Online media

The emergence of online media has fundamentally impacted the entire media and entertainment industry:

• traditional media companies have seen their revenues migrate to online, e.g. print classifieds
• emerging technologies and changes in consumer behaviour represent strong challenges to established business models and value chains, such as music distribution
• competitive barriers to entry have been lowered, increasing the number of competitors. An example is user-generated websites competing with professional news websites.

The economic downturn appears to have accelerated the overall shift towards online. However, the sector is not immune to adverse impact.

Online advertising may see single digit growth at best in 2009, which is a significant change from previous high growth rates, and certain parts of online advertising will fare better than others. We expect search to continue growing while the online display segment appears likely to see year-on-year revenue decline. Players will consequently find it harder to grow their revenues and will review their strategic priorities and digital portfolios.

Since 1997, PwC has been working with the Internet Advertising Bureau (IAB) in the collection of online advertising data and the publication of the bi-annual online ad spend surveys. We are also working with the IAB and UK mobile operators in the launch of the first mobile ad spend survey. Our work with the IAB has given us significant insights into the online and mobile advertising markets both from an advertiser and media-owner point of view. This in turn brings significant benefit to our clients through the solutions we offer to them.

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