Over the past two decades Entertainment and media (E&M) CEOs have witnessed tremendous transformation – primarily driven by globalisation and technological evolution. Our 20th Annual Global CEO Survey reveals that their concerns centre on changing consumer behaviour, the availability of key skills, and volatile energy costs. Despite these concerns E&M CEOs are more optimistic about economic and business growth over the next year. To respond to changing consumers’ needs, E&M CEOs need to understand how economic, technological, and human capital forces are impacting the user experience and driving change within the entertainment and media industry.
This year’s survey reflects increased optimism among E&M CEOs about the prospects for economic growth. Thirty-five percent of E&M CEOs believe the global economy will improve over the next 12 months, which is up from 22% last year and higher than the global CEO population. In addition, E&M CEOs are also more optimistic about their own company’s growth prospects. Thirty-three percent of E&M CEOs (vs. 26% last year) are "very confident" about their company's business growth prospects in the next year. Key areas of growth within the entertainment and media industry, include the growth of streaming and video-on-demand (VoD) services, improvements in content discovery, and the rise of mobile video.
E&M CEOs understand the near-term benefits of business transformation, but they also must consider the long-term impact to their business. E&M leaders have grown far more concerned with changing consumer behaviour – 81% are concerned compared with 76% last year. For instance, emerging technology (virtual reality, wearable tech, and artificial intelligence digital assistants) is impacting how content is created and distributed. In other research (see our global entertainment & media outlook 2017-2021), we see spending on internet advertising has maintained its momentum, as consumer demand for internet access continues to grow globally, and high-speed mobile connections become increasingly available and affordable in developing markets. The availability of key skills and volatile energy costs are the second and third top threats among E&M CEOs.
“The world is changing as innovations for human life and knowledge generation are accelerating. Many intractable problems facing people are now being resolved. What might have taken ten years in the past, now only takes one year. We can feel the pace of change accelerating, although growth in our lifetime will be relatively slow. If our lifespan increases from 70 years to 100 years, we will feel the changes of the world more because we really do not know what the world will be like in 2030.”
To capitalise on new opportunities, organisations must have the right capabilities in place. E&M CEOs see ‘digital and technological capabilities’ and ‘innovation’ as their top two areas of focus. Additionally, many E&M CEOs believe that technology will completely reshape competition in their industry over the next five years: 56% of E&M CEOs vs. 23% of all CEOs in the study. Technological advancements are requiring companies to rethink transactions, business models, and capabilities. By balancing agile and lean practices in innovation, companies can take steps forward and expand their media capabilities. In a strategy+business article, ‘You’re a Media Company. Now What?’, PwC’s John Sviokla and Deborah Bothun explain that “the battle for the consumer’s attention has become brutal, and requires new strategies and capabilities. Companies across many sectors are reaching the same conclusion: We all have to be in the media business.”
Seventy-eight percent of the E&M executives say that they are concerned about the availability of talent. E&M CEOs ranked ‘Leadership’ as the third most important skill for the E&M industry and view it as the hardest skill to source. ‘Creativity’ is the second-most difficult skill to find. As technology, data, and analytics become more powerful, expanding the use of automation, executives will need to think through which human tasks are being assisted or augmented by emerging technologies – and which ones are being replaced. Forty percent of the E&M executives say that, over the next five years, headcount will decrease to a large extent as a result of automation and other technologies. That number compares to just 25% for all CEOs in the study. The result is conundrum for E&M CEOs; the hardest skills to find are those that can’t be performed by machines and yet the E&M industry is expected to lose more jobs to technology than most other sectors.