“Strategic Alliances Will Replace Vertical Integration” – PWC

The new report is here! The new report is here! Picture%202.png

I love this quote from the Pricewaterhouse press release for their new report on the Global Outlook for Media/Entertainment.

“We’re seeing a new business model solidify for entertainment and media companies,” said Marcel Fenez, Managing Partner, Global Entertainment & Media practice, PricewaterhouseCoopers. “Some, such as the film industry, have dabbled in this in the past, but those will be small movements compared to what lies ahead. No single company will be able to successfully go it alone over the next five years. The challenges are too significant and the demand for innovation too complete.”

I’ve always wondered how any one company could feel that it could completely succeed through vertically integrating into a market all by its lonesome. Even waaay back when i worked at HMV and it was partially owned by EMI – we used to consistently have to explain to other music companies that there wasn’t any “favoritism” toward EMI artists at HMV. The idea of companies having their own proprietary digital formats was confusing to me as well (blue matter anyone?) the recent strategy of investing in multiple companies to help grow the market for digital content and media makes so much more sense than a “we can do it all” approach. i think in order for any market to move forward there has got to be some neutral ground as well as common ground. Spotrunner is a great example of this – there are so many companies invested in its success and i think this neutral/common/partnership play is a part of its current success. When everyone can benefit its a win win for all instead of knock down drag out fight for a space that should be somewhat neutral to begin with.

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