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PwC US finds robust consumer appetite for new sharing economy in media and entertainment
MUMBAI: 57 per cent of American adults declare that access is the new ownership when it comes to the sharing economy, with four in five consumers agreeing that there are sometimes real advantages to renting versus owning. This is according to a new PwC US Consumer Intelligence Series report and research project, The Sharing Economy, which surveyed 1,000 consumers, held conversations with influencers and business executives, and monitored social media chatter to evaluate the new business model’s impact on society and business. PwC spent the past four months examining socio-economic and cultural conditions that have enabled the arrival of new sharing companies and analyzed opportunities for established companies looking to grow under this model, particularly in the technology, entertainment, media and communications (EMC), automotive, retail and consumer goods and hospitality industries.
The EMC industry has been the most disrupted by the sharing movement. By the same token, this industry also has the highest consumer engagement, compared to the other industries in PwC’s study. The intangible nature of many of these goods lends itself well to the sharing of accounts, content streaming and other options that are more suitable for today’s mobile consumer. However, legal and contractual obligations have the potential to create barriers to access, discourage trial and slow innovation, making it difficult to establish formal sharing models at the same speed as other industries.
Digital assets, such as movies, music and games, inherently feel less like possessions than physical ones, so companies should offer relationships and rewards that create greater perceived value.
Piracy and copyright violation are huge concerns for both consumers and producers, with 59 per cent of survey respondents confirming they will not trust sharing economy businesses until they are properly regulated.
The sharing economy has subverted traditional distribution models with the rise of on-demand. Consumers may be willing to pay more for early or immediate access to something, opening the door to a potential collective bargaining model to benefit both consumers and providers.
PwC EMC digital services principal David Clarke said, “The shareables model is changing the way consumers think about value. And it’s no surprise that the sharing economy is also dubbed the ‘access economy’ or the ‘on-demand economy. We’re operating in a society that wants what it wants, at the exact moment it wants it. So, if consumers are willing to pay more to see something earlier and these costs can be mitigated by sharing it with others, then there are potentially large untapped opportunities for a collective bargaining model to benefit both consumers and providers across all EMC categories.”
PwC US entertainment, media and communications leader Deborah Bothun said, “Gaining insights into consumer preferences and securing trust will be crucial to increasing revenue potential. Discerning consumers are factoring friction into the value equation so creating a seamless experience will be an imperative for success. Flawless digital tools, elegantly simple search and smooth transactions are not merely a nice-to-have for companies today – they are a requirement for all players in the sharing economy.”
PwC defines sharing economy as an emergent ecosystem that monetises underutilised assets or forgoes the purchase of those assets altogether, in favour of borrowing, renting or serving up micro-skills in exchange for access or money. It is a system of opportunism built around trust, collaboration, and on-demand goods and services. The rise of social, mobile, analytics and cloud computing have contributed to lowering the entry barriers to the sharing business model, with 19 per cent of the total US adult population having tried the sharing economy firsthand. According to findings, 18-24 year olds are among the most excited adopters of the sharing economy.
Thus far, its impact has been significant. Of the 44 percent of American adults already familiar with the sharing economy, 72 percent can see themselves becoming a consumer in this ecosystem in the next two years. Among the top three potential benefits are:
Attractive costs: 86 per cent of consumers agree that the sharing economy makes life more affordable.
Sense of community: Seventy-eight percent of U.S. adults believe that the sharing economy builds a stronger community.
Alleviates burden And increases convenience: Forty-three percent of consumers expressed that owning today feels like a burden, and 83 percent agree that sharing makes life more convenient and efficient.
To fuel expansion, players in the sharing economy will need to find ways to authenticate the identity of consumers and reassure consumers on their credibility – both in terms of secure transactions and durable, high-quality products. 89 per cent of US adults believe that the sharing economy model is based on trust between providers and users – this will be the foundation to a frictionless sharing transaction.