According to Forrester, only the large media companies will be able to cope with the demands of European net users and provide multi-platform, multi-language content to local markets.
“To thrive with international Web properties, multicountry localizers must wield their most effective lever — economies of scale from Pan-European online offerings — to consolidate assets and cut costs across their local operations,” said Forrester analyst Diana Janssen. “They will be challenged to do so while producing the skyrocketing amounts of content needed to populate Pan-European multimedia sites. Even large firms will struggle to make the savings from shared technology infrastructure offset their content bill.”
The cost of producing high quality localised content will be prohibitively high for smaller companies who will be unable to set up multiple local operations. “Pan-European portals like Terra Lycos, Wanadoo, T-Online, Yahoo!, MSN, and AOL are well-positioned to survive localising their sites for multiple European countries because they can cheaply purchase 75% to 80% of their local content from syndicators and other local suppliers, and they can keep overheads low,” Janssen added. “Equally, an elite of large international multichannel media firms — like ENDEMOL, CondÊ Nast, or MTV — will successfully integrate their international Web properties. But most of these firms will have to restructure their currently distributed management and production structures to deliver economies of scale. To succeed they must set up centralised localisation facilities and partner with like-minded local media companies.
Online-only media targeting a narrow segment with quality content will face the highest localisation costs – having to produce 60% to 100% of their content locally to match local tastes and interests. Plagued in addition by high local marketing costs, international pure-play specialists will become very vulnerable. To survive, they should set up local co-branded sites with media partners, sell content to businesses beyond media sites, or sell original content only and give up localisation.”
