Entertainment Company CFOs capitalize on Digital Growth

Earnest and Young is one of the world's leading professional services organizations, helps companies across the globe to identify and capitalize on business opportunities. In 2008 they interviewed several media & entertainment CEOs and few very few of them had anticipated where the focus of the digital revolution was transforming. In 2010 they completed a study that focused on senior media and entertainment executives by asking the Chief Financial Officers of 75 leading global media and entertainment organizations for their insight into their approach for the future and the ever changing digital world.

The study touched on several key points however I am just going to share a few with you. First, Digital is now- they have noticed that new technology continues to have an extremely powerful influence on how individuals experience entertainment and information. There is a noticeable shift to digital and is challenging old entertainment business models and causing CFOs to make changes in their investment decisions. Secondly, CFOs are trying to juggle balancing between digital growths and declining traditional media revenue. The CFOs are beginning to see a significant growth in digital revenues, however with price deflation and product un-bundling, combined with the global economic downturn, CFOs are starting to recognize a the placement of increasing pressure on traditional media revenues. All that means is that the industry revenues and “per unit spend” on different media content is no longer increasing at a rapid speed. Lastly, Interactive media companies are best positioned to thrive in the next two to three years. The CFOs have stated that they will not lose sight of doing thing traditionally, but digital earnings are definitely on a rise. The earnings are rising at lower price points and have yet to become bigger than the traditional media revenue streams.

With the shifts in consumer demands, media multi-tasking has been taken to new levels. The consumer behavior has caused the consumption rates of pure-play Internet, video games, how consumers obtain their music and how they share to soar to new levels. Although radio, broadcast networks television, and print media are showing a decline, they are also seeing there consumption rates rise. The consumption is rising due to consumers using television as a multi-tasking medium. Consumers are tweeting and blogging while watching their favorite shows.

CFOs of major entertainment companies are noticing how digital landscaping is evolving and therefore determine where they need to make their investments accordingly in order to protect their market position and ensure that they remain prevalent in the entertainment business world.


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Poised for digital growth: Preserving profitability in today’s digital world