The global financial crisis has wrought havoc on the media and entertainment industry, especially the sectors most dependent on advertising and consumer spending. Before the crisis, many media companies were already suffering through profound shifts in their businesses. Traditional media audiences were shrinking, and digital revenue was not growing fast enough to make up the difference. The economic meltdown over the past six months has exacerbated these issues dramatically. Major marketers in such big-spending advertising categories as financial services and automotive are fighting for their very survival, and those in other sectors are closely reexamining their media mix too. Worst of all, consumer confidence is at its lowest level in decades.

• The structural challenge: Media companies have not yet figured out how to deal with the enormous structural pressures confronting them – mainly, the growth of digital media, which will be accelerated during the downturn.
  

• The next generation of media sales: In today’s market of ad inventory oversupply, media sales teams need to change their relationship with clients from that of media vendors to higher-value marketing partners. New approaches are also required for media sales management; companies need to sell both premium inventory and less differentiated offerings more cost-effectively.
  

• Fundamental cost transformation: Media companies should take advantage of current challenges to undertake urgent, energetic efforts to reshape their cost structures. The starting point would be to shed struggling analog businesses that may be solvent today but have limited upside in the future.
  

• A focused acquisition agenda: With some overleveraged media companies compelled to sell assets, there will be more opportunities for players with strong balance sheets to pursue acquisitions. A key target in particular will be digital media and related technology startups no longer flush with financing.
  

• Connecting innovation to monetization: A harsh economic climate does not mean the end of innovation. Marketers are demonstrating that they will pay for media environments that deliver an engaging experience to a targeted audience and move consumers closer to a purchase.

Download "Game Not Over: How the Media and Entertainment Industry Can Survive the Downturn."