Ernst & Young Report: CFO Attitudes Changing Toward Digital11 Aug, 2014 By: Chris Tribbey
The bottom line will always be important to the CFOs of media and entertainment companies, but isn’t their primary concern anymore, according to a new report.
Interviewing 50 CFOs in the media and entertainment space — including those from DreamWorks Animation, Sony Pictures Entertainment, DirecTV, The Walt Disney Studios and Netflix — the report from Ernst & Young (EY) found CFOs’ No. 1 concern is making sure their companies are positioned for digital growth. Only 26% said economic uncertainty was their chief concern, compared with 62% who said the same two years ago.
“The CFOs told us in no uncertain terms that the economy is no longer an obstacle and now is the time for media and entertainment companies to invest in growth and focus on building their businesses,” said John Nendick, global media and entertainment leader at EY. “The industry is now poised to deliver on the promises it has been making the past several years but has been unable to achieve because of the economy. The CFOs recognize the recession is over and it’s showtime.”
Technology and platform disintermediation (64%), an inability to persuade consumers to pay a fair price for content (58%) and regulatory uncertainty (42%) were the top concerns CFOs said they had looking ahead during the next few years.
Improving how their companies respond to data also is a chief concern, according to the report. While nearly 60% said their companies successfully use data to respond to existing customers, only 33% said their companies do a good job using data to bring in new customers.
The top priorities for 2015 are the evolution of digital and online distribution (74%), cost reductions (34%) and creatively differentiating content (32%). And pulling in (and retaining) top talent is proving important as well.
“Recruiting and retaining talent is a significant concern for almost every CFO we surveyed,” said Howard Bass, EY’s global media and entertainment advisory services leader. “All agreed that talent, as well as establishing better collaboration between teams and different business units, are the most important factors for efficiently running their companies. The right talent means finding people who have the technical skills but are also digital savvy.”