UGC Is Top Threat to Media and Entertainment Industry

April 23, 2007

This article is included in these additional categories:

Media & Entertainment | Radio | Social Media | Television

Media and entertainment senior executives say the biggest threats to their business are the growing ability and eagerness of individuals to create their own content, according to the results of an annual Accenture survey.

Some 57% of respondents identified the rapid growth of user-generated content – amateur digital videos, podcasts, mobile phone photography, wikis and social-media blogs – as one of the top three challenges they face.

More than two-thirds (70%) said they believe that social media, one of the largest segments of user-generated content, will continue to grow; only 3% said they view social media as a fad.

The changing landscape offers opportunities as well as challenges, according to the study: 68% of respondents said they believe that within three years their businesses will be making money on user-generated content; and 62% said they believe their companies will make money through advertising and sponsorships of social media.

However, a quarter (24%) of respondents said they do not yet know how their businesses will profit from user-generated content. Other sources of profits cited were subscriptions (21%) and pay-per-play offerings (18%).

The executives surveyed in 2007 showed greater optimism that content would be driving their revenues than those surveyed last year: 32% of respondents in this year’s survey said so, compared with only 21% of 2006 respondents.

Asked to identify which type of content offers the highest growth potential for their industry over the next five years, the greatest number of respondents – 53% – cited short-form video, followed by videogames (13%), full-length film (11%), music (11%), consumer publishing (9%) and business publishing (4%).

“Traditional, established content providers will have to adapt and develop new business and monetization models in order to keep revenue streams flowing. The key to success will be identifying new forms of content that can complement their traditional strengths,” said Gavin Mann, digital media lead for Accenture’s Media & Entertainment practice.

The study included interviews with industry giants like Roger Faxon, chief executive of EMI Music Publishing; Leslie Moonves, chief executive of CBS; Doug Neil, senior vice president of digital marketing for Universal Studios; and Sir Martin Sorrell, chief executive of WPP Group PLC.

As part of an annual study to examine the growth strategies of companies in the media and entertainment industry, Accenture surveyed 110 senior executives at advertising, film, music, publishing, radio, Internet, videogame and television companies in North America and Europe. Approximately 60% of the respondents were from North America (the United States [and Canada]), with the remaining 40% from Europe (Austria, Belgium, Spain, Italy, France, Germany, Switzerland and the United Kingdom). The survey was fielded for Accenture in North America and Europe by The BPRI Group during the first quarter of 2007.

Accenture is a global management consulting, technology services and outsourcing company.


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