StrategyEye sees rise of the iTunes generation

Fresh research from StrategyEye Digital Media suggests the digital media industry will continue rapid growth despite prevaililng economic gloom – but warns interest in virtual worlds like Second Life and mobile TV solutions is waning.

The recent success of the iPhone’s App Store is an example of the increasing popularity of mobile among traditional and new media companies within their digital media strategy. 56% of all companies surveyed intend to incorporate mobile device applications in the next 12 months, while 49% intend to incorporate mobile web portals as part of their digital media strategy.

StrategyEye surveyed over 200 decisionmakers  from dominant companies across the digital media sector – publishers, broadcasters and mobile operators – to assess industry expectations in the current economic climate.

Online advertising and social media are expected to provide the greatest return in the near term. 60% of respondents expect to invest more in social media in next 12 months, 56% expect to invest more in mobile.

However, despite a widespread belief that virtual worlds such as Second Life will expand,  68%  said that  they don’t intend to include them with their digital media strategy over the next two years, suggesting that the appeal of such sites is limited – and potentially finite…

Conversley, social media is a priority area of investment and expansion for 60% of companies, followed by mobile (56%) and web applications (51%).

Reflecting the prevailing trend toward online broadcasting, 78% of broadcasters believe that their long term revenues will be affected positively by audience migration to online sites – so we can expect much more from the BBC, Project Kangaroo, NBC et al. – and iTunes TV show sales seem set to grow into a valuable part of the overall matrix.

All of these online moves are boosted by news that 87% of respondents who expressed a preference said that online advertising gives better returns than traditional outlets.

Additional stats shed some light on what to expect from the future digital media industry.

– 67% of respondents who advertise using traditional channels expect to cut back on their spend over the next 12 months in the economic downturn.

– However more than half (52%) of online advertisers expect to spend more over the next 12 months, with only 13% cutting back.

– 75% of respondents either already have or intend to build community features into their web offering.

– Over 56% of the companies surveyed intend to integrate social media and mobile device applications.

The economic downturn appears to be accelerating the trend of advertising spend shifting from traditional media to online.

Many companies surveyed are looking to migrate ad spend to online avenues at the expense of traditional media:

– 41% of all participants looking to expand spending on online advertising over the next 12 months,

– 47% looking to spend less on traditional advertising

– 36% looking to maintain their existing marketing mix.

Within the mobile sector, social media is seen as a nearer term opportunity than previously hyped mobile TV. 85% of companies surveyed that operate in the mobile sector believe that mobile operators and handset manufacturers would benefit from adding social media elements to their services.

Location-based social networking revenues are projected to reach $3.3bn by 2013 (ABI Research) on the back of licensing and revenue sharing deals.
 
78% of companies surveyed that are involved in the search sector confirm that the semantic web is integral to the development of search services. Semantic search is being heralded as the next-generation search technology for improving relevancy in search results.

StrategyEye interviewed 212 leading digital media companies for this survey. Nearly half (44.8%) of  respondents operate in the mobile sector and one-fifth (13.7%) are broadcasters.
 

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