There is a strong consensus among media and entertainment companies on the way the digital market is evolving, and also on what will drive future growth, according to a new survey by Accenture ( News - Alert).
This third annual survey from Accenture, entitled “2008 Global Media Content Survey,” examined the growth strategies of companies across the landscape of advertising, films, music, publishing, radio, the Internet, videogames and television.
The survey finds state that these companies are in broad agreement on the way the digital market is evolving, where the opportunities lie, and what will drive revenues over the next five years.
Approximately 70 percent of respondents indicated that they derive some revenue today from new alternate forms of media such as downloading or watching TV programs “on demand,” digital advertising or user-generated content.
In this year’s survey, the respondents cited four key sources of revenue growth - similar to the ones identified in last year’s survey - which indicates growing consensus about the potential of new platforms.
The survey notes that these four sources of revenue growth are multi-platform distribution, short form video, social media or user-generated content, and advertising.
Nearly two thirds of respondents believe that advertising-supported business models will be the number one business model in five years, while 38 percent of respondents believe that short form video kind of content will generate the greatest growth.
The survey also reports that a majority of respondents cited platforms or new ways of delivering content as the largest drivers of revenue growth over the next five years, and respondents also believe that social media and user-generated content are high-growth opportunities.
“It is great news that media organizations are developing a consistent strategic view of the key growth areas, but execution is slow,” said Gavin Mann, digital media lead for Media & Entertainment practice at Accenture.
However, he also noted that there clearly remains a huge effort to put in place the necessary capabilities, and it is apparent that the size of the task is still not fully understood.
Even though almost half of the executives interviewed said they know which capabilities they need to take advantage of in this new digital market, Accenture commented that “many have a false sense of their current capabilities.”
Accenture observes that 66 percent of the respondents have less than 40 percent of required capabilities, a number that is unchanged since last year’s survey, indicating that companies need to implement new digital technologies or be left behind.
“We interviewed executives at the very top of their organizations, and at this level it might appear that they share a consistent and flexible view of intellectual property,” commented Mann. “However, in many cases we believe this will actually require inordinate manual efforts, or work-arounds, throughout the organization each time a new distribution channel is launched. Such a cost structure is not sustainable over the long run.”
The survey also found that respondents were uncertain about when the mobile market will take off, and also believe that there are several barriers to the mass uptake of the mobile market.
These barriers include consumer readiness, ability, or lack thereof, to provide a consistent user experience, and also lack of readiness among both content owners and mobile operators/networks.
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