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Ernst & Young: 57% of Entertainment Revenue to Come From Digital by 2015

11 Jun, 2013 By: Erik Gruenwedel

Filmed entertainment rated average in its organizational digital “agility”

More than 50% of revenue from media and entertainment companies will come from digital channels by 2015 compared with traditional sources — up 10% from today, according to a new survey conducted by Ernst & Young.

The consulting giant found that filmed entertainment is marginally more prepared (by 4%) to capitalize on digital distribution, compared with cable and broadcast, publishing (by 6%) and advertising (17%). Filmed entertainment lags behind music, social media, networking, gaming and other so-called “digital leaders,” according to Ernst & Young.

The study — comprising surveys from more than 550 media and entertainment senior executives — found that digital products and services enable companies to be more flexible in responding to shifting customer expectations and marketplace opportunities and risks. Notably, 51% of “digital leaders” rank alliances with technology and other media and entertainment companies among their top-three strategic priorities for digital transformation, compared with 30% among other respondents.

Digital leaders were generally more than twice as likely to incorporate lessons learned from initial technology deployments to achieve more advanced functionality. For example, 49% of digital leaders use second-generation mobile technologies to develop products and services versus 16% of all others. Similarly, 32% of digital leaders use mobile technologies to enhance employee engagement and communication, compared with 13% of all others.

The report found that among executives embracing digital technology, 74% said it’s important to host business tools in the cloud versus 49% of all others; and 43% of those “digital leaders” use second-generation cloud solutions to speed product and service development versus 12% of all others.

Finally, media and entertainment executives embracing digital distribution are three times more likely than other respondents to use second-generation big data analytics techniques to improve customer engagement (26% vs. 9%). Among all respondents, 66% rely on in-house resources to get insight into customers yet 41% say they gain no insight from their data, suggesting they don’t have the right big data analytics tools or skills in place and may be better off partnering to access external resources, according to Ernst & Young.

“Media and entertainment companies no longer live in a world where everything lives in ‘their’ world. It’s a connected eco-system with consumer technology leading the way,” John Nendick, global media and entertainment leader with Ernst & Young, said in a statement.


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