LONDON, Jan. 16, 2019 /PRNewswire/ -- Media and entertainment companies must adopt a multigeneration strategy and challenge perceptions around the behaviors of older generations, or risk conceding huge growth potential. This is according to EY study, Ten opportunities and threats for media and entertainment companies | 2019, which shortlists the most pertinent risks and opportunities facing the industry in the next 12 months.
In recent years, the industry has placed younger generations at the heart of content and channel strategies. But while Gen Z and millennials are regarded as digital natives, baby boomers (born 1946-1964) typically have more disposable income and are becoming increasingly adept in how they consume content and embrace technology. EY research1 indicates that boomers are more loyal than younger generations, and with people aged 65 and older set to exceed the number of children under the age of five by 20202, this demographic offers an emerging growth opportunity. The report states that companies must now take steps to better understand boomers' unique preferences.
John Harrison, EY Global Media & Entertainment Leader, says:
"As a demographic group, the older generation is simply too big to ignore and will only become more influential over time as they ascend the technology ladder. With competition intensifying, to get closer to the customer, media and entertainment companies must now broaden their focus beyond younger demographics if they are to succeed in an increasingly complex landscape. A data-driven approach will be essential for companies to understand how older generations are adopting technology, and to help facilitate the development of personalized experiences across the right channels – thereby unlocking huge opportunities for growth."
Striving to compete with digital natives
Looking beyond age demographics, the report also cites "obsessing about the customer" as one of the top ten themes for 2019. While media companies are continually reinventing products to compete with digital natives, complexity breeds inconsistency that can deliver a poor customer experience. In particular, many companies lack the infrastructure to gather relevant information from multiple channels and feed it back into their ecosystem. To mitigate this, the report states that companies must deploy technology more like digital natives to enable better customer experiences.
Another key theme, "re-calibrate for growth," indicates that one way to achieve this may be through investing in new digital ventures. With many of the leading digitally native companies turning traditional business models on their heads, the report highlights that in order to keep pace, radical change is required around how more traditional media companies raise, invest and optimize capital. Indeed, nearly a quarter (23%) of media and entertainment respondents to the 19th EY Global Capital Confidence Barometer indicate that they are now reviewing their portfolios every quarter – up from 1% in April 2018.
With such rapid advancements in technology, and with media companies amassing huge volumes of personal data, cybersecurity also features as a critical threat facing the sector. The report highlights how the Internet of Things and a growing number of connected ecosystems have multiplied the potential threat level in recent years. In response, companies need to take steps to devise a multilayered cybersecurity strategy, with a particular focus around brand-related assets.
Harrison says: "We have known for some time that media and entertainment companies are at the center of disruption, driven by the inception of new technologies and changing consumer attitudes. As ecosystems continue to shift at an even greater pace across the industry, the imperative to act is now as companies place their bets on new technologies, business models and mergers and acquisitions to improve how they interact with their customers. But in doing so, they must not overlook the urgency to build higher levels of cyber resilience across what is becoming a much wider content delivery chain."
A perfect storm of geopolitical trends
The report further identifies unprecedented disruption across the tax landscape as presenting both a huge opportunity and threat to the industry. A range of macro trends, including Brexit, trade disputes and a global drive toward increased transparency, are playing into a deepening sense of uncertainty. Meanwhile, the biggest revision to the US corporate tax code in 30 years could mean greater upside for companies that host their intellectual property in the US. Media companies must build digital tax functions that are sufficiently agile to respond to this turbulence.
Other opportunities and threats cited in the report include intelligent automation, which can help companies achieve tangible benefits on both the bottom and top lines; the prospects of building direct to consumer business models; and the intensifying battle for content.
Notes to Editors
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
How EY's Global Media & Entertainment Sector can help your business
In an industry synonymous with creativity and innovation, the bar for business excellence is set high. You need to embrace new technology, develop new distribution models and satisfy the demands of a voracious and outspoken consumer. At the same time, it's important to manage costs, exceed stakeholder expectations and comply with new regulations. There's always another challenge just around the corner. EY's Global Media & Entertainment Sector can help. We bring together a high-performance, worldwide team of media and entertainment professionals with deep technical experience in providing assurance, tax, transaction and advisory services to the industry's leaders. Our network of professionals collaborates and shares knowledge around the world to deliver exceptional client service, leveraging our leading market share position to provide you with actionable information, quickly and reliably.
About the report
The media and entertainment industry is squaring up to the challenges of shifting customer demands, technology innovation, regulatory and policy upheaval, and a strategic reshaping of the competitive landscape. In the latest look at the biggest opportunities and threats facing the industry, EY Global Media & Entertainment Sector team highlights the priorities for industry leaders and how they can respond.
EY Global Media Relations
+44 (0)207 980 0454
1 EY report, As easy as X, Y, Z: Exploring generational differences and attitudes to technology, media and telecommunications
2 World Health Organization report, Ageing and health, February 2018, http://www.who.int/news-room/fact-sheets/detail/ageing-and-health