Media Execs Expect Digital Revenues to Rise

NEW YORK: More than 90 percent of business leaders at media and communications companies expect digital revenues to grow this year, with more than one-third anticipating an increase greater than 10 percent, according to a new survey from KPMG.

KPMG’s annual Communications and Media Industry Business Climate Survey shows that 94 percent of management at communications and media companies expect to see revenues from digital rise this year, up from 2010, when 83 percent expected gains. Of the companies surveyed, 37 percent expect digital revenues to increase by more than 10 percent, compared to 31 percent of companies from the 2010 survey.

Nearly three-fourths of communications and media executives said they expect the overall revenue at their companies to be higher one year from now, in contrast with the 58 percent who anticipate growth for the current year.

"It’s clear from our survey that communications and media executives are more optimistic and their companies are placing bets that now is the time to position and invest for growth, despite an uneven economic recovery," said Paul Wissmann, KPMG’s national sector leader for communications and media. "They’re focused on investing in technology and products through both organic growth and mergers and acquisitions to beat the competition and grab emerging opportunities."

KPMG’s survey results show 44 percent ranked new distribution methods as the second or third most important driver; 43 percent placed social media platforms among the top drivers; 37 percent ranked online advertising among the top three.

In terms of M&A activity, nearly 7 out of 10 communications and media executives believe their companies will be involved in a merger or acquisition during the next two years, with 58 percent likely involved as a buyer and 10 percent as a seller.

"Given the pressure on communications and media companies to evolve to grab market share or be left behind in the shift to digitally-based services, it makes sense that M&A remains a key tactic for many," added Wissmann. "Recent large acquisitions in the communications and media industry, and numerous smaller acquisitions of digitally strategic companies, increase the pressure on all companies wanting a part of the digital value chain."