Europe’s economy is beginning to reap the benefits of ever-more interlinked and interoperable online technologies, but many obstacles remain to be overcome, experts have told the Commission.
A report, entitled “Interactive Content and convergence: Implications for the Information Society”, was prepared for the Commission by an international consortium of media consultancies and law firms and published on 25 January 2007.
It concludes that: “Broadband internet and mobile networks now make it possible to broadcast, stream or download digitised content from a diversity of platforms to a variety of devices, often on an on-demand, interactive basis.”
The report goes on to say: “Digital convergence is turning the now ubiquitous TV sets and mobile handsets into a terminal for interactive applications and download services. The new technological environment creates great opportunities for European content providers and platform operators.”
The report also contains some caveats and points out obstacles to the spread of digital content in Europe: “European markets are not always at the forefront of digital distribution of content and are lagging behind more advanced markets in some aspects. By some measures, Europe is second behind Japan and Korea (but before North America) for mobile content distribution and mobile TV, and second behind the US for broadband content distribution.”
The report states: “Europe has indeed witnessed an impressive array of new media developments over the last 18 months in terms of supply (launch of online and mobile content services, new media deals), as well as on the demand side (usage and technology adoption)”. The researchers examined all important aspects of the revolutionary developments taking place presently in the way content is delivered:
- Textual content (see EURACTIV LinksDossier on the publishing industry) generated, in 2005, the most important revenues on the internet (around €850 million per year). This was, however, equivalent to no more than 2% of the publishing industry’s total annual revenues. By 2010, this percentage is predicted to raise to 5.4% or €2 billion, coming in second after games.
- Online and mobile games generated almost €700 million in revenues in 2005; they are predicted to become the single biggest source of revenue on the internet, generating €2.3 billion in 2010.
- Video and Movies: This market is deemed to become the fastest-growing in the near future, with an expected growth of revenues from €30 million in 2005 to €1.2 billion in 2010. The lion’s share of revenues, researchers say, will come from membership-based video-on-demand services.
- Music: The foremost market for online distribution in Europe, with Apple’s iTunes still in the lead. In 2005, €120 million in turnover and €67 million in profit were generated. Until 2010, these figures are expected to increase by a factor of ten.
- Radio: 15 million Europeans listen to streaming radio broadcasts every week. By 2010, that figure is expected to more than double, and 11 million Europeans are expected to listen to podcasts regularly. Radio will, however, remain to be first and foremost an on-the-air medium, with €250 million or 5% of all radio advertising revenues coming from the online market.