Change or Die: 50% of Media and Entertainment Execs Say They Can’t Rely on Old Biz Models, Survey Finds
Change or Die: 50% of Media and Entertainment Execs Say They Can’t
Rely on Old Biz Models, Survey Finds
By TODD
SPANGLER January 8, 2020
About 50% of
M&E executives said their company cannot rely on traditional business
models to survive the shifting landscapes, according to a new survey by
consulting and professional services firm EY. Indeed, 34% of those surveyed
indicated that their company will no longer exist in five years unless their
business undergoes reinvention.
The survey
identified three key factors driving change across M&E industry subsectors:
responding to a new competitive landscape; struggling to keep pace with
technology as businesses evaluate digital innovations, such as artificial
intelligence and 5G; and dealing with challenges associated with changing
customer expectations. Nearly two-thirds (63%) of execs embarking on change say
optimizing the operating model will be truly transformational – but at the same
time, 28% said they don’t know what steps to prioritize in pursuing such a
strategy, according to the EY survey.
But the
leadership for business change doesn’t necessarily come from the top: Only 20%
of the execs EY surveyed cited current corporate strategy and their CEO’s
vision as a leading driver of innovation
The survey
results show that there’s no single path for M&E businesses to change for
the future and that “media and entertainment companies remain upbeat about
change,” said John Harrison, EY’s global media and entertainment sector leader.
However, he added, “with such diversity of business models and revenue streams,
the starting point is often unclear.”
To compile the
results, EY polled more than 350 global industry executives. It released the
findings this week at the 2020 CES trade show.
Of the execs
surveyed, 41% cited business-model changes and 39% identified operational
delivery and execution as their top transformation priorities – with 62%
agreeing that the increasing availability of data is an opportunity for
transformation. Notably, 56% of execs indicate that they have prioritized
building first-party data, compared with just 13% who prioritize third-party
data sources. In addition, 46% said automation is the single most important
tactic for achieving cost savings.
Meanwhile, talent
development – as it relates to business transformation – remains a key
strategic priority among media and entertainment companies. One-third of
executives surveyed identify the need to close the talent gap and build skills
as a driver of change, and nearly a quarter (24%) see the talent gap as a threat.
About half of respondents (49%) prioritize upskilling their existing workforce
as the best way to develop talent.
Interestingly,
the need to tap into the “gig economy” varies depending on the size of the
enterprise, the EY survey found. About 61% of execs at companies with $250
million-$500 million in annual revenue see the gig economy as relevant to their
talent strategy – compared with 20% among those at companies with revenue over
$5 billion.
EY’s study is
based on a survey of more than 350 media and entertainment executives, taking a
representative view of companies by scale, geography and industry subsector.
For each question, respondents were asked to select their top three responses
from a predefined list of options; for example, a response of 50% means it was
selected as one of the top three answers by half of respondents.
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