. Consulting, the millennial generation is shifting its interest away from the TV and is in turn much more likely to consume video based content through digital subscription or free online through services such as google – the result is that the market share of TV within the wider media mix has dropped dramatically. 

The Boston Consulting Group (BCG) too recently studied the changing landscape for the traditional television market, finding that new TV subscriptions are trending downwards as new streaming subscription-based video on demand services, such as Netflix, are set to take off among consumers. The consultancy firm also found that the kinds of content in demand are also being transformed by changing consumer behaviours. Exclusive and top-rated programming is becoming much more valuable in terms of viewer numbers, while mid-range filler content is losing out as people balance wider entertainment agendas against other quality propositions. Cult and other nice markets are expected to see a boom from the new behaviour as the related programmes become more widely available. 

ABC calls in LEK Consulting

According to Crikey, an Australian website, the management of ABC has brought in L.E.K. Consulting to support the company with drafting a strategy and restructuring plan, aimed at navigating the company through the changing landscape. The consultants came, according to insiders close to the matter, with a hefty price tag: $750,000. L.E.K. was selected mainly for its expertise in the field – the international consulting firm has a strong track record in the media industry, the consultancy is in addition a regular advisor at ABC — the consultants have, in recent years, among others, looked at a possible merger of ABC and SBS and drafted plans for ABC to boost viewing levels by 10%.

The plan includes an overhaul of the organisational structure of ABC, reshuffling several management positions, which is being rolled out to prepare the organisation for changes to demographics as well as technological developments. The plan further details the aim to focus on high quality, original content production and ensure a “platform-agnostic approach to reaching audiences”.


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