Media companies must reinvent to survive, says survey

More than 1 in 4 (28%) executives indicate they need to reinvigorate their business, but do not know what to prioritise

by FARA AISYAH/ pic credit:

OVER a third (34%) of media and entertainment (M&E) executives say their companies will no longer exist in five years unless their business undergoes reinvention, a study revealed.

According to a survey by Ernst & Young Global Ltd (EY) titled “How are media and entertainment businesses reinventing in an age of transformation?” 50% of participants say they can no longer rely on traditional business models if they were to succeed in this landscape.

The study, which analyses the views of more than 350 global industry executives, found that more than one in four (28%) executives indicate they need to reinvigorate their business, but do not know what to prioritise.

“Media and entertainment companies remain upbeat about change. But with such a diversity of business models and revenue streams, the starting point is often unclear, EY global M&E sector leader John Harrison (picture) said in a statement yesterday.

“The survey reveals that there is no single path to reinvention, but businesses can succeed by prioritising three key levers of change: Operational excellence, innovation and upskilling talent,” he said.

Embracing these ambitions can help them address short-term challenges and unlock long-term value creation, Harrison added.

The report noted the three biggest drivers of change across M&E industry subsectors, which are responding to a shifting competitive landscape which could lead to pressure on profitability; struggling to keep pace with technology as businesses evaluate digital innovations such as artificial intelligence and 5G; and challenges associated with changing customer expectations, which are impacting the uptake of products and services.

Executives also identify operating model change (41%); and operational delivery and execution (39%) as their top transformation priorities.

Meanwhile, simplifying the enterprise has emerged as a key theme in driving the next generation M&E operating model, with 55% of all executives indicating they want to streamline their business by consolidating internal segments.

Businesses are also using data to achieve operational change, as almost two-thirds (62%) of respondents see the increasing availability of data as an opportunity for transformation. Notably, 56% of executives indicate that they prioritise building first-party data, compared to just 13% who prioritise third-party sources.

“The evolving nature of revenue generation, combined with pressure to release capital to fund growth, is leading companies to re-evaluate transformation goals and how they respond to shifting customer demands,” Harrison said.

“Making the most of data that resides across the enterprise is one of the most crucial tactics for realising positive change — particularly in helping businesses to compete by improving the customer experience,” he added.

The survey highlights the growing imperative to foster continuous learning as there are four generations coexisting across the workforce, including boomers, Gen X, millennials and Gen Z.

A third (33%) of all executives identify the need to close the talent gap and build skills as a driver of change, rising to 43% and 42% among publishing and advertising executives respectively.

Nearly a quarter (24%) see the talent gap as a threat, while 30% list it among the biggest barriers to innovation.