There's something about the new year that instinctively summons most people's inner Carnac the Magnificent, and the folks over at consulting powerhouse Booz & Company are no different. Today they released their top 10 “perspectives” for the media and entertainment industry, essentially key trends they say will shape the strategies undertaken in the year ahead. The advice is not limited to the music industry, but rather the entire entertainment sphere. That said, there is much in the note that applies to the music industry.

“Previously, winners were defined by their strengths in content development, packaging, and distribution - all key for an entertainment world characterized by scarcity. The digital era is characterized by unprecedented levels of consumer choice, ubiquity, and interactivity. To succeed in this more dynamic environment, companies need to acquire and build new skills. They must excel at developing deep audience insights; building consumer relationships across multiple platforms and user environments; creating targeted content, applications, and advertising opportunities; and managing a mix of monetization models across advertising, subscriptions, and commerce.”

Below are excerpts of the 10 trends. The full note can be found here. (PDF).

1. Cost Reduction
Most companies have expended much of their recent cost-related effort on how well they operate. Our view is that they can achieve more substantial cost savings by focusing on what activities they undertake (the mix of initiatives) and how these activities are executed (the workflow). Only through a rigorous examination of these structural and strategic costs will companies be able to replace large legacy operations and achieve more radical models characterized by new processes, smaller workforces, and lower-cost ways of connecting with audiences.

2. Build new digital revenue streams, not just migrate old models to digital
Merely shifting analog content online—whether giving it away via advertising or charging for it—is not likely to work. The vast majority of publishers still face so much competition that paid content alone will not provide an adequate solution to their monetization challenges. In fact, for many players, paid content will likely prove to be a long and winding road to a very small house. Smart companies will focus instead on building new revenue streams rather than just migrating old models to digital.

3. Consolidation
We expect most future media acquisition activity to be concentrated on smaller, more strategic deals. Strong companies will pounce on complementary brands and other assets sold off by vulnerable rivals, along with other target acquisitions that can add important growth-oriented capabilities in technology or services to their portfolios. Private equity will also become more prominent in the deal flow. This ongoing consolidation and portfolio realignment will have three anchors: branded content (especially cable networks, video games, and studios); technology and advertising/marketing services; and digital businesses. We expect smart, strategic buyers to focus primarily on acquiring coherent capabilities, rather than on portfolio diversification or cost synergies.

4. Advertising
The media-as-service trend will intensify in 2010, for several reasons. Most major marketers will want campaigns that can offer more cross-platform integration, feature digital more prominently, and are anchored in greater levels of consumer insight. At the same time, media companies need to drive additional ad-related growth—from legacy sources as well as from higher-growth digital and promotional budgets. At the same time, major marketers will continue to develop their own media assets, especially in digital. This is one of the sector’s most provocative and disruptive developments; it represents yet another challenge to long-standing advertising-centric business models. The more media that marketers build on their own, the less they will buy.... Digital delivery platforms now allow marketers to achieve this on an unprecedented scale. Media companies need to figure out how they can turn this development into a positive—either by using their skills to develop “private-label” media offerings for marketers or by using their integrated media properties to enhance the value of marketers’ own media.

5. More Advertising
Even as digital spending growth on online display advertising ebbs and flows, digital spending on consumer promotions and shopper marketing programs has continued to accelerate. Tapping into this additional spending will require new go-to-market approaches in which media and entertainment companies work directly with marketers and their agencies to integrate manufacturers’ content into branded experiences for shoppers, including at retail.

6. Metrics
Today, media metrics are still focused on inputs (for example, impressions, reach, and engagement) rather than outputs (such as impact on brand equity, net promoter scores, or sales lift)… Media companies have an opportunity to leverage their digital audiences to build deeper engagement, deliver greater insights, and provide measurable results… Media companies that build community and nurture registered relationships with their audiences can take advantage of those assets to deliver new services to marketers. In addition, they can start to measure the results of digital campaigns, both current assets and new offerings that they develop, either on their own sites or as private-label media for marketers.

7. Analysis
Search traffic, social networking, and blogs, along with other elements of the daily clickstream, now provide a 24/7, real-time window into what resonates with audiences. Yet the primary approach to content development remains rooted in an analog workflow that is often too expensive, too slow, and too unilateral to adapt to the dynamics of digital consumption and monetization… We expect to see media companies incorporating data on consumers’ Web behavior to help … make better decisions about content development. Although these changes may initially face significant internal resistance in some creative organizations, over time they will be regarded as tools critical to managing the cost of content (including the deployment of creative resources), increasing consumer engagement, and strengthening advertising as well as paid media opportunities.

8. Social Media
Social media are enabling new monetization and distribution opportunities for entertainment and information offerings at compelling levels of scale… In addition to enabling new business opportunities, social media are important to publishers as channels for driving media consumption. Publishers are recognizing that social media are a critical source of traffic to their digital sites, in some cases as important as search engines. Because of this, we expect more entertainment, news, and information publishers to focus on “social media optimization” as a new capability for growing their audiences.

9. Mobile
The mobile Internet experience is evolving rapidly away from Web pages to downloadable applications, and it eventually may migrate again to cloud-based services. The race is therefore on to build digital relationships with consumers, deliver winning experiences, and grab a position of greater influence within this rapidly evolving ecosystem. As the battle intensifies between the Apple iPhone/iTouch ecosystem and that of Google Android in terms of devices and applications, media companies need to evaluate how to position themselves for greater growth in this medium through the right mix of mobile-focused organic investment, partnerships, and acquisitions.

10. Online Video
To date, much digital content from professional publishers has been focused on essentially repurposing an analog media experience for the Web with fairly limited innovation or rethinking of the content experience. And for the most part, media companies do not control the customer interface in digital. Rather, it is others—such as Apple, Google, and Amazon—that play this key role… It is in this last dimension—improving the consumer experience—that media companies need to intensify their efforts, and several are moving to do so. We foresee dramatic changes in 2010, as leading media players begin providing consumers with a more enhanced digital experience that they cannot get in analog media.