Making a buck from digital media

In his latest report, 2008 Global Digital Media – Entertainment Market, Budde states the most hotly debated topic in the digital media industry is how to make money and many involved in this market are directing their focus to the entertainment sector.

The Internet, digital television, home media centres and mobile devices are all being used to deliver entertainment services. Set-top boxes are seen as the key to digital television service take-up around the world; HDTV, DVRs, home media centres and Internet services are also set to drive entertainment growth. Internet media companies like Google, are exploiting the added speed and capacity offered by broadband infrastructure, which will result in a whole range of new applications continuing to enter the market over the next decade.

According to Budde, the UK continues to be a leader in digital television penetration; however this is expected to change over the next five years as take-up accelerates in other parts of the world, particularly Asia. In 2008 Asia Pacific is expected to supersede North America and Europe in terms of set-top box sales.

“With the development of broadband, interactive TV is back in favour again. Many TV programs now have an interactive element to them, particularly in the Asian and European markets,” he said. “The Multimedia Home Platform is beginning to assist in the progress of T-commerce around the world, particularly in South Korea. iTV and interactive content is also being incorporated into mobility, with further progress expected throughout 2008 and 2009.”

In his report, Budde notes video applications have emerged over broadband the last couple of years. In only a few instances do we see an opportunity for IPTV, the reality is that telcos will find it pretty tough competing with cable and pay TV operators. However, as PCCW has shown it can be done. The market is progressing – in 2008 there are initial global standards and architecture specifications in place, and interesting developments are taking place in Europe (particularly France and Italy), China, Hong Kong and the Netherlands.

“Video consumption via the Internet is producing promising statistics and advertisers have begun to seriously take note. In the USA around one in every three videos watched online is done via a Google property (primarily YouTube) – evidence that this industry leader continues to dominate. In 2008 it will be interesting to watch the impact of Hulu upon the online video market in the US,” said Budde.

The Internet has also increasingly become a forum for User Generated Content, from the early bulletin boards to today’s video blogs that allow for new levels of interaction. In recent times social networking has become a major focus, dominated by industry leaders MySpace and Facebook. Other competitors are also scrambling to capture market share, claimed Budde.

“Several different industries are vying for networked home media sector. They all want to become the gateway to the customer. While most of the initial home automation efforts have concentrated on the PC, there is now a noticeable shift away from PCs to home media centres,” said Budde.

He also believes focus has shifted to game consoles, but eventually the market will see the future based on TV and DVR players.

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