Indiantelevision.com's Digital Edge: IBM study predicts 23 percent rise in new media sales

Indiantelevision.com's Digital Edge

IBM study predicts 23 per cent rise in new media sales

Indiantelevision.com Team

(24 January 2007 5:30 pm)

MUMBAI: The sales of media on the internet and cellphones are expected to rise 23 per cent over the next four years, according to a IBM study. The upsurge is largely driven by TV networks and film studios putting more of their content online.

IBM researchers estimated new media sales to grow at nearly five times the rate of traditional media. The biggest surge, they claim will come from the internet syndication of professionally produced programming, which is expected to jump 33 per cent to $25 billion.

The research cites examples of Walt Disney Co. offering episodes of hit prime-time shows "Lost" and "Desperate Housewives" for free on ABC.com and Sony Corp. offering a Star Wars-themed multiplayer game on its Web site.

The IBM report comes in the wake of Google Inc.'s stalled talks with U.S. television networks to provide TV show programming to online video service YouTube.

Media companies like Viacom Inc. and General Electric's NBC Universal are making their programming more widely available on the Internet, but have failed to land distribution deals with YouTube over deal terms and copyright concerns.

Viacom in early February demanded that YouTube remove more than 100,000 video clips from the service.

Still, the internet syndication of traditional media companies' programming will be a small part of the estimated $655 billion of annual media revenue in 2010.

The IBM report estimated the music industry will have lost a staggering $85 billion to $160 billion in revenue between 1999 through 2010. It also concluded that the music industry will have to sort out the legal fights regarding use of digital media.

"Doing nothing is not an option," according to the report's findings.The growth rates are on a compounded annual growth basis."We're not moving from black and white to color TV -- from one steady state to another," said IBM's global media and entertainment strategy leader in an interview to the media last week."We're moving from an era of stability to an era of constant change."

Growth rates are higher for new media businesses, but traditional media sales will still play the biggest role with estimated annual sales growth of 5 percent to $340 billion by 2010.

So called "walled communities," or networks such as cellphone and cable networks that offer viewer-created programming and revenue from cable and satellite subscriptions and advertising, will rise by 10 percent to $240 billion by 2010.

'New platform aggregators' such as YouTube and MySpace, are expected to rise by 16 percent to $50 billion.