2007 Australia - Digital Media - Overview and Statistics

Last updated: 4 Apr 2007 Update History

Report Status: Archived

Report Pages: 99

Analyst: Stephen McNamara

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Summary
Table Of Contents

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)

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.


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