More content won’t mean discontent, says analyst

22 Jun 2006

Fears among traditional media such as TV and newspapers that the internet will cannibalise their market are unfounded, a digital media expert has said.

Nate Elliott, analyst for the European digital home with Jupiter Research, spoke last week at a seminar organised by iReach, called ‘Digital content – changing consumer demands’. “European homes are being flooded with digital content,” he said. “Everywhere you look there is a range of digital content in European homes, whether it’s text, music, video or photography.”

However, consumers are not switching off in the face of all this content and are only choosing one or two ways to look at it. Instead of spending less time watching TV, for example, the availability of so much content has actually pushed their total media consumption higher, Elliott argued. “It’s not that the internet is shutting down the total amount of time they spend with media. This is going to get more and more pronounced. Overall, media companies will benefit from these trends,” he said.

Despite the growth of digital content, TV remains the leading media type, with European consumers watching on average 12 hours per week, according to Jupiter Research.

Elliott also noted that the range of devices on which to view content is expanding all the time. “It’s not just the sheer amount of types, it’s the range of possibilities with which people can accept content into their houses or into their pockets on the go,” he said.

He also highlighted one of the key drivers of that change. “Ten years ago media consumption was inherently coupled to an individual platform. Today that’s not the case,” he said. “If you wanted to listen to music 10 years ago, it was through physical media like cassette tape or CD. If you wanted to read the newspaper you went down to the shop on the corner and bought a hard copy. Now, if you want to read that newspaper you might go to your mobile phone or your DSL link.”

Elliott also issued a ‘reality check’ for video-on-demand (VOD) services, which currently is one of the most talked about areas of digital content. VOD can be delivered via broadband or digital cable, or alternatively the term covers digital video recorders that let consumers play back previously recorded TV programmes. Uptake has been lower than the hype would suggest. “Less than half of 1pc of TV hours in the US last year were watched on demand. The rest was live. That figure was even lower in the UK,” Elliott pointed out.

By contrast, most of the video available on the web is consumed on demand, not live. “We believe there is some serious potential here but consumers are not likely to pay,” Elliott remarked.

By Gordon Smith