2007 Global Digital Media Volume 1 - Industry Convergence Continues

Publication Overview

This annual report offers a wealth of information on the worldwide Digital Media industry, and includes analyses, statistics, trends and forecasts. The report also includes an overview of regional developments.

Subjects covered include

  • Transitioning to a digital industry, including convergence;
  • Industry business models, including triple play;
  • Marketing strategies;
  • Internet media companies;
  • Changes to traditional media;
  • Advertising strategies and revenues;
  • Permission-based marketing;
  • Digital media in the business market;
  • Regional overview.

Executive Summary

The convergence between telecoms, media and IT saw the arrival of Digital Media, and in 2007 we are beginning to see a clearer future for its direction. Led by high-speed access to the Internet, new ranges and applications for Digital Media are developing. This in turn is stimulating other industry sectors to change their business models, including the traditional media and telecommunications companies.

Some convergence will continue to take place now, but other forms will wait until open networks based on Next Generation Networks (NGN) and fibre become available over the next 10 years. In the meantime, supplementary as well as converged services will continue to be introduced.

For more information, see chapter 1, page 1 and see chapter 2, page 12.

It is the Internet companies such as Google, Yahoo!, eBay, AOL, Microsoft, News Ltd and Amazon, which by evolving their services and capabilities are forcing the industry to change. They are breaking down the old business models which were mainly built around monopolistic market structures.

Traditional media companies have realised they can longer treat the Internet simply as a fad; the reality is that these developments are well and truly eating into their businesses. The industry has had no choice but to finally moving in more innovative directions. The telcos will also need to work hard to keep up, as they too have lost the lead they had in the market for the last five years.

The focus is moving towards content and applications, and this requires a change in marketing strategies. The market is now moving from supply driven (telco) to demand driven (Internet), and those with the best marketing and customer service capabilities will win; technologies are rapidly becoming commodities. Convergence will inevitably lead to a structural separation between infrastructure and media players.

Triple play is the first telecoms derived business model designed to deliver some the newly integrated products. However triple play models themselves have so far not lived up to expectations. While there have been some positive developments in countries such as France, Italy and Hong Kong; by and large it has not been the success story that was anticipated. It is the Internet media companies that are now setting the trend and the business models emerging from their stables will become far more important in the future.

For more information, see chapter 3, page 21.

A key to success in the new era of digital media revolves around advertising. New advertising business models are now emerging, giving the industry the confidence to begin changing their more traditional models. The phenomenal growth in online advertising revenues is also a driving this trend.

For more information, see chapter 6, page 63.

More and more businesses are also increasing their e-activities. This includes e-trading, website marketing, transactions, email and other forms of related communications. Digital Media, such as videoconferencing, is now playing a vital role in many companies’ day-to-day operations, and new developments such as telepresence are also beginning to infiltrate.

For more information, see chapter 7, page 80.

Key Highlights:

  • In order to maintain their positions and compete in the new market, leading Hollywood players have digitalised their collections, and in some cases set up online content distribution services. Others have established partnerships with existing content distributors and packagers, and the content is promoted and sold over the Internet or even mobile.
  • Current broadband developments will finally lead to the much-vaunted phrase ‘Interactive Multimedia’, and this in turn will bring one-to-marketing opportunities based on video communications and interactive digital TV networks.
  • It is expected that by 2015, 65% of all New Media revenues will be based on permission based marketing.
    For more information, see chapter 6.2, page 75.
  • Search services are central to almost everything that users do online, and this places leading search companies such as Google and Yahoo! at an advantage in the new market. Google is the industry leader, dominating the worldwide search market with around a 60% market share.
  • The value of search services also became evident with Microsoft launching its own search engine ‘Live Search’, and Amazon its ‘A9’ search engine. Traditionally known as a web encyclopaedia, Wikipedia is also attempting to move into the market, with the proposed launch of a search engine in 2007.
    For more information, see chapter 4, page 45.
  • User Generated Content (UGC) will see the largest growth this year; video-based consultancy, monitoring and communication services will also see significant growth.
  • The USA continues to play a leading role in the development of new digital media markets, being home to many of the global digital media giants such as Microsoft, Google and Yahoo!.
  • In 2010 over $2 billion will be spent on social network advertising in the US.
  • Cable TV is set to play a pivotal role in China’s converged media environment, as triple play services - which include the provision of television, telephony and broadband Internet access over a single network - begin to be delivered over cable TV infrastructure. China has the largest cable TV network in the world.
    For more regional information, see chapter 8, page 88.

Table of Contents

1.1Overview & analyses of digital media
1.1.2The rise and rise of the Internet economy
1.1.3The future is digital people, not digital media
1.1.4Convergence delivering results
1.1.5The Internet
1.1.6Digital content
1.1.7Probing for demand
1.1.8The disruptive effects of digital media
1.1.92007, a new stage of growth for digital media
2.1Transitioning to Digital Media
2.1.2The most important telecoms transition issues appearing from our models and scenarios
2.1.3New kinds of innovations
2.1.4What may be next after WMesh+fiberMAN
3.1Industry business models
3.1.1The role of the telcos
3.1.2The role of the broadcasters
3.1.3The role of the content providers
3.1.4The role of the IT industry
3.1.5Broadband Service Providers (BSPs)
3.1.6Internet economy based business models
3.2Triple play
3.2.2Overview of triple play
3.2.3Bandwidth requirements for triple play
3.2.4What went wrong with triple play? Analyses 2007
3.2.5Multiple play could lead to decline in spending
3.2.6Spending up on triple play – Infonetics 2006
3.2.7Triple play in the OECD
3.2.8Triple play developments around the world – 2007
3.3Marketing strategies
3.3.1Internet companies taking over the bat
3.3.2The multimedia consumer
3.3.3The key drivers of growth
3.3.4The role of service providers
3.3.5Customer loyalty
3.3.6Permission-based marketing
4.1Introduction and analyses
4.2Digital media
4.2.1Structural separation for convergence
4.3Internet media companies
4.3.1Search services seen as key
4.3.2Search services market statistics
4.4.1Amazon – new services
4.5.1AOL – redefining its future
4.6.1eBay’s ARPU and revenue
4.7.1Innovations keep Google in lead
4.7.2Merger and alliance examples
4.9News Corp
4.9.1Not a leader in move to convergence
4.9.2Merger and alliance examples
4.10.1Yahoo expands services
4.10.2Merger and alliance examples
4.12Other developments
4.12.1TV Airwaves for Internet
4.12.2Copyright becomes as issue
4.13Internet media bypassing the telcos
5.1Massive media changes
5.1.1Continental shift in competition
5.1.2Distinct industry realignments
5.1.3TV broadcasters
5.1.4Radio broadcasters
5.1.5Newspaper publishers
5.1.6The video and DVD rental companies
6.1Advertising strategies, overview, revenues
6.1.1Measuring digital media revenues - analysis
6.1.2Internet advertising
6.1.3Market developments
6.1.4Advertising statistics and market trends
6.1.5Dubious ‘advertising’ tactics
6.1.6Advertising and the digital media – analysis
6.1.7Interactive advertising
6.2Permission-based marketing
6.2.1Introduction of the concept
6.2.2Establishing one-to-one marketing
6.2.3Permission-based: 65% of residential New Media market by 2015
6.2.4Free Internet, banners and spam are the Ford T-models
6.2.5First success stories
6.2.6Trust is key to success
6.2.7Customer Relationship Management (CRM)
7.1Enterprise networks need to go public
7.1.1Skype’s VoIP service for enterprises
7.2.1The market is still growing
7.3Business market
7.3.1Telecommunication services
7.3.2E-commerce is changing business models
7.3.3Market developments
7.3.4The next step for companies with broadband - analysis
7.4Residential market
7.4.1New media explosion through to 2008
7.4.2Early adopters
7.5Target market: top end of consumer market - analysis
8.1North America
8.2Latin America
8.2.1Overview of media convergence
8.2.2Triple play models
8.2.3Pay TV
8.2.4Broadband TV (IPTV)
8.2.5Digital Terrestrial TV (DTTV)
8.3.1Western Europe
8.3.2Eastern Europe
8.4Africa/Middle East
8.4.2Middle East
8.5.1Market overview
8.5.3South Korea
8.5.5Hong Kong
8.6Pacific region
8.6.2New Zealand
8.6.3South Pacific
Exhibit 1 – Some application bit rates
Exhibit 2 – Drivers of high-speed Internet
Exhibit 3 – Tillevision Model for ICT Infrastructure
Exhibit 4 – Tillevision Model
Exhibit 5 – Conjecture Subsidiarty
Exhibit 6 – Fractal repetition of the Internet paradigm
Exhibit 7 – Rural Tellet mobile voice-mail devices
Exhibit 8 – Media centre devices
Exhibit 9 – Telecommunication convergence
Exhibit 10 – Digital media marketing commandments
Exhibit 11 – Banners
Exhibit 12 – Permission-based business model
Exhibit 13 – Early adopters

Table 1 – DSL, 1Gb/s, DWDM transmission speeds – what does it mean?
Table 2 – Digital Access Index for top 25 countries – 2005
Table 3 – Information highway services – level of interest
Table 4 – What is the service worth to you?
Table 5 – Interactive services; what subscribers will pay for
Table 6 – Drivers for service providers to deploy triple play services
Table 7 – Percentage of operators globally offering unlimited nationwide fixed-line calls – 2005
Table 8 – Triple play pricing with per-minute call charges – 2005
Table 9 – Double play pricing (voice and data) with per-minute call charges – 2005
Table 10 – Bit caps and corresponding service limits from off-network sources – 2005
Table 11 – Online users and other media – 2005
Table 12 – Percentage of online searches conducted on four leading search engines in the US – January 2007
Table 13 – Percentage of online searches conducted on leading search engines in the US – 2006
Table 14 – Global market share of Google and Yahoo! – November 2005
Table 15 – Percentage of worldwide advertising spend on Internet vs other media - 2006; 2009
Table 16 – Worldwide Internet advertising spending versus overall advertising spending – 2006 - 2009
Table 17 – Global advertising expenditure by region – 2004 - 2008
Table 18 – US ad spending on social networking sites – 2006 - 2007; 2010
Table 19 – Worldwide ad spending on social networking sites – 2006 - 2007; 2010
Table 20 - Percentage of total US online advertising spending – top four portals – 2006 - 2007
Table 21 – Share of online display ads – top 3 US websites – 2005 - 2006
Table 22 – Media platform used by US consumers for major news event – October 2006
Table 23 – Advertising expenditure growth by country, top ten – 2005
Table 24 – Historical worldwide B2B revenue – 1998 - 2005
Table 25 – Cable TV subscribers, annual change and penetration – 2000 - 2005
Table 26 – Cable TV subscribers, annual change, penetration – major countries – 2005 - 2006
Table 27 – Triple play households in Europe – 2005; 2010; 2015
Table 28 – European mobile and broadband (triple play): growth opportunities – 2005 - 2010
Table 29 – Service bundling offers: UK market – 1995; 2002; 2005 - 2006
Table 30 – Proportion of bundled services by type: UK market – 2006
Table 31 – European IPTV subscribers – 2004 - 2006
Table 32 – Global share of IPTV subscribers – 2006
Table 33 – UPC video and voice subscribers – September 2006
Table 34 – Online advertising market Australia, revenue and forecasts – 2003 - 2010
Table 35 – Home network penetration of Australian households – 2005; 2007; 2010; 2015
Table 36 – Australian content market revenue – 2005 - 2007

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Digital Media
Strategies & Analyses (Industry & Markets)

Number of pages 166

Status Archived

Last updated 29 May 2007
Update History

Analyst: Stephen McNamara

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