2007 Australia - Digital Media - Overview and Statistics

Publication Overview

This report provides high-level overviews and strategic analyses of the developments in digital media. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions.

The subjects covered in the report include:

  • The Market in 2007
  • Global Internet Economy
  • Analyses of the Media Industry
  • Government Plans and Policies
  • Consumer and Business Market
  • Industry Business Models
  • Market Strategies
  • Revenue Opportunities
  • Advertising Statistics, Analyses, Overviews and Revenues

Executive Summary

In 2006 BuddeComm’s best seller was our new report on digital media developments.

This year we have produced four reports on this topic, an indication of the enormous developments that are taking place in this market.

Looking at the US market it is interesting to note that most investment money in the industry is flowing into the digital media rather than the telco market. The latter are struggling to upgrade their networks to keep up with the demand that the digital media are generating.

Government policies are also shifting focus. In the developed world governments are beginning to move their policy-making away from access regulations to the development of the digital media. They are struggling to move the many pilots and trials being conducted in the healthcare, education and energy sectors into full-blown commercial operations. Organisations in these sectors are renowned for being slow movers when it comes to making structural changes.

Broadband is producing a major mind-shift. Decision-makers are beginning to realise that broadband has little to do with high-speed Internet – that the key benefits rest in providing the infrastructure needed for e-health, tele-education, smart energy metering and so on.

This report gives an overview of all the major changes that are taking place in this environment, where a range of markets, industries and technologies are converging. We also discuss the impact change is making on these industries.

Key Highlights

  • Government policies are shifting away from regulating telecommunications access towards the development of digital media applications in e-health, education and energy saving.
  • These new applications, based on video communication and telepresence, require massive investments in broadband networks.
  • Entertainment will drive the initial phase of the digital media revolution. The telcos and ISPs had a head start in this market but they failed to cash in on it, and the media companies are in control again, using their traditional media to launch entertainment, news and sporting events that are then complemented with a range of digital media applications.
  • However the Internet media companies continue to lead the market. They are setting the time and the pace, and the rest of the market is struggling to keep up. They may kick and scream and sue, but in the end they will have to fall in line, as happened in the music industry.
  • The leaders are Google, YouTube, MySpace, Skype, Second Life, Flickr, Yahoo, MSN – and also, especially in the non-anglo countries, a number of local companies.
  • The digital media developments have also made a big impact on traditional business models, marketing and advertising. This is a new era, with people power, and companies will need to follow their customers.
  • Gone are the days when companies could adopt a ‘take-it-or-leave-it’ approach; they will have to come up with business models that suits their customers, not their own purposes.
  • In this initial stage advertising models will generate a large part of the revenue, followed by subscription fees to the Internet media companies for the premium services they offer on top of the free services.
  • Between 10% and 15% of the annual advertising spend is flowing from the traditional media over to the new media. This has already reached the $1 billion mark in Australia.
  • Local companies include: Sensis, Fairfax Digital, Seek, Legion, Blue Freeway, Destra, Hyro and Photon.

Online advertising revenue and forecasts

Year Revenue ($ million)
2003 200
2004 300
2005 620
2006 1,000
2007 (e) 1,400
2008 (e) 1,800
2009 (e) 2,300
2010 (e) 3,000
(Source: BuddeComm www.budde.com.au)

This report provides high-level overviews and strategic analyses of the developments in digital media. It identifies business opportunities, points out the hype and the pitfalls, and it will be of assistance in making the right business decisions. Further information provided:

  • Analysis of the traditional media industry – these companies will remain key players in the market, but they do need to change quite dramatically.
  • The government plans and policies – significant changes are taking place in the direction of digital media applications.
  • The digital consumer as opposed to the digital market – business and consumer issues are analysed.
  • Digital media advertising revenues will triple over the next four years – who are the key contenders and what their market shares are.

Table of Contents

1.THE MARKET IN 2007
1.1Introduction
1.2Convergence at work
1.3The Internet
1.3.1The killer app
1.3.2High-speed, always-on Internet
1.3.3It’s worthwhile fighting for open networks
1.4Digital content
1.4.1Introduction
1.4.2Watch out for the Internet media companies
1.4.3Internet media companies –vs- telcos
1.5The disruptive effects of digital media
1.5.1Introduction
1.5.2Copyright becomes an issue
1.6Latest developments digital convergence
1.6.1Introduction
1.6.2Broadband and TV – not converging, but complementary
1.6.3VoD – missed the boat
1.6.4Every site needs its own YouTube
1.7Developing markets
1.7.1User Generated Content (UGC)
1.7.2Social networking
1.8Telcos and media vs Googles
1.9Internet economy
1.9.1Market overview
1.9.2Internet economy analysis
1.9.3E-commerce overview
1.9.4Internet economy statistics and forecasts
2.ANALYSIS OF THE MEDIA INDUSTRY
2.1TV broadcasters
2.1.1The role of the broadcasters
2.1.2Hanging on to the past
2.2Radio broadcasters
2.3Newspaper publishers
2.3.1Industry failed to see changes
2.3.2Dumbing down the media
2.3.3Plenty of digital media opportunities
2.3.4Multimedia news
2.3.5Structural changes
2.3.6Publishers need to move into the new media faster
2.3.7Rear mirror strategies
2.3.8Competition from the Internet media
2.4The video and DVD rental companies
2.4.1The end of the video store?
2.4.2DVD rental companies
2.4.3DVD rentals over the web
2.5Film and video producers
2.5.1A few statistics
2.5.2ABC digitises archives
2.5.3The Broadband Cross-Media Production Initiative (BCPI)
2.5.4The Film Australia Library
3.GOVERNMENT PLANS AND POLICIES
3.1New policy directions
3.1.1From access to digital media policies
3.1.2Government services difficult to get moving
3.1.3Government has an orchestrating role to play
3.1.4Australian – Netherlands digital media exchange
3.2Prelude to new digital media policies
3.2.1Government media review
3.2.2Government review by House of Representatives in February 2006
3.3Proposed media reforms
3.3.1Overview
3.3.2New services on spare spectrum and other platforms
3.3.3Multichannelling and anti-siphoning
3.3.4Media ownership and control
3.3.5Regional services protection
3.3.6Cross media ownership laws
3.3.7Final version of the media reforms
3.3.8Media reform legislative process
3.4Finalisation of new media reforms
3.4.1Summary
3.4.2TV Channels A and B for digital services
3.5IPTV regulations?
3.6Policies and regulations – 1996 - 2006 - historic
4.MARKET OVERVIEW AND STATISTICS
4.1The digital consumer
4.1.1The future is digital people, not digital media
4.1.2Digital migrants
4.1.3The multimedia consumer
4.2Consumer profiles
4.2.1Switched-on cybers
4.2.2Digital absorbers
4.2.3Tech pragmatics
4.2.4Techno learners
4.2.5Digi-nots
4.2.6Consumer interests
4.3Digital Media in Australian homes – 2006 survey
4.4Canon Digital Lifestyle Index
4.4.1Introduction
4.4.2Increased spending on digital media
4.4.3Key findings
4.4.4The disruptive effects of the digital media
4.5Customer loyalty
4.5.1Emagine
4.5.2Loyalty until the next deal
4.5.3Customer segmentation
4.5.4Effectiveness of loyalty programs
4.5.5Customer value management
4.6The interactive broadband map for Australia – update 2007
4.7Industry business models
4.7.1The role of the telcos
4.7.2The role of the broadcasters
4.7.3The role of the content providers
4.7.4The role of the IT industry
4.7.5Triple play business models
4.7.6Internet economy based business models
4.8Market strategies
4.8.1Internet companies taking over the bat
4.8.2The multimedia consumer
4.8.3The key drivers of growth
4.8.4The role of service providers
4.8.5Customer loyalty
4.8.6Permission-based marketing
4.8.7Advertising
5.REVENUE OPPORTUNITIES
5.1Emerging digital media
5.2Measuring digital media revenues
5.3How to make money in the digital media
5.3.1Plenty of money to be made
5.3.2User is consumer, producer and programmer
5.3.3Digital media: a moving target
5.3.4Models need to be built around free user experiences
5.3.5Money to be made in infrastructure
5.3.6DRM: outmoded way of doing business
5.3.7Many ‘kings’ in digital media
5.4Digital media – revenue predictions
5.5The key drivers of growth
6.ADVERTISING, STATISTICS, OVERVIEW, REVENUES
6.1The online advertising market
6.1.1Marketing issues
6.1.2Costs advantage of Internet advertising
6.1.3Changes in web advertising
6.1.4Web advertising goes mainstream
6.2Advertising statistics and revenues
6.2.1Revenue statistics
6.2.2Online takes bigger advertising share
6.2.3Online advertising market tops $1 billion mark
6.2.4PwC’s four year predictions to 2010
6.2.5Search advertising revenues
6.2.6The CEASA Report – 2006
6.3Advertising and the digital media – analysis
6.3.1Infrastructure bottleneck in Internet economy
6.3.2New technologies, same customers
6.3.3Permission-based models
6.3.4Advertising industry needs to go digital
6.3.5Traditional media were missing in action
6.3.6Broadcasters are too broad
6.4Digital marketing companies
6.4.1Introduction
6.4.2Blue Freeway
6.4.3Brand New Media (Destra)
6.4.4Hyro
6.4.5Photon Group
6.5Dubious ‘advertising’ tactics
6.5.1Mouse-trapping
6.5.2Spawning
6.5.3Spam
7.GLOSSARY OF ABBREVIATIONS
Exhibit 1 – Some application bit rates
Exhibit 2 – Drivers of high-speed Internet
Exhibit 3 – Examples of social networking websites – 2006
Exhibit 4 – Implications of ending net neutrality
Exhibit 5 – Dutch digital media policies
Exhibit 6 – Digital media reform – current rules and key proposed changes
Exhibit 7 – Fixed networks – 2007
Exhibit 8 – Wireless networks – 2007
Exhibit 9 – Secondary technologies – 2007
Exhibit 10 – Multimedia/hybrids technologies – 2007
Exhibit 11 – Media centre devices
Exhibit 12 – Telecommunication convergence
Exhibit 13 – Digital media marketing commandments


Table 1 – DSL, 1Gb/s, DWDM transmission speeds – what does it mean?
Table 2 – B2B global revenues – 1998 - 2005
Table 3 – US online spending revenue for top 4 product types – 2006
Table 4 – DVD sales – 2002 - 2006
Table 5 – Switched-on cyber demographics
Table 6 – Digital absorber demographics
Table 7 – Tech pragmatic demographics
Table 8 - Techno learner demographics
Table 9 – Digi-not demographics
Table 10 – Percentage of household use by application or platform – 2006
Table 11 – Frequency of device used for downloaded content – 2006
Table 12 – Main drivers for DTTB* adoption – 2006
Table 13 – Is digital FTA TV available to households in your area?
Table 14 – Awareness of analogue switch-off – 2005 - 2006
Table 15 – Digital media spending by product category – 2nd half 2005
Table 16 – Digital media % total telecoms spend – 2000; 2005; 2010; 2015
Table 17 – Estimated value of digital media market – 2005; 2010; 2015
Table 18 – Online users and other media usage
Table 19 – Online advertising revenue and forecasts – 1997 - 2010
Table 20 - Market shares key online advertising markets – 2005 - 2006; 2010
Table 21 – Market shares by major players – 2005 - 2006
Table 22 – Online advertising by classification – 12 months to December 2006
Table 23 – Online advertising by classification – six months to December 2006
Table 24 – Total media sector ad revenue – 2004 - 2006
Table 25 – Media sector ad revenue for 2006 & projected changes for 2010
Table 26 – Paid search advertising revenue by company – 2005 - 2006; 2010
Table 27 – Advertising spending by media sector – 2005
Table 28 – Ad revenue forecasts by media sector – 2006

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Annual Publication Profile

Technologies

Digital Media
Regulations & Government Policies
Strategies & Analyses (Industry & Markets)
Telecoms Infrastructure

Number of pages 99

Status Archived

Last updated 4 Apr 2007
Update History

Analyst: Stephen McNamara

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