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CEOs see revenue jump from digital media

London, September 13, 2012

Nearly half of all global media and entertainment CEOs believe digital media will increase their overall revenues and margins by at least 10 per cent within the next three years, according to a report.

Seventy-nine per cent the of CEOs surveyed attributed the double digit growth to tablets, added the survey conducted by tax advisory services firm Ernst & Young with 34 CEOs from global companies.

“CEOs are undeterred about the role digital will play in their futures,” said John Nendick, global media and entertainment leader at Ernst & Young.

“There is a heightened optimism from a few years ago when industry leaders were more tentative about the potential of digital. All of the CEOs we spoke with understand that digital is probably the single most important factor – impacting their ability to grow both revenues and margins.”

The report also addresses the impact of “digital ecosystems” through which consumers view and share content on a multitude of interconnected devices. Ecosystems are accelerating the ability for consumers to discover, choose and enjoy media, with media and entertainment companies bundling and marketing their products and services specifically for these individual digital ecosystems.

“The integration of media content, devices and networks creates self-sustaining digital ecosystems. The more users interact with content, the easier it is to learn about their habits and for content, advertising, and services within these ecosystems to evolve and grow,” said Howard Bass, senior partner, Global Media & Entertainment Advisory Services, Ernst & Young.

When asked what will be the three biggest drivers of growth in content consumption during the next three years, CEOs were unanimous in their response.

A full 100 per cent believe mobile devices (including tablets) are the key to spurring demand for content. CEOs are especially bullish about emerging markets, where growing mobile device availability coupled with an improving wireless broadband infrastructure are creating significant opportunities for media companies to grow.

When queried about the greatest challenges facing the media and entertainment industry during the next three years, CEOs overwhelmingly agreed that global economic uncertainty and an inability to persuade consumers to pay fair value for digital content were the top two concerns.

Also on the CEOs’ list was the elimination of intermediaries between their companies and the end-user, resulting in increased direct business-to-consumer relationships; structural and regulatory ambiguity; and reduction and/or reallocation of marketing budgets. – TradeArabia News Service




Tags: revenue growth | Ernst & Young | Survey | digital media | Tablets |

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