Capital and growth strategy focuses on digital transformation in the media and entertainment industry, to accelerate organic growth
M&E CEOs need to invest to secure future opportunities. For nearly half (49%), investments in digital transformation and existing businesses to accelerate organic growth and value creation are critical to their plans.
M&E companies need to improve customer-facing technologies and experiences to drive engagement and respond to shifting consumer preferences. This industry trend holds true in all media subsectors, including entertainment, advertising, cable, publishing, sports and live events, and information services. Specific focuses are on data and analytics capabilities to enhance decision-making and employee technology enablers, such as collaboration tools to support emerging hybrid working frameworks.
There has been a slight shift in the CEO capital allocation approach to longer-term investments in new growth options that may become important in the future if they succeed. Examples include experimentation with non-fungible tokens (NFTs), augmented and virtual reality (AR and VR), as well as metaverse concepts. The advertising subsector is also piloting innovations that include new measurement methodologies and technologies.
There’s a strong belief by 60% of M&E CEOs that investors are extremely supportive of well-articulated investments. CEOs are placing increasing emphasis on delivering a roadmap for returns on major investments, most notably in streaming.
To protect and improve profit margins, 30% of M&E CEOs surveyed say they plan to leverage digital platforms to increase customer interactions, building on a long trend of infusing technology deep into the customer experience. Already, the media and entertainment industry trend is about direct-to-consumer transition to provide media companies with new pathways to increase and monetize engagement. More than a quarter (27%) indicate they will use technology and automation to replace higher-cost labor roles and improve scalability. For these M&E CEOs, their underlying motivation is to reduce expenses and unlock capital to redeploy into growth initiatives.
As M&E CEOs look ahead to growth expectations over the next five years, 27% expect their strongest source of growth to be using data effectively to develop new products and services; 26% say it will come from developing innovative delivery systems and channels for interacting with customers.