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AI & M&A Lead Media & Entertainment in 2024: EY Survey Reveals Industry Trends

A recent survey conducted by the esteemed accounting and consulting firm Ernst & Young reveals that the foremost objectives for executives within the U.S. media and entertainment industry in the upcoming year revolve around the business prospects emanating from generative artificial intelligence (AI) and transactions.

The inquiry, directed at 150 distinguished board members and C-level executives alongside their direct subordinates within the U.S. media and entertainment sector, delved into their perspectives and potential strategic trajectories. The ensuing summary articulates: “Media and entertainment enterprises across North America are accustomed to the sudden advent of significant upheavals, yet perceive them as opportune moments. Nonetheless, the velocity and magnitude of forthcoming transformations in 2023 surpass the expectations of industry leaders, necessitating profound contemplation on how to navigate the forthcoming evolution.”

Of the respondents, 83% advocate for seizing merger and acquisition (M&A) prospects to realize strategic objectives, with an overwhelming 97% positing that M&A endeavors promise enduring advantages. Nevertheless, these respondents concur that paucity of capital and content rights constitutes the principal impediment to further consolidation within the media and entertainment domain.

Amidst the continuous dissemination of merger and acquisition narratives within the media landscape, particularly in Hollywood, the report explicitly asserts that “more than one-third of respondents anticipate a metamorphosis in the structural integrity of traditional media and entertainment behemoths within the ensuing three years.”

Furthermore, 33% of industry stakeholders prioritize headcount reduction as a paramount objective, irrespective of deal availability.

By the conclusion of 2023, John Harrison, the esteemed head of EY Americas Media and Entertainment, prognosticates that generative artificial intelligence will persist as the focal point of Hollywood’s endeavors in 2024. The findings from this Ernst & Young survey further corroborate that over two-thirds of respondents assert generative artificial intelligence will “expedite the content creation process.” Sixty percent of respondents anticipate a “constructive and transformative influence” on business performance within the subsequent three years. The prevailing consensus suggests that streaming, advertising, video games, and sports betting will endure as the domains most profoundly impacted by generative AI.

EY contends that amidst the persistent flux and impending “significant disruption,” executives possess the opportunity to “capitalize on opportunities and fortify their enterprises,” with nearly 50% of media and entertainment entities concurring that implementing artificial intelligence solutions constitutes a critical imperative. EY analysts expound further in the report annotations, stating, “Our survey underscores the concerted efforts of media and entertainment firms in optimizing their content and media portfolios, seeking pivotal insights through artificial intelligence (AI) and generative artificial intelligence (GenAI) to foster confidence in growth while upholding resilience. Additionally, the quest to ensure future profitability and sustainably reduce costs through continued integration, forging novel partnerships, and streamlining operations remains a paramount concern for industry executives.”

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