Media Companies are afraid of more online investments and are thereby missing out on mobile opportunities
|Some Media Companies have simply pulled the plug on their New Media Divisions, as they fail to fulfil the initial promised return on investment. Others are quietly cutting back and letting employees go, in a bid to make their New Media efforts more profitable.|
Either which way, the Media Companies have a dilemma, as much of the experience gained and lessons learned, are retained in the heads of those people that are being let go. Indeed, some companies have basically, written off their million dollar investments, fired their New Media employees and are now left with their traditional minded employees who have been told to “focus on core business” – without any digital strategy for the coming years!
Any New Media suggestions proposed to these companies – whether they come from an employee or from external companies looking for partnerships – have nowhere to go and therefore have little chance of reaching anyone’s attention who can understand the suggestion and see the possibilities. Even if that someone existed, the chances of that person being able to push a suggestion through the system and find financing for anything containing the words “Digital”, “Online” or “Interactive” is remote to put it mildly!
As mobile operators position themselves for 2.5G and 3G rollout, the first content deals have already been made. But they are being made with those content providers that have worked on their mobile strategy, defined what products and content they want to offer, when they want to offer them, and which partners they would prefer to work with.
Our newest report ” How to make money on mobile services ” shows that the market for European mobile services will grow from Euro 1.7 billion today to Euro 23 billion in 2005. And that is actually a conservative estimate, based on the operator’s slow progress in offering attractive revenue sharing business models on the upcoming technologies to help kick start the market by making it attractive for content owners to start developing mobile services. No matter how big the market is, the size of the split between the operators and the media companies is not just dependant on what the operators will offer. The media companies need to have a very well defined strategy as to what content they want to offer on which platforms and when it should be available. By understanding the mechanics of the mobile market and with a strong strategy and the right content, the media companies are in a much better position to negotiate strong partnerships with the mobile operators – thereby ensuring a much larger slice of the revenue than if the operators call all the shots!
Our estimates, based on the value and growth of today’s European market for mobile services, show that the following sectors will benefit the most from the expanding market:
2.Publishing – weekly magazines
The latest reports from Strand Consult about the Korean mobile market, where they already have a functioning “3G” platform, very similar to what we will see in Europe, with colour terminals deployed and running download speeds of up to 144 Kb/s, show a huge increase in revenue, mainly derived from the many services available to the users. A sure indication that there will be a substantial market for mobile services on the European 3G platforms and that the content providers and mobile operators here, need to reach an agreement on how the business and revenue models will work.
Strand Consult believes that those Content Providers who have a strongly defined mobile strategy will be the most attractive partners for mobile operators. Today Strand Consult delivers information to some of the largest International media companies, on the influence and opportunities that the mobile services market has – and will have – in the media sector, helping them define their mobile strategies, ensuring that they understand the way that the mobile operators work and helping them position themselves and their content in the middle of the 2.5 and 3G road. Those Content Providers and Public Service Broadcasters who still believe that “Content is King” and have cut down New Media focus, will most probably be bypassed as operators choose content provider partners.
|More information on the report|