Josh Arensberg elected new Chair of the IABM Members’ Board
Josh Arensberg was elected Chair of the IABM Members’ Board in July this year. We asked him to share his vision for where he sees IABM – and our industry – heading.
To my colleagues at IABM:
As incoming Chair, I join you at what may be the most dynamic time in the history of our industry. The BBC, the largest broadcaster in the UK and one of the most recognizable media brands in the world, has alluded to the end of broadcasting over the air. Content will soon be delivered via interactive frameworks, like the Unreal Engine and the Unity Engine, built by game developers. And, as we all know, the direct-to-consumer model upended our industry from operators to programmers to consumers.
These changes aren’t cosmetic or nominal; they’re seismic, creating new markets, new supply chains, and new business models – and dismantling old ones. They fundamentally alter how we do business. The stakes are high, which means the opportunities are great, but so are the consequences. We either adapt and thrive, or we fail. But we can’t just react. We must anticipate. Remember: all predictive models are based on historical data. To read the tea leaves, we have to look back. To make the right calls, we have to take stock, and plan advancement to move forward.
Changing Supply Chains
The pandemic stress-tested the global supply chain in a way not seen since the first industrial Revolution, and today we are at the Fourth. For decades, logistics and order fulfillment optimized by creating massive distribution hubs, and manufacturers cut costs by sourcing more economical parts and materials from far-flung countries and adding just-in-time inventory to both manufacturing and distribution. The system worked efficiently for years, but the pandemic revealed the fault lines in a supply chain that was stretched too far and too thin or had unpredictable timelines. When demand shifted and industries shut down, the consequences on the supply chain cascaded, causing a massive worldwide backlog. The economy reopened, but residual effects remain.
Manufacturers began rethinking how they structure their factories, favoring smaller ones they could maintain closer to customers, and reassessing how they sourced parts. In some cases, they even reconsidered whether some physical products were even viable in this new environment. In some instances, physical goods were replaced by cloud services.
Many of these changes were brought out by the pandemic and the requirements of a remote workforce, but a lot of it had been percolating for years, driven by technology change and migration of consumer demand and consumption. Adapting to a constantly accelerating demand curve coupled with an evolving supply chain puts undue pressure on manufacturers. All of which is to say that the organizations that win will be the ones that have relevant, timely market intelligence. They’ll be the ones to adapt quickly enough to thrive in a difficult environment.
The IABM is in a position to deliver on that intelligence. The organization, drawing from the vast, shared knowledge and data of its members, has an unparalleled ability to predict market fluctuations through research, customer roundtables, and analytics. We have a team dedicated to gleaning these insights – insights that can help you plan your inventory, your production cycle, your budget, and so on. These insights will give you a competitive advantage or at the very least, predictable survivability.
Legacy Knowledge and Tomorrow’s Talent
Workforces were completely restructured during the pandemic. Through acquisitions, mergers and layoffs, the industry experienced a talent exodus, resulting in a labor shortage and a skills gap. This shortage intersects with other challenges the industry is facing. A media technologist today, for instance, can no longer physically touch equipment, which now largely exists in virtual environments. There’s no jury-rigging or physical hacks. They have to do a lot more without the benefit of duct tape.
Some organizations aren’t pivoting to virtualized environments fast enough. When technology has to be replaced, a baseline understanding of existing systems and processes must exist to execute a successful transition that maximizes the effectiveness of the new systems while minimizing any transitional woes. You have to know where you’ve been to get where you want to go.
While harnessing that legacy knowledge, we must also invest in new talent and new ideas, which have always been the lifeblood of our industry. If we cannot recruit the best and the brightest, we will fail. Cultivating this next wave of talent won’t happen overnight. It requires a long-term plan that includes training, workshops, job fairs and winning the minds of the incoming generation of talent. We need to reach students and professionals early in their careers. We have to show longevity and sustainability within our industry to develop careers and talent. For those dividends to pay later, we must start investing now.
Environmental Factors in Flux
Environmental factors influencing cost structures are still fluctuating, all of which are driven by multiple forces that change operational costs rapidly: interest rates, access to capital, security costs, liability issues, regulatory impact and geopolitical forces. All of these factors have varying degrees of impact, but in order to succeed, we must anticipate and address those factors quickly.
The IABM needs to leverage our relationships and resources to cooperate with members on issues that affect you all. We can organize efforts and educate the financial community in order to achieve a playing field that individual members may not accomplish on their own.
Changing Business Models
We all know that direct-to-consumer transformed the industry, but the implications of major disruptions have often been misunderstood. When radio took hold in the U.S., those selling sheet music thought they would disappear, but the opposite took place. When cable television started showing movies, theater owners were convinced movie goers would simply stay home. Instead, the exposure to a growing diversity of films sparked an independent theater movement. When Napster shared music for free, many thought the music industry would crater. Instead, Apple monetized digital music by providing a better service integrated within their product ecosystem.
When a hacker threatened to release the stolen season of Orange is the New Black in 2017, everyone expected Netflix to comply. Instead, Netflix refused, and the hacker released the season ahead of its official release. This might’ve ended badly for another company, but Netflix had such a strong brand affinity with consumers that viewers opted to watch the season on Netflix instead. We can all take cues from Netflix: If you create an experience that can’t be replicated, you always win.
Today, in this age of disintermediation, content owners selling directly to consumers via apps have to do something they never did as wholesalers: deal with the public directly. They have to decide what part of the supply chain they want to own and what must be outsourced. This may present cooperative opportunities for the IABM membership. In this and many other ways, we’re stronger together.
All Shapes and Sizes
Our industry is changing quickly, but how these changes impact your particular business depends on size and business model. A large organization will approach economic fluctuations and labor force issues differently than a startup, for example, and a manufacturer of hard goods contends with different supply chain issues than an online video platform. Ultimately, however, what makes this industry unique is that we’re an interdependent ecosystem of partners. Every vendor within this marketplace owns one piece or another, but no one player controls the entire ecosystem. We thrive only if the whole ecosystem thrives. Ours isn’t a zero-sum game. It’s a rising-tide-lifts-all-boats game.
Our remit as an organization is to be a steward, an advocate, and an invaluable resource for our members, regardless of size and product offering. To support all of you, we aim to understand not only the macro implications but also the individual nuances, which is why we’re building out our data analytics and insights program. One benefit we need to evaluate is increasing access to capital for the industry at large while also helping individual members secure funding. We need to make sure our story is presented accurately to capital markets. We’re also ramping up customer advisory boards, customer engagement and customer events and dinners in a concerted effort to return to a face-to-face model.
The prospects for our industry hinge on two broad factors: acting on good intelligence, and people. In other words, if we listen to the data and to each other, we can forge paths that we wouldn’t have thought possible just a few years ago.
Chair of the Board of Directors
- Business Models
- Supply Chain
- Digital Transformation
- Sustainability & Inclusion
- Human Capital