Now is the time for media firms to invest in digital products or face being left behind when earnings from traditional media lose out to digital sales, a new report from Ernst & Young suggests.
Following a survey of more than 550 senior executives at technology, gaming, publishing, film, broadcast media and social networking companies, Ernst & Young discovered that 47pc of all revenues in media and entertainment companies currently comes from digital products.
The professional services firm then forecast 10pc growth in these revenues over the next two years, reaching 57pc of overall income by 2015.
In this short time frame, media firms need to prepare themselves in order to stay ahead of the game. According to Ernst & Young’s survey, 50pc of these companies are willing to lose money in the short term in order to develop digital products and services and 64pc are already building up their digital staff faster than their digital revenue is growing.
“The media and entertainment industry has been on a digital journey for quite some time, but when you drill down into the data in advertising, in social media, in film and in broadcast and cable, you see that the digital transition isn’t this thing of tomorrow to keep in the back of the mind, it’s here,” said John Nendick, global head of media and entertainment at Ernst & Young.
Cloud, mobile and big data
Ernst & Young’s report suggests that firms form industry alliances instead of trying to go it alone and recommends focusing on trends in cloud and mobile.
The executives seem to agree on this, with 83pc of those surveyed predicting that smart mobile technology will drive revenue growth over the next two to three years, and 74pc saying the same for cloud.
The report also cites big data as key driver of revenue for these companies in the near future, but 41pc of those surveyed said they don’t currently gain any insight from their data. Those who identified themselves as embracing digital distribution, though, were three times more likely to use second-generation big data analytics techniques to improve relationships with customers.
Digital media image via ra2studio/Shutterstock