New Media Companies Spend Billions

The cost of content in European new media markets will rise to $6.2 billion by 2002, according to a new report by Datamonitor, Making Money In New Media Markets. The report suggests that traditional media companies will supply much of the content to the new media markets.

The analysis also predicts that the cost of content for on-line service providers will increase significantly over the next five years. It sees the key challenge facing companies developing and executing new media strategies is to search for reliable revenue streams while keeping costs down. As the number of subscribers increases, Datamonitor predict that: “The per subscriber cost of attracting new subscribers and retaining existing ones will fall. Economies of scale from the larger operations will lead to cost reductions in transaction processing, marketing and a host of other customer facing areas.”

The second part of the report forecasts that digital television content will cost over $4 billion in 2002. “As the number of subscribers increases and the range of programming and services required expands, the ongoing demand for more specialist content, means that the cost burden of content production, purchase and aggregation will increase.”

Datamonitor: 0171 625 8548