The media evolution, the

digital revolution by Mohamad Kabir

There was never once that I didn’t feel like

shooting the TV in order for it to switch
channel. You knew the day had ended as
the national anthem started playing, and I
always wondered - why in the world would
someone build a television set with the
capability of showing more than 3
channels?

Well, these were the excitements of

Charles Darwin would not have expected this to
watching television 2 decades ago. My 8 happen
year old nephew concluded that I’ve had a
deprived childhood given the fact that I only “My 8 year old nephew thinks that
had 3 channels to watch from a television
I’ve had a deprived childhood
the size of a Perodua Kancil. For him, 100
channels seems like a reasonably modest given the fact that I only had 3
number. Furthermore, he wants to be able channels to watch from a
to watch Ben 10 from anywhere while television the size of a Perodua
playing Grand Theft Auto and checking out Kancil”
his friends’ Facebook statuses.

The growth in digital media

We have now entered the Digital Media
Age. The age where the level of interaction,
The growth in digital media has been
sound and video effects, and the ability to
accelerated with the advent of social and
multi-task plays just as equal importance as
consumer content such as Facebook, You
the content of the movie.
Tube, Twitter and MySpace. These have
enabled millions of consumers to create
Digital media refers to digitized content content and publish their opinions online.
encapsulating text, graphics, audio, and
video that can be transmitted over the Currently, digital media spend accounts for
internet or computer networks. In other 21% of total global media spend (figure 1).
words, this type of media could be used for This is expected to increase to 31% by 2013
interaction, sharing and editing whilst (figure 1).
providing better quality and flexibility than
non-digital media.
 Figure 2 compares the relative growth rates
for the various industry segments during
both the downturn of 2009–10 and the
anticipated recovery in 2011–13.

Figure 1 : Digital versus Non digital spend

Across the entertainment and media

industry, the current global economic
slowdown will have the effect of accelerating
the ongoing migration to digital by both
consumers and providers. With companies
being forced to strive for greater efficiencies Figure 2 : Growth rate by sub-industries
in activities ranging from distribution to
advertising, and with consumers seeking
higher value from their buying decisions, the
As this comparison shows, the growth rates
tough economic conditions have reinforced of more digitally driven segments such as
the existing drivers behind the digital Internet access, Internet advertising, and TV
revolution. subscriptions will outperform the industry as
whole during both the downturn and the
recovery.
“The overall impact of the current
downturn will be to speed up the For others, such as newspaper publishing,
move to digital rather than slow it the upturn will coincide with a return to
down – partly by creating an growth, albeit from a lowered base for
unarguable case in favor of digital newspaper publishing. However, the
migration across the industry” underlying message is that while the
downturn clearly impacts the pace of growth
in each segment of the industry, it does not
alter the underlying pattern of digital
Given the combination of a global economic revenues expanding at the expense of non-
downturn and accelerating migration to digital revenues.
digital revenue models, what will be the
impact on overall spending on entertainment During the five-year forecast period, these
and media during the five-year forecast contrasting growth rates and digital’s rising
period? While the global entertainment and share of spend will drive an ongoing
media market as a whole will grow by 2.7 rebalancing of the industry’s overall
percent compounded annually for the next
revenues between the segments. Figures 3
five years, it will include a period of much
and 4 compare the relative revenue shares
faster growth during 2011–13, when the
between the various segments for 2008 and
aggregate rate of expansion globally will leap
to 5.9 percent compounded annually.
2013, excluding Internet access spending.
 These changes go much further than simply
how people consume digital content,
reaching into social interaction and
relationships. Instant messaging and
communications services such as Twitter
are now a part of everyday life. And more
than 200 million people worldwide are active
Facebook users, with more than 100 million
users logging on to it at least once every
day. The impact of the behavioral changes
driven by digital opportunities extends well
Figure 3 : Market share by segment, 2008 beyond the use of Web sites.

“Consumers will continue to want

more say in when, how, and where
they consume content“

The impact of the behavioral changes

driven by digital opportunities extends well
beyond the use of Web sites. During the
alarm over a potential flu pandemic in April
Figure 4 : Market share by segment, 2013 and May 2009, the spread of the symptoms
was tracked in some countries by
monitoring the frequency of search terms
What consumers want? used on Google. A blogger who recently
reviewed a television program after its
As the economic environment fosters scheduled airing found himself heavily
and accelerates digital migration, key criticized for giving away the ending before
effects will be to reinforce the emerging the time-shifting members of the online
digital behaviors that have been coming community had watched it on their personal
to the fore in recent years and to embed video recorders. And tapping into the
them even more deeply in consumers’ massive collective buying power of online
lifestyles and consumption habits. communities is an increasingly central focus
The core driver of the new behaviors is of consumer marketing campaigns globally.
consumers’ growing demand for greater
control over the content they want. From These trends highlight the emergence of the
mobile Internet to online communities so called Net Generation—the global,
and from movies-on-demand to the connected youth cohort born from 1977 to
uploading of selfgenerated content, 1997, who represent the first generation to
advances in digital technology are “grow up digital.” For these young people,
increasingly enabling that control. new media technologies are intuitively
familiar components of everyday life. One
major impact of those in the Net Generation
is that they are collectively driving the
industry toward new business models that
emphasize a more personal two-way
relationship between companies and
customers.
Another is that they are influencing their There will be no place to hide from the
parents and grandparents to take a growing digital migration and the winning companies
interest in new and emerging platforms. In would be those that focus on driving and
our view, the downturn will increase that leading change that delivers real value to
influence still further, since it will make the the consumers.
older demographics more value conscious
and therefore more willing to listen to their
children and grandchildren.

Each of these developments involves

consumers’ obtaining entertainment and
media directly or indirectly through digital
and/or mobile platforms. Put simply,
consumers want to decide for themselves
what they consume, as well as how, when,
and where they consume it—including the
ability to “side load”: consuming the same
digital content on several different platforms.
Several developments reflect this profound
behavioral shift. And their overall impact will
be to drive an ongoing rise in spending on
digital/mobile platforms throughout and
beyond the five-year forecast period, thereby
enabling these platforms to gain an ever-
higher share of total consumer end-user and
access spending on entertainment and
media.

“Consumers want to decide for All charge for the Digital Revolution !!!!
themselves what they consume, as
well as how, when, and where they
consume it”

Success in the E&M landscape

Given these current developments in the

market and consumer behaviour, the key to
any successful model would be mobility,
convenience and quality. Meeting
consumers’ demand for higher quality
requires significant investment just to stay in
the game. E&M companies need to invest
now for the future environment despite
limited forward visibility around economic
conditions, consumer behavior, and revenue
models.