January 20, 2010
Engaging and Interacting with Consumers Directly is New Battleground For Media and Entertainment Industry, Accenture Survey Finds

NEW YORK; Jan. 20, 2010 –Media and entertainment companies are reinventing themselves by making major investments in digital technologies that will allow them to engage directly with consumers to drive revenue growth, a new survey by Accenture (NYSE:ACN) shows.
According to Accenture’s Fourth Annual Global Content Study, these companies are taking this action as a direct result of the increasingly divergent ways people consume content and the manner in which revenues are being redistributed throughout the industry to traditional media and entertainment companies, as well as non-traditional entrants like cable companies, gaming companies and mobile communications providers.
The study also found a consensus among the more than 100 global senior industry executives surveyed that a multi-platform approach to the distribution of content will optimize future revenue growth. Nearly two-thirds (65 percent) of the respondents cited new platforms like mobile devices and gaming consoles as the main source of future revenue growth. And despite the economic downturn, more than two-thirds (69 percent) said their companies increased spending in their digital supply chains in 2009 in order to enhance their ability to deliver compelling content across multiple platforms.
The survey examined the impact of advances in digital technologies, business models, the economic downturn and increasing competition for consumers’ attention across several segments of the media and entertainment industry, including television, video games, film, music, radio, publishing, interactive entertainment and advertising.
New Platforms, New Areas of Growth
Survey participants indicated that traditional content distribution channels such as television, print and retail are most likely to be threatened by newer channels, including online portals, streaming media and social media.
As for the future, the executives surveyed believe that the primary sources of revenue growth in the next three years will be mobile/wireless (53 percent), and online-streaming (44 percent).
Most executives – 86 percent -- listed content production and innovation, including customization across platforms, as the most important new capability that digital technology allows, followed, at 64 percent, by distribution and access management, especially to mobile/wireless networks.
“The message from industry executives is clear,” said Marco Vernocchi, global managing director of Accenture’s Media & Entertainment industry group.  “Revenue growth in this new, multi-platform world requires media and entertainment companies to deliver the right quality and genre of content to the right consumers via the right platform. Finding innovative ways to engage consumers directly with relevant content will be the key to growth."
This Time It’s Personal
The push for more direct engagement with consumers is being fueled primarily by a fear of cross-sector competition where media groups are now competing with telecom operators, internet players, consumer electronics, retailers and other new market entrants for consumers’ entertainment time, attention and wallet. In descending order, the respondents cited fear of cross-sector competition for their customers (60 percent), declining business demand (47 percent) and structural changes in the industry (40 percent) as the top reasons for their investments in digital technology.   
“The media and entertainment industry is an increasingly complex, competitive landscape that has been under financial attack up and down its entire value chain,” said Vernocchi. “The top digital transformational goal for industry executives today is a set of consumer analytics that deliver deep customer insights to develop and target content effectively.”
While three-quarters (76 percent) of respondents agree that gathering consumer data through direct relationships is critical for business, more than half (54 percent) do not believe they are leaders in analytical data collection techniques and, a quarter of the respondents (25 percent) said their ability in this space was “poor.”
When asked how they intend to capitalize on these new, direct relationships with consumers, the executives cited three main goals: developing new offers (77 percent), shaping content production (71 percent) and gaining feedback on the content consumption experience (50 percent).   
The Imperative of a Technology-Enabled Digital Supply Chain
As a result of their investments, a third (33 percent) of the companies surveyed are now three-quarters of the way through the transformation from an analog, offline business model to an integrated, file-based digital enterprise. This represents a 12 percent increase from 2007 and 2008, when only one in five companies surveyed (21 percent) were digital enterprises.
In many cases, internal barriers are impeding digital transformation. Executives said that financial challenges (67 percent), organizational challenges (66 percent) and technological challenges (55 percent) are the most significant barriers to transforming their companies’ existing operations. Asked to hone in on specific organizational barriers, executives cited business models (65 percent), processes (61 percent) and organizational structure (57 percent) as the biggest challenges to adopting digital technologies.
“Media and entertainment companies have made some significant strides from a technical perspective, but they are now facing new challenges around their operating models”, said Vernocchi. “While it won’t be easy, it’s critical that media companies redesign their operations and processes to accommodate a more flexible, digital enterprise placing the consumer at its core.”
More information on Accenture’s 2009 Global Media Content Survey is available at www.accenture.com/2009contentstudy.
As part of its fourth annual Global Media Content Survey, Accenture surveyed more than 100 senior leaders and decision-makers in the media and entertainment industry - spanning broadcasting, publishing, film, portal, gaming, publishing, and music. The goal of the survey - which was based on in-depth telephone interviews with select executives in the United States, Canada, Mexico, the United Kingdom, France, Germany, Austria, Italy, Sweden, Dubai, India, China, Singapore, Korea, Australia, Spain and Brazil - was to identify where industry executives believe the greatest opportunities and challenges will come from over the next five years.
About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 176,000 people serving clients in more than 120 countries.  Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.  The company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009.  Its home page is www.accenture.com.
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