‘Major Business Model Change’ Top Priority for Media Company Executives

Michelle Remo, “Big 4″ observer
February 29, 2012 /

43% of media companies in Europe and the Middle East say that preparing their organization for “major business model change” is currently their top business priority, according to a survey of senior executives. The research also reveals that no other sector is undergoing such a major transformation of their business. KPMG’s Business Leaders Survey polled almost 3,000 senior executives across 31 countries and 18 sectors.

David Elms, KPMG’s head of media comments: “The media sector is in flux like no other industry. The switch to digital distribution models represents a fundamental structural change and for traditional media companies that switch is a real challenge. What is the business model for the digital world? Which one will work? At the moment no one knows, no one has a silver bullet. But one thing is clear, businesses need to reengineer how they work and must embrace new and constantly evolving platforms, or risk failure.”

According to the survey the top five issues for businesses in Europe & the Middle East are:

Changing business operations to realise cost efficiencies (43 percent – media companies 40% )

Improving cash and working capital management (32 percent – media companies 34%)

Exploiting growth opportunities through successful transactions (30 percent – media companies 21%)

Preparing the organisation for major business model changes (25 percent – media companies 43%)

Managing, developing and retaining the right people within the organisation (24 percent – media 23%)

The overwhelming majority of respondents from the media sector (88%) said that accessing content via mobile devices represents a key opportunity to monetize content. However, executives were divided over whether a ‘freemium’ model is more effective for monetising media content (55%) or whether a rigid paywall subscription model will prevail (45%).

David Elms comments: “The growth of mobile consumption of content is accelerating at a far faster pace than previously thought and predicted. The opportunity to produce content that people want to consume on the move is greater than ever before. What we are seeing at the moment can best be described as ‘mixed ecology’, with different business models being tried and tested. Many models that exist now will have fundamentally changed in 12 to 18 months.”


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