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Others Growing optimism amongst E&M CEOs as they transform their biz: PwC study

Growing optimism amongst E&M CEOs as they transform their biz: PwC study

Author | exchange4media News Service | Saturday, Apr 19,2014 10:59 AM

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Growing optimism amongst E&M CEOs as they transform their biz: PwC study

There is growing optimism amongst entertainment and media (E&M) CEOs as they transform their businesses. Product and service innovation will provide the greatest opportunity for revenue growth and is likely to play a pivotal role in addressing their greatest concerns: shifts in consumer spending and behaviour and speed of technological change. However, risk management is the area of the business least prepared moving forward.

Ninety-three per cent (compared to 80 per cent in 2013) are somewhat or very confident in their company prospects for revenue growth in the next three years. They are also more optimistic about the global economy despite some concerns. Thirty-nine per cent of E&M CEOs believe that the global economy will improve in the next 12 months, compared to 20 per cent last year. However, there are concerns about Government response to fiscal deficit and debt burden and growth in developed economies. The same business threats remain this year. The top three business threats E&M CEOs are extremely concerned about are: shifts in consumer spending and behaviour; speed of technological change; and new market entrants.

Innovation will drive growth, but is more Government support needed?
Over half of E&M CEOs surveyed (56 per cent) see product/ service innovation as the main opportunity to grow their business in the next 12 months, more than any other industry surveyed. As such, a majority of E&M CEOs are focusing on developing an ‘innovation ecosystem’, which supports growth.  However, 58 per cent also think that the Government in their country has been ineffective/ greatly ineffective in developing such as ecosystem.

Seventy-one per cent E&M CEOs are concerned about shifts in consumer spending and behaviour. Ninety-four per cent E&M CEOs think technology will have the most transformative effect on their business.

A more collaborative approach for 2014, but not top of the growth agenda
Almost two-thirds of E&M CEOs surveyed (61 per cent) plan to enter a new strategic alliance in the coming 12 months, more than almost any other industry group surveyed. Although, strategic alliances and joint ventures are not top of E&M CEOs growth agenda: only 11 per cent believe that strategic alliances and joint ventures will be the main opportunity for growth.

Business transformation underway, but what about risk management?
E&M CEOs have been busy transforming their businesses in response to global trends. However, with shifts in consumer spending and behaviour and the speed of technological change being key concerns for E&M CEOs, it is no surprise that approximately two thirds are making changes in the areas of customer growth and retention and technology investment. However, only 38 per cent of E&M CEOs are making changes in the area of risk management, compared to 53 per cent of the global total.

There is growing optimism amongst E&M CEOs in their company prospects for revenue growth in both the short and medium term:
• 83 per cent of E&M CEOs surveyed (compared to 70 per cent in 2013) are somewhat or very confident in their company prospects for revenue growth in the next 12 months
• 93 per cent of E&M CEOs surveyed (compared to 80 per cent in 2013) are somewhat or very confident in their company prospects for revenue growth in the next three years

Entertainment and media CEOs are also more optimistic about the global economy despite some concerns. 39 per cent of E&M CEOs believe that the global economy will improve in the next 12 months, compared to 20 per cent last year.

However, E&M CEOs also have some concerns. 74 per cent are concerned about Government response to fiscal deficit and debt burden and three quarters are concerned about the continued slow or negative growth in developed economies.

The same business threats remain
Shifts in consumer spending and behaviours, and the speed of technological change continue to keep CEOs awake at night and are their greatest concerns: 
• 71 per cent of E&M CEOs are somewhat or extremely concerned about shifts in consumer spending and behaviours, more than any other industry surveyed (and compared to a global total response of 52 per cent)
• 65 per cent of E&M CEOs are somewhat or extremely concerned about the speed of technological change (compared to a total global response of 47 per cent)

E&M CEOs, more than any other industry surveyed, are extremely concerned about shifts in consumer spending and behaviours

Technology continues to transform the industry and E&M CEOs, more than any other industry surveyed, are extremely concerned about the speed of technological change.

E&M CEOs, more than any other industry surveyed, are extremely concerned about new market entrants.

A more collaborative approach in 2014
Nearly two thirds of E&M CEOs surveyed (61 per cent compared to 44 per cent cross-industry response) plan to enter a new strategic alliance or joint venture in the coming 12 months, more than almost any other industry group surveyed. This is a significant increase on last year; only 43 per cent of E&M CEOs said they planned to enter into a new strategic alliance or joint venture in 2013. Of those planning a strategic alliance or joint venture, 55 per cent plan to do so in the more mature markets, which are driving digital growth: North America and Western Europe.

Even though more E&M CEOs are planning on entering into a new strategic alliance or joint venture in the coming 12 months, they are not top of the growth agenda. Only 11 per cent of E&M CEOs surveyed believe that strategic alliances and joint ventures will be the main opportunity for growth.

Business transformation is underway
E&M CEOs have been busy transforming their businesses in order to capitalise on global trends namely: technological advances and demographic shifts:
• More than any other industry, 94 per cent of E&M CEOs rank technological advances as one of the top three global trends that will have the most transformative effect on their businesses over the next five years
• 68 per cent of E&M CEOs rank demographic shifts as one of the top three global trends that will have the most transformative effect on their business over the next five years.

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