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Consumer Spend on Digital Entertainment to Grow by 50% Says New Report - By 2011, consumers will be spending in excess of 50% more on entertainment content than they did last year, according to a new industry report by Understanding & Solutions
Consumer Spend on Digital Entertainment to Grow by 50% Says New Report

 

PRZOOM - /newswire/ - Dunstable, Bedfordshire, United Kingdom, 2007/06/26 - By 2011, consumers will be spending in excess of 50% more on entertainment content than they did last year, according to a new industry report by Understanding & Solutions .

   
 
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The upsurge of content, combined with much-improved delivery infrastructures, is increasingly allowing consumers to choose when, where and how they consume their entertainment. Recent industry activity and the take-up of home video, TV, music and gaming across multiple delivery platforms are already laying the foundations for significant growth in the sector, particular through:

• Home Video and TV: electronic sell-through and online VoD, linear programming, TV based video-on-demand (VoD), mobile TV and theatrical box office
• Music: online, mobile, and subscription radio
• Gaming: online and mobile gaming

“Going forward, we’ll see the highest percentage growth coming from mobile and online,” says Alison Casey, Business Director: Content and Services, Understanding & Solutions, “though in volume terms, both will remain relatively small scale until after 2011, when compared with established platforms such as broadcast Pay TV. More importantly, multiple formats will co-exist, as different delivery methods and platforms will suit different consumers in different situations. With content moving seamlessly from mobile to online to TV, the challenge for the industry will be to ensure revenues aren’t cannibalised, as consumers will only want to pay for their content once.”

“Although these new platforms bring new challenges,” continues Casey, “we’re going to see digital delivery outgrow all other aspects of home entertainment, helping to increase the global content industry’s revenues by over 8% per year (CAGR) through to 2011.”

If the process is managed effectively, content holders will yield additional revenue streams from both new and catalogue content, though formats will have to evolve. In the mobile sector, for example, it will be short form, re-purposed content that will be most successful.

“This new multi-platform world is creating a revenue shift,” says Casey. “Theatre owners, retailers and broadcasters will continue to be important, but the new media infrastructure providers – including telcos, ISPs, mobile operators and social networking services – will begin to take a larger slice of the revenues.”

However, of all the different players vying for a position in the delivery of digital entertainment, it is the existing Pay TV operators that are in the strongest position. Unlike the mobile operators and telcos, content is already their primary focus and this will be a key lever for consumer uptake.

Although illegal video and music files account for a large proportion of content downloading, new, legitimate services have created viable revenue streams. Online, mobile and Pay TV are beginning to provide a platform for legal content delivery, often generating legitimate revenues in emerging markets for the first time.

“This is particularly true for mobile,” says Casey, “and by 2011 approximately 75% of all mobile subscribers will live outside the USA, Western Europe and Japan. Historically, territories such as China and India have generated small revenues from packaged media sales, and the new digital revenues in these markets could surpass those generated from physical media.”

The emergence of user generated content is also providing an alternative to paid-for content and competing for consumers’ time online. These services, accessed by millions of users worldwide, will increasingly achieve revenues for the service providers through advertising.

This transition to digital delivery will not happen overnight, but has major implications for content holders, service providers and consumers. With more choice and diversity, the market segments will become progressively more fragmented, and companies will need to work smarter to ensure the revenues continue to flow.

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All information provided by Understanding & Solutions in any form is proprietary information that belongs to Understanding & Solutions and is protected by UK and international copyright law. Except as outlined below, direct or indirect reproduction of information, in whole or in part and by any means, is prohibited without the express written consent of Understanding & Solutions.
Members of the press may use a press release in its entirety or take segments from it as necessary; they may also use a graph, a slide, or a section of a supplied research report less than fifty words long, provided all text is identified as “Source: Understanding & Solutions” and all graphics are credited with “Understanding & Solutions, Copyright 2007".

 
 
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Consumer Spend on Digital Entertainment to Grow by 50% Says New Report

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