Ernst & Young's Media & Entertainment CEO Study provides a window into top executives' priorities
LOS ANGELES, Feb. 17 /PRNewswire/ — Media & Entertainment CEOs across the globe are struggling to balance the inevitable shift to digital business models while they maintain the strength of traditional sources of revenue. CEOs are also attempting to keep as much forward momentum as possible in some of the most turbulent economic times in recent memory. These insights and others are revealed in Fast Forward, Ernst & Young's Media & Entertainment (M&E) CEO Study, which was recently presented to multiple, high-level M&E executives.
Ernst & Young's M&E Global Industry Center surveyed 27 CEOs representing combined annual revenues of more than $333 billion, asking them to shed light on the array of challenges ahead in the M&E industry and share their strategies for success. In the short time between the study's inception and the follow-up presentations to executives, the world has changed. "These CEOs still have to strategically plan and manage everything that goes with doing business in a predominately digital world," says John Nendick, Global Media & Entertainment Leader of Ernst & Young LLP, "but now they also have to cut short-term spending in the context of decreasing revenues and aggressive cost-cutting demands."
Not surprisingly, M&E CEOs are looking to protect their traditional sources of revenue, many of which continue to generate revenue predictably, albeit less abundantly. At the same time, they recognize that their future depends on success in digital and emerging markets.
Companies are streamlining their advertising models for more transparent value propositions and increased returns on investments. Even before the current crisis, increasing market pressures had begun squeezing companies throughout the value chain, especially in advertising-reliant markets. That caused CEOs to reevaluate their strategic focus and, in some cases, to accelerate the transition to digital business models. "As one executive told us," Nendick continues, "being digital in time for the downturn might have made a difference by opening up other revenue streams and making the process of sharing content easier, but [they] just aren't there yet."
Expanding the CFO role
Although many of the CEOs' responses to questions about upcoming challenges dealt with technology enablement (27%) and consumer demand (27%) versus content innovation (19%), they also prioritized increased expectations for financial executives. One CEO explained, "the key to me as CEO is that the finance organization puts the models in place to enable me and the operational leaders to understand our business today and tomorrow." The economic downturn has solidified that perspective.
CEOs said they are demanding more insight, analysis and planning from their CFOs (30%), a more efficient finance function (20%) and open, accurate accounting (20%). Nendick adds, "CEOs today tell us that they're relying more and more on their CFOs and finance executives to help them make the hard decisions. They need the right information to make strategic decisions and they're looking for the best input they can get to determine where to make the necessary cuts."
Another CEO made this comment: "A good CFO will partner with the CEO in a very different role because of the changes in the media landscape." Indeed, CEOs are turning more toward CFOs to tackle liquidity, debt management, asset valuation, counter-party exposure, tax planning and more frequently, the supply chain, to help improve processes and due diligence. The majority of CEOs said identifying and fostering talent is not just the greatest challenge, but also the key to success (31%). CEOs also ranked both ability to execute and tech-savvy as primary leadership qualifications.
Among other things that CEOs and C-suite executives expressed while discussing the study with Ernst & Young executives, was an increased focus on leveraging shared services. The total cost of finance and support services is being re-evaluated and reprioritized and regulatory compliance processes are being challenged to reduce risk and drive cost savings.
They are more aware than ever of the need to eliminate redundancy and inefficiencies, so they are looking at where they can do things differently, not only as a means of staying viable and relevant in this challenging economy but also as a catalyst for ongoing improvement.
As Nendick concludes, "The CEOs who use this economic downturn as an opportunity to make their businesses more efficient and invest in technology and digital media will be the most prepared for evolving consumer demands when we move out of the recession."
About Ernst & Young's Global Media & Entertainment Center
Whether it's the traditional press and broadcast media, or the multitude of digital media, audiences now have more choice than ever before. For media and entertainment companies, integration and adaptability are becoming critical success factors. Ernst & Young's Global Media & Entertainment Center brings together a worldwide team of professionals to help our clients achieve their potential — a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately, it enables us to help our clients meet their goals and compete more effectively. It's how Ernst & Young makes a difference.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.
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Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.
This news release has been issued by Ernst & Young LLP, a member firm of Ernst & Young Global Limited.
Source: Ernst & Young LLP
CONTACT: Samantha Sims, Ernst & Young, +1-201-872-1683,
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