Media Companies' Digital Revenues Will Overtake Traditional Revenues By 2015
June 13, 2013 at 3:53 AM (PT)
The average revenue of media and entertainment companies will shortly cross the 50% mark from majority traditional to majority digital, according to a new report, "Digital agility now! Creating a high-velocity media and entertainment organization in the age of transformative technology," released by ERNST & YOUNG. The survey tapped the opinions of more than 550 senior executives from global media and entertainment companies. Today, revenue from digital is 47%, and survey respondents say that by 2015 it will account for 57% of revenue -- thus making digital the new norm and the primary source of revenue for media and entertainment companies.
The study goes on to identify characteristics of media and entertainment "digital leaders" -- companies that are using new technology not only to deliver digital products and services, but to build more agile organizations capable of sensing and responding far faster to shifting customer expectations and marketplace opportunities and risks. The digital leaders are pioneering the path to a higher level of organizational agility as the media and entertainment industry transitions to digital as its new norm.
"Mobile-social-cloud and big data analytics technologies are game-changers for M&E firms," said Global Technology Industry Leader PAT HYEK. "These technologies can help M&E digital leaders who broke ahead of the pack in the early stages of digital to extend their advantages, as well as offer opportunities for those who fell behind to adapt quickly and catch up."
According to Digital agility now! Creating a high-velocity media and entertainment organization in the age of transformative technology, a major differentiator between these digital leaders and other survey respondents is a greater emphasis on mobile-social-cloud and big data analytics technologies for internal collaboration. For example, digital leaders are 60% more likely than all other respondents to emphasize the importance of social media for internal communication among employees: 67% said it was "very" or "extremely" important, versus 42% of all others. The study points to the kind of rapid collaboration that is enabled by social networks and characteristic of an agile organization, where silos are broken down by the ready flow of information.
The study shows that digital leaders' advanced social listening programs, leading-edge analytics and cloud-based infrastructure enable rapid deployment of new products and resources, and give companies the ability to quickly learn from and fix mistakes. This organizational agility is necessary to meet the demands of rapidly evolving digital consumer behavior.
"Media & Entertainment companies no longer live in a world where everything lives in 'their' world. It's a connected eco-system with consumer technology leading the way," said Global Media & Entertainment Leader JOHN NENDICK.
Other results from the survey include:
* Technology alliances: Digital leaders emphasize alliances that let them act faster than "going it alone;" 51% rank alliances with technology and other M&E partners among their top three strategic priorities for digital transformation, vs. 30% for others.
* Second-generation deployments: Digital leaders were generally more than twice as likely to incorporate lessons learned from initial technology deployments to achieve more advanced functionality. For example, 49% of digital leaders use second-generation mobile technologies to develop products/services vs. 16% of all others.
* Smart mobility: Similarly, 32% of digital leaders use second-generation or later techniques in mobility to enhance employee engagement and communication, vs. 13% of all others.
* Cloud: Digital leaders emphasize the importance of cloud computing to enhance internal and customer-facing flexibility. For example, 74% of digital leaders say it's important to host business tools in the cloud, vs. 49% of all others; and 43% of digital leaders use second-generation cloud solutions to speed product/service development vs. 12% of all others.
* Big data analytics: Digital leaders are three times more likely than other respondents to use second-generation big data analytics techniques to improve customer engagement (26% vs. 9%). Among all respondents, 66% rely on in-house resources to get insight into customers yet 41% say they gain no insight from their data, suggesting they don't have the right big data analytics tools or skills in place and may be better off partnering to access external resources.