Over the next three years major US Media and Telecommunications companies will be revising their strategic priorities towards digital and mobile. This is a real turnaround compared with 2011, when the focus was much more on social networks.

Media and Telecoms: Digital and Mobile Seen as the Main US Growth Drivers to 2015

US-based companies in the Media and Telecommunications industries now view digital and mobile as a priority, offering a major path towards increased revenue. With the explosion in digital and mobile-related technologies, company management are planning changes to their strategic direction in order to catch the wave. These are the conclusions of a survey* carried out by KMPG LLP, the US arm of the KPMG international audit, tax and advisory network. There was a general consensus among respondents that they needed to move quickly to seize new opportunities. More than 90% of the executives surveyed expect their companies to develop aggressive strategies during the coming year in order to position the company in the various markets.

Burgeoning apps and content

Some 92% of the senior executives surveyed expect their companies to grow their activities around digital devices, services, and content distribution. While 20% of those polled pointed to emerging digital distribution methods as the likely main driver of revenue growth during the coming three years, sales of applications and content over smartphones and tablets came in 2nd and 3rd places - cited respectively by 18% and 16% of respondents - among the expected growth drivers. This is a turnaround from 2011, when these two segments were listed 10th and 8th respectively. Meanwhile social media platforms (cited by 5% of the 2012 survey respondents) and online advertising (7%) scored lower than in 2011, when they were listed among the top four main growth drivers. Nevertheless, 54% of the executives still plan to use social networks to gain customer insight, 50% expect to deploy social media for brand promotion, and 49% say they will use social channels to enhance customer engagement.

Capital investment in the pipeline

The companies surveyed appear ready to spend money in order to make this happen. Some 62% of the executives revealed that they have significant cash on their balance sheets to fund capital investments. While 17% of this group reported that investment was already well underway, the majority (54%) expect to start investing in 2013. Well over half (66%) of the respondents expect to see some improvement in economic conditions over the next year. However, 55% have pushed back their expectations for a full economic recovery in the United States until 2014 or beyond. Asked where exactly they would direct their capital spending, 56% of respondents said they would be investing in new products or services, 43% cited investment in information technology, and 32% said their main focus would be business acquisition.

*The Media and Telecommunications 2012 Outlook Survey, carried out in the United States during second-quarter 2012 among 101 senior executives from media, entertainment and telecommunications companies