Monday, 19 August 2013
Publishers, Music Companies, Mobile Companies and more are being rescued by internet companies they tried to stop.
All the talk of the Internet wreaking havoc on traditional media companies is changing. In fact, it's helping them!!
I've stolen this from a great Article in the current August 17th edition of The Economist (cover above) which is well worth the read, called "digital pennies pile up at last".
The reputable PWC reckons revenue for online media and entertainment will rise by 13% each year for the next 5. So the web is growing the entertainment business.
Music, which record companies legally, stupidly, fought internet pioneers for years, is actually showing +.2% growth - the first time it's growing in a decade. Which means the internet increases royalty payments to....the very same record companies!
And that's their IFPI trade group numbers. So the web is coming to their rescue as their CD and DVD sales collapse.
Online radio and music streaming (Spotify etc) brought in a billion dollars in 2012.
Mobile phone companies are benefitting too, by selling data to access these services whilst their call rates are going into a death spiral.
YouTube are now paying small copyright fees too on music downloads.
Netflix, Hulu and Amazon are of course buying rights to stream content online from traditional broadcasters. That's about 3 billion Dollars a year and rising. Online licensing accounts now for a third of the revenue growth at traditional CBS.
Book sales are growing again by about 14% per year on Ebooks means bigger profits for publishers and for authors. Yes, it has meant the death of bookshops but in return, accessibility to books is far greater especially amongst the young and far more of us are reading.
Digital newspapers subscriptions are working to a point too. The New York Times has nearly 700,000 (!) online subscribers.
The surge in smartphones, in tablets, in ipads coupled with the extension of broadband speeds are driving this growth. EMarketer, a US research firm, thinks Americans will spend more time online this year than on TV. And because people want content, 'on the go', they're becoming more prepared to pay for it.
It's a fairly extraordinary turnaround that Internet companies are now becoming the saviour of traditional media companies such as publishers, record labels and TV broadcasters who tried so desperately to stop it. Instead of embracing it, encouraging it, because better access means higher sales, they were afraid of something they didn't understand.
They'd have sold more far sooner, if they had.
Ad revenue is bypassing Ad Agencies as it goes online. Like the book publishers, the record companies of old, Agencies are pooh-poohing it instead of selling it, embracing it. There's lessons here.
Like the peasant's in Lamb's essay, we know not how to roast pork, other than to burn the house down.
Interesting isn't it?
You have to laugh though. Irony of ironies.