The Apps and Entertainment market continues to evolve
With the rise of digital platforms, the media industry is rapidly changing. In newspaper and book publishing, TV and radio broadcasting, film, music, and other forms of media, we see that the national walls that protect local organisations within traditional models are crumbling. In other words, it is no longer an issue of local market share. It is now about international market share.
But in general, despite the obvious need to move with the times, many organisations are still grappling with the digital economy and questioning the impact it will have on them – or, even worse, are ignorant about it. In many cases, their own consumers are well ahead of them.
The public sector is also seriously affected by this, and may even have greater difficulties with the transition. They should learn from the problems in other sectors, especially book and newspaper publishing. The issues encountered by the Healthcare and Education industries are also classic examples.
The digital media companies are the clear leaders; however, there are parallel developments taking place: one driven by Digital TV using the broadcasting networks, and one driven by broadband using fixed and mobile telecom infrastructure. In 2016, the advertising spending being directed towards digital media continues to grow, further escalating the problems for the traditional media.
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Mobile Advertising and Digital Marketing
The advertising scene has undergone radical change and is still changing. With profits down between 5% and 10% on an annual basis, the performance of the traditional advertising market is under constant pressure. Data analytics is exposing the weakness of these traditional advertising business models and, like all of the other sectors affected by the digital economy, this means that these business models need to change. As they become more aware of the power of big data, advertisers are demanding hard, quantitative data on their campaigns. Increasingly, campaigns are now linked to outcomes. These are predetermined and tested against the results, and payments are made to advertising agencies based on the success of these campaigns, which are becoming far more cost-effective.
Social media companies are becoming increasingly important website publishers. Compared to commercial broadcasters, these companies have one important difference – they have valuable data on their consumers, which they are monetising in a big way. Although consumers are happy to share data with companies operating in the digital economy, they are most unhappy when these companies disrespect their wishes for privacy. On the other hand, many companies involved in big data analytics are disappointed with the results. So a better system could be a win-win situation for both the demand and the supply side.
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Apps, Entertainment, Social Networks and Gaming
The global digital media entertainment market continues to go from strength to strength in 2016. This highly competitive industry sector is flourishing on the back of improved mobile and broadband infrastructure and consumers continuing to embrace entertainment services such as gaming, social media, video streaming and music. The gaming sector in particular has become very competitive with some consolidation occurring and previously successful game developers such as Zynga beginning to struggle. Facebook continues to dominate social media platforms on a global level and video streaming continues to grow and place pressure on bandwidth around the world. The digital music sector is witnessing the rise of streaming music and it now accounts for around half of all digital music revenues.
Social media developments are fascinating and exciting. They show the great potential of the new communication and information tools that are becoming available thanks to the internet, Web 2.0, email, broadband infrastructure and mobile phones and tablets. However, for these new social media tools to succeed, they need to be fully and totally integrated into our daily communication. Popular social media sites have come and gone over the last five or so years as users trend to new features that allow them to experiment and connect. Services include Facebook, Twitter, YouTube, Wikipedia, Foursquare and LinkedIn Instagram, Pinterest and many others. The battle however is still far from over, with companies trying to build viable business models around their ever increasing customer data bases. Increased use of mobile broadband through mobile devices is driving consumer uptake, with many businesses now also investing in social media and also expecting a return.
As broadband speed and capacity increases we are seeing a whole new range of gaming applications entering the market over the next decade. Not needing a console has increased access and created distinctions between console vs. casual gamers. Games are now integrated with other online services such as music and movies. The video and computer games industry in Australia continues to grow strongly. Much of the growth in digital has come from a jump year-on-year in mobile game downloads.
Online gaming and gambling can take players from outside the boundaries of their home countries where these online activities may or may not be sanctioned by the authorities. The global market is an expanding one where virtual online gaming and virtual online gambling is a growth market. There is a decline in the number of Australians who are gambling – but an explosion in sports betting, especially via online.
Mobile Media and Mobile Device Market
The Australian mobile content services market has evolved with the increasing take-up of smartphones and tablets. Smartphones now account for up to 90% of all new device sales, while the market for tablets appears to have peaked in mid-2015, with sales into 2016 having fallen year-on-year, partly due to the popularity of phablets and to the latest versions of 2-in-1 devices. The market among providers has seen some changes over the last few years as company mergers and acquisitions bring consolidation to the industry. The major mobile media players are becoming digital media providers as they provide access to their services via mobile devices.
A major threat to the smartphone business arises from the limitations of the mobile broadband infrastructure. The mobile industry can develop all of these new applications and services, but if the infrastructure cannot handle the capacity, there will be little use for them.