The media industry hasn't faced the easiest of times over the past few years as fragmentation continues and viewing habits of consumers continue to evolve. Faced with multiple evolving and disruptive forces, 50% of media and entertainment executives say, in a survey by Ernst & Young (EY), that they can no longer rely on traditional business models if they are to succeed in this landscape.
Many face a sense of inertia with approximately 28% of respondents indicating that businesses need to be reinvigorated. Nonetheless, many remain in a fix in not knowing when and what to prioritise. However, according to the report, some possible solutions include:
- Simplify their operating model
About 55% of executives say that consolidation of internal segments to streamline the business should be prioritised. While, 52% of all respondents identified de-layering management and increasing spans of control for remaining executives for agility within the organisation.
- Reboot innovation strategy and approach
Meanwhile, 38% of executives see incubators within the core of the business as a driver of innovation. Executives also believe that balancing sustained success against long-term vision requires a structured approach to innovation, hence 44% said the pressure to maximise short-term results is a barrier to innovation.
- Close talent gaps and build critical skills
About 49% of executives see the upskilling of the existing workforce as the key to talent development, while 61% of executives at companies with turnover between US$250 million and US$500 million see the gig economy as relevant to their talent strategy as opposed to just 20% for those with turnover above US$5 billion.
The report also strongly urges the need for companies to reinvent and innovate, else cease to exist. Another area of focus for businesses to attain operational change is through using data. Almost two thirds (62%) of respondents see the increasing availability of data as an opportunity for transformation. Notably, 56% of executives indicate that they prioritise building first-party data, compared with a figure of 13% who prioritise third-party sources.
John Harrison, EY global media and entertainment sector leader, said media and entertainment companies remain upbeat about change, however such diversity of business models and revenue streams, the starting point is often unclear. "The survey reveals that there is no single path to reinvention, but businesses can succeed by prioritising three key levers of change: operational excellence, innovation and upskilling talent. Embracing these ambitions can help them address short-term challenges and unlock long-term value creation,” he added.
According to Harrison, the need for digital skill sets is now the norm among media and entertainment companies, but changing technology continues to shift expectations. "To remain relevant, workers need to migrate up the value chain, reinventing themselves and continually improving their capabilities," he said.
The EY report titled "How are media and entertainment businesses reinventing in an age of transformation?" analyses the views of more than 350 global industry executives to reveal the catalysts, strategies and actions that are shaping business transformation.