Executives participating in the study say that the digitization of content, combined with the increasing adoption of broadband distribution technologies, is creating major shifts, challenges and opportunities for their industry.
The study, Fast Forward: Technology Propels Media & Entertainment CEOs into the Future, is based on extensive industry research, including in-depth discussions with 23 CEOs, CFOs and leading industry financial stakeholders, including top executives from such major global companies as The Walt Disney Company, Viacom, Inc., Time Warner, Inc., Sony Corporation of America, Reuters Group plc, Metro-Goldwyn-Mayer, Inc., Liberty Media Corporation, EMI Group plc, BSkyB plc, Havas, Clear Channel Communications, Inc. and others.
The media and entertainment companies represented in these high-level discussions had combined annual revenues of $214 billion and a combined market cap of approximately $340 billion.
"The pace of technology-driven changes in the media and entertainment industry throughout Europe and the world has created enormous strategic challenges and uncertainty for global companies," said John Nendick, Americas Industry Leader of Media and Entertainment for Ernst & Young. "Executives believe they must bring new talents and skills onto their management teams capable of better understanding and responding to constant change."
In fact, building the right management team was cited by 75% of participants as a major internal challenge to success, far more than any other factor. Technology and financial knowledge were frequently cited skills that will differentiate the next generation of managers, according to the executives.
Among the study's findings:
"While the current level of new technology adoption may differ by country and region, the overall trend remains the same worldwide," said Steve Barber, European head of Media and Entertainment for Ernst & Young.
"Content digitization and the introduction of broadband technologies are forcing media and entertainment companies to rethink every aspect of their business, from intellectual property protection to new models for distribution and revenue creation."
"This study is highly significant for the South African Media & Entertainment industry," adds David Purnell, leader of Media and Entertainment for Ernst & Young in South Africa.
"Whilst DVRs in South Africa may be slightly behind and may not impact quite so profoundly as in the US and Europe for the moment, we are anticipating the significant impact which digital migration will have on television and radio in this country. Equally significant are the global trends for the music industry, which are further exacerbated in South Africa by piracy, which extends beyond the Internet.
"We believe that local CEO's have much to learn from their peers in this survey, as the global industry faces up to the most competitive time in its history and prepares to take on the challenges of new technology and operational re-organisation," Purnell concludes.
