Accenture’s Global Media and Entertainment High Performance Study 2011

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Fueled by rapidly rising consumption and rebounding capital markets, the past year has seen Media and Entertainment companies worldwide accelerate their change programs across several dimensions, in response to the pervasive impact of digital disruption. At the same time, they have gained renewed confidence as their focus shifts from survival to competition and growth.

However, Media and Entertainment companies know their industry remains in a state of flux that will continue for the foreseeable future. To keep pace amid this ongoing and sweeping change, while also building sustainable and profitable businesses for the future, companies need unprecedented digital operational models. Yet many are still less than half-way along their transformation journey.

Those that fail to reach the ultimate destination of sustainable profitability are likely to face extinction. But for those that win this race, the prize is bigger than ever before.

For the fifth successive year, the Accenture Global Media and Entertainment High Performance Study 2011 has researched the views of 130 leaders and decision-makers in the Media and Entertainment industry worldwide, spanning broadcasting, publishing, filmed entertainment, portals, interactive gaming and music.

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As with previous studies, we have refined and expanded the research program in the light of knowledge built up in previous years, with a view to deepening the insights gained across all segments of the industry. The qualitative study on which this report is based includes interviews with 130 C-Level executives—increased from 102 in the previous year in order to improve our coverage of all segments, particularly portals and publishers.

The respondents are all executive leaders in six Media and Entertainment industry sectors, as broken down in the table below. They are based in 18 countries, with 42 (or 32.3%) of the interviewees located in Asia Pacific, 50 (38.5%) in the Americas, and 38 (29.2%) in Europe/Middle East.

Key areas of focus in this year’s interview program included companies’ approach to the three key industry drivers of the digital consumer, digital monetization models, and digital supply chain—together with the impacts of these factors on digital operating models. This report presents some of the key findings from our 2011 study and the principal implications for Media and Entertainment companies seeking to achieve high performance in an increasingly digital environment.

Key findings of the companies surveyed:

• In the past year, companies have continued to develop their digital strategies and invest in digital transformation, and have become increasingly confident in their ability to compete going forward. 84% of companies increased their investments in the digital supply chain in 2010.
  
  
• Nevertheless, the vast majority recognize that their industry is a long way from reaching a stabilized situation. 80% believe the industry is still in a state of flux, with significant further redistribution of revenues yet to take place across the digital supply chain over the next two years.
  
  
• Amid this ongoing change, most companies know that executing their digital vision and strategy for the evolving environment remains a huge challenge. Only 43% believe they are already over half-way along their journey to a digitally integrated file-based enterprise.
  
  
• Companies also know that revenues from “classic” media will remain important as “broadband” media revenues build up. Only 22% of companies currently get more than a quarter of their revenues from digital sources.

Our research and industry experience both indicate clearly that high performing Media and Entertainment companies will shift from legacy vertical, channel-oriented structures toward the type of horizontally-layered digital operating model we have described in this study.

However, it is equally clear that the precise implications and challenges of executing such a model will vary between different segments of the industry; between different geographies, due to variations in local behaviors, legislation and infrastructures; and even between different businesses in the same market segment.

To investigate more deeply the implications for your Media and Entertainment business in its drive to achieve and sustain high performance, please download the report or contact the authors.