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Friday, January 20, 2006

Old Media ,Content value & Future

As we noted recently, the intersections of online world with traditional media is setting the market on fire.As we can see:
- 2005 album sales were down 7% from the previous year while digital downloads of music doubled! U.S. album sales were down about 7% as 2005 drew to a close, but the budding market for music downloads, which more than doubled over last year, helped narrow the revenue gap.
- Big enough slice of the book reading public will opt for digital delivery and that will have a significant, disruptive effect on the entire industry.
- Hollywood took 7% less at the box office in 2005 than in 2004 and growth in sales of DVDs has slowed.

Recenty Dow Jones announced more profits from online compared to traditional media(This in my opinion reflects two things: Online making traditional media reach to larger people and rise of online world can't be resisted - better embrace it -Indications are that combined strength of both online and offline readership of WSJ is larger than traditional print media readership).Retailers can definitely experience that buyers of all trendy and unique things surf online, do their research before any purchase - In the online world through comparison shopping, targetted advertising, promotional schemes, personalisation and preference patterns all provide unique value that can potentially drive offline sale as well quite significantly. Add mobile technologies and online world - the combination can really create deep impact in the offline world.

As the Economist sees it, media companies are suffering intense pain—and it is starting to seem worryingly permanent. Old media shares are losing marketcap heavily. One investor, who recently moved two-thirds of his $1 billion fund out of American media and into emerging-market companies, moans that “the market thinks something's going to get them, whether it's piracy, personal video recorders, or Google. The big groups have seen their newspapers and magazines lose readers and advertising to the internet; their music businesses suffer piracy and falling sales; and someone else's video games captivate new generations of consumers. Now come fears about film and TV, the bedrock of their business.
Prescription for success : The internet is still in the digital equivalent of the silent-film era. It has been formidable for text, still images and music, but is only now, with broadband access, entering an age of high-quality video. Yet, if Hollywood teaches one thing, it is that stories can be re-made and dreams can come true. Rather as big retailers, including Wal-Mart and Tesco, have discovered advantages online, so too will big media companies - thats the hope.As I wrote recently the internet's effect on the traditional world is just getting felt and more would follow.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"