Media CFOs optimistic about digital future, says Ernst & Young survey

http://www.marketingmag.ca/english/news/media/article.jsp?content=20100623_153346_7132

To keep up with Canada's changing media and entertainment industry, companies must embrace new digital and mobile offerings while maintaining costs on traditional operations, according to a new Ernst & Young survey.

Three-quarters of CFOs see the development of new distribution channels as an opportunity for growth, with 63% planning to create new products and services to drive revenue. The CFOs forecasted that cable operators and Internet/interactive media companies are positioned to grow the fastest in the industry.

"Consumers are becoming increasingly sophisticated and want interactive content," said Neal Clarance, leader of Ernst & Young's Media and Entertainment practice in Canada, in a release.
"The mobile phone, for example, is becoming the new Internet and home computer, so that one device enables the user to work, play and communicate. New products and technology improvements will continue to drive a shift in consumer desires and behaviour."

According to the survey, consumers are using mobile devices three times more often than they did five years ago. On the other hand, time spent with traditional media, such as TV and radio, is declining. Sixty-six percent of CFOs believe disruptive business models, such as ebooks and mobile content will have the greatest impact on the media and entertainment industry during the next two to three years.

To keep generating revenue from traditional media and entertainment sources, CFOs believe that process improvement (according to 69% of participants) and integrating with other technologies (63%) will help manage costs in the near future.

Clarance believes the advances in digital and mobile capability will create a shift in advertising, to more specific product placement and targeted advertising online.

"Marketing and advertising has traditionally been about how to get the most ‘eyes seeing your product,'" Clarence said. "But now it's more about how to attract the "right eyes."

Still, Clarance said companies have not determined the most efficient way to attract revenue from digital markets.

"The company that comes up with a winning formula is sure to become an industry leader, but in the meantime, a lot of money will need to be spent searching for a solution," he said.