industry issues

Media and Entertainment challenges

There are a number of challenges that are specifically affecting the media and entertainment industry, many of which have happened as a result of the recent economic downturn. It is therefore more important than ever to ensure that you extract as much value from your accounting operations as possible, which can only be achieved with the help of a specialist accountant.

Managing in a downturn

Faced with the most unprecedented economic conditions in living memory, the issue of improving the financial position of a business, whether through cash generation, debt refinancing or cost reduction, has risen to the top of the boardroom agenda.

Attracting and retaining customers

In today’s entertainment and media market, content owners and distributors are competing not only to attract new customers, but also to build loyalty and retention rates among existing customers. Subscription-based operators are constantly developing strategies to maintain and grow the average revenue per user through customer retention, process improvement, and product innovation.

In the wider sphere, across the E&M landscape cable and satellite TV operators, broadcast and cable networks, cinema owners, newspaper and magazine publishers, and Internet portals are struggling to enhance their customer care and management operations. Companies are seeking to derive value from the entire customer management value chain, from database interrogation to inform and drive marketing and cost-reduction strategies, to development of powerful people and systems strategies which can deliver the highest level of customer service.

That’s why technological advances and functional improvement programs alone aren’t enough. You need a way to improve your processes and the organisation supporting those processes to achieve performance results which will benefit and be recognised by those who count the most — your customers and stakeholders.

Making the most of mergers and acquisitions

Few major entertainment and media companies can achieve their desired geographic breadth and diversity of operations and revenue streams purely through organic growth. Mergers, acquisitions, alliance will continue to be necessary to enhance growth and to balance the business portfolio effectively between advertising, subscription and consumer product revenues. At the same time, convergence is driving deals between old and new media, and between delivery and content companies, whilst value is also being sought through deconsolidation.

Financial reporting of key metrics

When it comes to the quality and depth of reporting on key financial and operating metrics, it’s more important than ever for companies to meet and exceed stakeholder expectations.

A growing body of evidence indicates that companies that fall short of shareholder expectation with regard to disclosure risk an erosion of confidence that can, in turn, do damage to market capitalisation, credit, and liquidity. But along with negative pressures, there are also positive reasons for going transparent. Your company’s non-financial assets — such as brands, market share, customer retention levels, and intellectual capital — are of intense interest to investors. Companies that report more comprehensively on these important non-financial assets can often improve their valuation in the capital markets.

Tax issues related to content sales and international operations

As entertainment and media companies expand their operations and distribute content globally, they face increasingly complex tax issues that can act as a drag on operations and depress profitability.

Clearly, many companies in the entertainment & media industry require support to achieve optimal corporate tax rates and implement effective tax planning and management. Whether they are facing issues related to the taxation of Internet sales or transfer pricing on the sale of content rights internationally, companies need service providers with the tools and knowledge to optimise their tax strategy.

Managing and protecting content rights and royalties

Entertainment and media companies are facing a host of challenges surrounding intellectual property rights, piracy, security and digital rights management (DRM). With pervasive digitisation of content, entertainment and media companies must develop strategies that embrace digital distribution. But to implement these digital content distribution systems effectively, entertainment and media companies need decision frameworks and operational processes that enable them to control their content over the Internet in terms of security, usage tracking, and how their content is consumed.

Reducing costs and enhancing efficiency in core business operations

Entertainment and media companies face intense pressure to reduce costs associated with ongoing operations and, in some cases, debt loads associated with transactional investments. Companies are looking to reduce costs in their core businesses without sacrificing service quality and jeopardising revenues. At the same time, executives are being challenged to meet customer requirements while continuing to scale.

Free no obligation financial review

With our help you will be better equipped to manage with any changes that take place, both legislative and of your own choosing.

Contact taylorcocks to discuss the industry issues in media and entertainment.