Article by By Larry Johnson (Global Director, Media & Entertainment – Oracle)
I’m a movie junkie. I went to UCLA film school, did graduate work in media studies, and early on worked as a development executive at 21stCentury Fox. Most weekends I see three or four movies in theaters.
Now I work in technology, and I’m witnessing firsthand its transformative effect on the media and entertainment industry. Technology is enabling the democratization of content—access any time, anywhere, on any device—and the impact on media and entertainment company business models and consumer interactions is deep and far-reaching.
Recently I spoke with media and entertainment expert Jukka Paajanen, a cloud solution hub senior director at Oracle, about the opportunities and challenges emerging technology presents to the industry. Here are excerpts from our conversation:
Disney announced strong second quarter results for fiscal year 2018, topping Wall Street expectations. The entertainment giant reported a 9% year-on-year quarterly revenue increase, while earnings per share jumped 23%. This growth was fueled by its Parks division and Studio Entertainment segment, in particular the success of blockbuster movies such as Marvel’s ‘Black Panther’ and ‘Avengers: Infinity War’. Disney’s Studio Entertainment is set to keep the blockbuster titles coming over the next few years, which will be of vital importance when Disney launches its direct-to-consumer offering in 2019. The company’s cable segment, which includes ESPN, saw operating income drop 6%, partly due to costs associated with the new streaming service ESPN Plus.
For traditional broadcast and media companies, the main driver of this trend is the need for scale to effectively compete with big-budget tech companies. Additionally, broadcasters and media companies need to address changing viewing habits, especially in younger audiences, which demand more flexible and responsive business models.