Media Execs Eye Growth as Recession Fears Subside

NEW YORK: CFOs of leading media and entertainment companies have shifted their primary focus from cost-cutting to expansion, particularly in digital media, according to a new survey by EY.

The report, It’s Showtime! Digital drives the agenda, data delivers the insights, surveyed execs at 50 large global media and entertainment companies. CFOs are no longer concerned about the global recession, the survey reports. Instead, they are pursuing growth opportunities through investments in technology, digital talent and infrastructure, as well as acquisitions and other deals. Two years ago, 62 percent of senior execs said that global economic uncertainty would be a challenge over the following three years; this year, only 26 percent are concerned about the economy.

“The CFOs told us in no uncertain terms that the economy is no longer an obstacle and now is the time for media and entertainment companies to invest in growth and focus on building their businesses," said John Nendick, the global media and entertainment leader at EY. "The industry is now poised to deliver on the promises it has been making the past several years but has been unable to achieve because of the economy. The CFOs recognize the recession is over and it’s showtime.”

Challenges remain, the survey cautions. Over the next three years, the top obstacle listed by CFOs was technology and platform disintermediation (64 percent), followed by an inability to persuade consumers to pay fair value for content (58 percent). Also of concern are structural and regulatory uncertainty (42 percent) and reductions/reallocations of marketing budgets (26 percent).

The top priority looking ahead is the evolution of digital and online distribution (74 percent). Only 34 percent of respondents listed cost-reduction and business efficiencies as a priority. Also cited were the need to create differentiated content (32 percent), global brand extension (32 percent) and growth in new market segments (30 percent).

The survey also found that emerging markets are no longer the top geographic focus for expansion; 72 percent of companies are focusing on their existing/core markets. Industries posted to thrive in the future include interactive media (72 percent), cable TV channels (42 percent), conglomerates (36 percent), film and TV production (30 percent) and content and information services (30 percent).