Showbizreporting's Blog

July 22, 2009

SAG USA

Filed under: Entertainment — showbizreporting @ 11:55 pm
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Subject: Some Thoughts from Insiders on the state of Digital Media

13 july, 2009 – Over the next five years, digital technologies will become increasingly widespread across all segments of entertainment & media (E&M) as the digital migration continues to expand according to the PricewaterhouseCoopers Global Entertainment & Media Outlook 2009-2013. Though the current economic downturn has, without doubt, impacted virtually every sector of the E&M marketplace it has also accelerated and intensified the digital migration among both providers and consumers of content.

_The digital migration

However the economic downturn does not change the underlying drivers for digital migration and will more likely influence their pace and power and hence the timing of industry change. In short, making it more difficult to hide from the digital migration.
During the period under review, the switch to digital will drive divergences in revenue performance between different segments and geographies. Change will impact the managing of brands, characters, titles and talent across distribution platforms supported by new commercial models.

The case for digital migration, however, will continue to vary across geographies depending on the availability of efficient and cost-effective broadband and mobile infrastructure.

Marcel Fenez, Global Leader Entertainment & Media practice, PricewaterhouseCoopers, said: “In some ways this could be called “the perfect storm”. Inside every cloud is a silver lining and in this case, a digital one. Companies who grasp the opportunities which are  appearing in this fast changing marketplace and are agile enough to adapt their business models will be able to take full advantage of the potential and new revenue models as they emerge.”

_Consumer behaviours
The accelerated migration to digital technologies has reinforced and proliferated new consumption habits and “digital behaviours” as consumers seek more control over where, when and how they consume content while, more than ever, watching the pennies and seeking the best value from the choices they make. The advances in digital are enabling this with ease.

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Tapping into the massive collective buying-power of online communities is an increasingly central focus of consumer marketing campaigns globally. However, companies are still struggling to adapt their current business models to ensure that they are monetizing their digital content and capturing the revenues.

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However, the migration reinforces the need for greater transparency and accuracy over audience metrics which together with accountability for ad results, is becoming a “must have” in this new media world. An ability and willingness to collaborate with partners on revenues to open up and exploit new areas, and ongoing cost-sharing to operationalise the shared benefits will also be vital. Going forward the successful models will be those that provide enough product differentiation from free or low-cost substitutes to generate revenue from either consumers, advertisers or, more likely, both.
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