Hyper-competition to be hallmark of media scene in 2007

BY A CORRESPONDENT

March 14, 2007: Latest research conducted by the Strategy Analytics Digital Media Strategies reveal that service digital content providers and distributors are battling for consumer mindshare in 2007.

The research findings, titled Digital Media Strategies: Hyper-competition and the Battle for Survival notes that, as barriers to entry melt away, and revenue opportunities become ever more fleeting, increased channel friction and a hyper-competitive environment in the media and entertainment market is likely to follow.

“An increasing number of content providers are experimenting with direct-to-consumer distribution via the internet,” remarks Martin Olausson, director of strategy, Analytics Digital Media Strategies (DMS) service.

At the same time, scores of major telecom operators and competitive broadband service providers are launching wide-scale distribution of Internet Protocol TV (IPTV) and on-demand content services and they are rapidly establishing themselves as important content distribution partners and entertainment companies in their own right.
This development has already started to raise friction between participants within the traditional content delivery value chain, which has the potential to create a fiercely competitive environment in the media and entertainment market within the next few years, according to the Strategy Analytics Digital Media Strategies study.

David Mercer, principal analyst at Strategy Analytics, says: “While new entrants into the media and entertainment sector will undoubtedly cause an industry shakeup, potentially leading to reduced profitability in the short term, they also bring with them new capacity, new resources and a fresh set of skills and know-how with the potential to increase profitability in the long term.”

The Digital Media Strategies (DMS) advisory service from Strategy Analytics helps content owners, developers and aggregators as well as their partners in media distribution and technology navigate the increasingly complex digital media landscape with an objective, research-driven approach to address central, strategic business questions.