MUMBAI: An Ernst & Young report has revealed that 73 per cent of CFOs from the world‘s largest media and entertainment companies are buoyant about revenue opportunities presented by online and mobile platforms.
This year, total home video and music end-user spending, including digital and physical products, is estimated to be $28.5 billion compared to $36.4 billion in 2006.
By 2012, the report discloses that the average per-unit price of video and music content will decrease by almost 25 per cent from the 2009 prices. This follows a 12 per cent price fall in video and 55 per cent in music from 2006 to 2009.
For its report ‘Poised For Digital Growth: Preserving Profitability In Today‘s Digital World‘, the world‘s leading professional services organisation surveyed CFOs from 75 leading media firms.
The survey found out that there was a consensus among CFOs that the industry must decide if and how much they can bundle media content and then settle on appropriate pricing.
Says Ernst & Young global media and entertainment leader John Nendick, "The phenomenal proliferation of digital entertainment among consumers continues to challenge media and entertainment companies. Revenues are dropping due to the unbundling of media and the reduction of per-unit pricing, challenging CFOs to identify innovative ways to reach their financial objectives."
"However, as the demand for digitally delivered entertainment continues to increase significantly, CFOs feel optimistic about revenue potential," Nendick adds.
Of those surveyed, 56 per cent indicated that process improvement would be the greatest opportunity for savings during the couple of years.
The report also notes that CFOs are continuing to cut costs in a bid to improve profitability, including outsourcing more activities.
