Global Digital Media..
Online entertainment a key driver to internet use
Online entertainment has become a hugely popular area and every day, internet users around the globe log in for purely entertainment purposes. From updating social networks, watching online videos and participating in games and gambling; the online platform now offers an enormous range of services.
Online video in particular has become recognised as a powerful format for both communicating online and providing an enhanced online experience. Online video is being used by many different industries for advertising, marketing, entertainment, demonstration and communication purposes. The success of Google’s YouTube service, based on user-generated videos, has been well documented and in 2011 YouTube continues to dominate in terms of viewers and streaming. YouTube is also seeking to expand its services beyond only user-generated videos by forming partnerships with online movie content providers.
Other business models have emerged and are proving successful, particularly for online movies and TV shows. Hulu is a prime example of this and Netflix, operating in North America, is also gaining prominence. In 2011 we also saw social networks begin to offer online Video-On-Demand (VoD) services via a partnership between Facebook and Warner Bros. Whole new distribution channels for on-demand videos are opening up and the success of these partnerships will be closely watched by the industry.
As indicated above, Facebook, which began as a social communication tool, is fast expanding its offerings and has become a true competitive threat to Google. Social media is becoming integrated with many service offerings such as e-commerce, unified messaging and online gaming. Facebook is well positioned in the social gaming area too, offering popular games such as Zynga’s Farmville via both online and mobile channels.
Advertising is still the key source of revenue for online entertainment providers and around 15% of overall worldwide advertising spending will be directed towards digital media channels. While the economic downturn initially impacted upon the growth of overall advertising spending; in 2011 there are signs of recovery with online advertising continuing to grow and the ever popular TV advertising rebounding.
The rise of digital media channels has placed much pressure upon the traditional media and entertainment outlets in recent years. This, combined with an economic downturn, has led to much unrest in the media sector. The digital media companies are the clear leaders however, but to a certain extent there will be parallel developments: one driven by Digital TV, using the traditional broadcasting networks; and one driven by broadband using new fixed and mobile telecoms infrastructure.
The success of Digital Media companies can be partly attributed to their willingness to compete in many different markets and implement new innovations. Companies like Google, Microsoft, Amazon, Facebook, Apple, Twitter, and so on are continually looking for other opportunities from developments in mobility, e-commerce, home media centres, social media, online VoD and infrastructure. As online entertainment is based on a virtual environment, it is expected that cloud computing technology will become a useful infrastructure tool for the future.
Researcher:- Kylie Wansink
Current publication date:- May 2011 (4th Edition)
Next publication date:- May 2012