CFO's Say Global Economic Uncertainty No Longer A Big Worry

It’s been a shaky four-year recovery since the Great Recession ended, but a new survey of media industry CFO’s from EY (formerly Ernst & Young) shows that big companies in the sector are ready to move on, believe the global recession is a distant memory and are “well positioned to grow their companies through capitalizing on digital opportunities and through investments in technology, digital talent and infrastructure as well as acquisitions and other deals."

The survey was conducted among 50 CFOs of some of the largest global media and entertainment companies, headquartered in 10 countries and representing almost $500 billion in media and entertainment revenue. In addition to Adland, the survey spanned industry sectors including filmed entertainment; broadcast and cable networks; music/radio; media conglomerates; Internet and interactive media; publishing and information services; and cable/satellite distributors. 



According to the survey, only 26% of the CFOs polled said global economic uncertainty would be a challenge during the next three years, compared to 62% two years ago, showing a dramatic decrease in concern over the economy. 

Challenges remain, and a majority of CFOs identified the greatest obstacles for the industry during the next three years as technology and platform disintermediation (64%), and an inability to persuade consumers to pay fair value for content (58%). Others identified structural and regulatory uncertainty (42%) and reductions/reallocations of marketing budgets (26%) as major challenges for the future. 

Effective use of data analytics is seen as key to driving growth. While 59% of CFOs feel their companies successfully use data to respond to and upsell existing customers, only 33% said their companies do a good job of using data to generate new business. And while only 39% of CFOs believe their organization is good at sharing data, 58% indicated that sharing data between business units would improve their organization’s overall effectiveness.  

Conversely, as data analytics become more essential to business operations, growing concerns over effectiveness and data overload also increase. The industry expects its data storage to increase from 1,100 exabytes of available data in 2010 to 8,000 exabytes by 2015. CFOs expressed concern over the increasing difficulty of identifying insights within this massively expanding amount of data. 

Top priorities for the year ahead per the survey are the evolution of digital and online distribution (74%), cost reduction and business efficiencies (34%), creatively differentiating content (32%), extending brands globally (32%) and growth in new market segments (30%). 

The top actions identified to make companies more effective are attracting/retaining talent (58%), improved IT capabilities (42%), deeper understanding of market trends, customers and competitors (38%) and getting new products to market faster (30%). 

On the M&A front, CFOs said they prefer deals that give them either complete or majority ownership (61%) instead of making investments or having a minority interest (34%). 

John Nendick, Global Media & Entertainment Leader at EY, said, “The CFOs told us in no uncertain terms that the economy is no longer an obstacle and now is the time for media and entertainment companies to invest in growth and focus on building their businesses. The industry is now poised to deliver on the promises it has been making the past several years but has been unable to achieve because of the economy. The CFOs recognize the recession is over and it’s showtime.” 

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