How Divestment Empowers Media Firms
By Media Entertainment Tech Outlook | Tuesday, April 21, 2020
Divestment of assets can minimize losses for media firms while enabling them to use the revenues into customer engagement strategies.
FREMONT, CA: Media and entertainment firms are constantly striving to compete in a highly competitive world. The advancement in technologies, along with the emergence of new players, has further made it difficult for the firms to maintain their relevance among their audience base. While media firms are exploring new ways to remain relevant, they are also eyeing to divest or sell off their assets that aren’t useful or run the risk of becoming obsolete in the near future. According to a report, 80 percent of global sector media firms plan to divest in the next two years. With the line between media and entertainment, technology, and telecommunications firms increasingly blurring, convergence is most likely to propel divestment decisions in the near future.
Divestment can save media firms from significant losses when carried out thoughtfully and on a proactive basis. Further, revenues generated through divestment can be deployed to find alternative and innovative ways of engaging the audience. Thus, media firms are divesting so they can move quickly in pursuit of new growth opportunities. Companies are divesting their weak assets and utilizing funds for technology investments. Further, firms are also redeploying proceeds from their divestments in growth areas to enhance shareholder value.
Despite the above advantages of asset divestments, media and entertainment firms have remained slow in launching divestment processes. Based on a report, 65 percent of companies believed that they delayed divestment of their assets for too long when they should have divested much earlier. Media and entertainment firms are reviewing their portfolios frequently and are eyeing to combine this with taking action to ensure divestment is not delayed.
Increasingly, media and entertainment firms are realizing the necessity of asset divestment in a timely manner to counter loss and focus their energy on new technologies and customer engagement strategies.