Digital media to drive M&E revenues through 2015

A major new report from professional services firm Ernst & Young has found that digital media looks likely to increase overall media & entertainment revenues over the next few years, and will account for a growing proportion of the total.

The report is the result of surveys conducted by Ernst & Young (one of the “big four” accounting firms) with 34 CEOs from global media and entertainment companies with combined annual revenues exceeding US$ 300bn.

It found that around half of all global media and entertainment CEOs believe digital revenues will increase their overall revenues and margins by at least 10% within the next three years.

When asked what will be the three biggest drivers of growth in content consumption during the next three years, CEOs were unanimous in their response: 100% believe mobile devices (including tablets) are the key to spurring demand for content.

CEOs are found to be especially bullish about emerging markets, where growing mobile device availability coupled with an improving wireless broadband infrastructure are creating significant opportunities for media companies to grow.

When queried about the greatest challenges facing the media and entertainment industry during the next three years, CEOs overwhelmingly agreed that global economic uncertainty and an inability to persuade consumers to pay fair value for digital content were the top two concerns.

Also on the CEOs’ list was the elimination of intermediaries between their companies and the end-user, resulting in increased direct business-to-consumer relationships; structural and regulatory ambiguity; and reduction and/or reallocation of marketing budgets.

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