October 03, 2006
Global Media and Communications Industry
 The development of global media in the last two decades has been shaped primarily by privatization of television and mass acceptance of new broadcast technologies in many European and Asian markets. Other major factors impacting the global media industry are relaxing of norms on media ownership, increasing parallel lifestyles in many urban areas across the globe and saturating demand for media products in developed economies of the world.
In 2005, worldwide spending on communications services grew by 3-4% to reach US $ 1.2 trillion, of which advertising had a 33% share. United States had a 52% share of the global communications industry, followed by UK, France, Germany and Japan together having 23% and rest of the world contributing 25% of the total spends.
The next decade has the potential to change a lot of these statistics as the populations in most of the western countries are ageing and marketers are shifting their focus on neo developing markets. As per Goldman Sachs reports published recently, GDP of BRIC countries is set to overtake that of G6 in 2040 and this accelerated growth does present media and communications industry with the next growth paradigm.
 In China half of the top 10 brands by ad spend are global brands and in Russia 8 out of the top 10 advertisers are MNCs.
As MNC's move towards growing populations and countries where GDP's are growing in double digits, most of the marketers will have to look differently at these rapidly growing economies.
Since 1991 advertising expenditure in US has increased by 104% (figure: 1) where as in Japan it has remained stagnant and so is the case for most of the top 5 markets. On the other hand, advertising expenditure in Russia and China has registered massive growth and this provides a vital pointer of future growth directions not only in these countries but also for the future growth areas for global communications and media; traditional as well as new media.
Table: Advertising Expenditure, US $ bn
S. No. |
Country |
1991 |
2005 |
% Growth |
1 |
USA |
82.2 |
168.0 |
104 |
2 |
Japan |
37.2 |
38.7 |
4 |
3 |
Germany |
14.3 |
19.0 |
33 |
4 |
Great Britain |
8.9 |
18.7 |
110 |
5 |
France |
8.0 |
11.5 |
44 |
6 |
Italy |
5.0 |
10.0 |
100 |
7 |
China |
0.3 |
9.7 |
3133 |
8 |
South Korea |
2.0 |
7.6 |
280 |
9 |
Spain |
5.3 |
6.9 |
30 |
| Contd. |
|
S. No. |
Country |
1991 |
2005 |
% Growth |
10 |
Canada |
3.7 |
6.5 |
76 |
11 |
Australia |
3.0 |
6.1 |
103 |
12 |
Russia * |
1.0 |
5.0 |
400 |
13 |
Brazil |
2.5 |
4.2 |
68 |
14 |
The Netherlands |
2.3 |
3.9 |
70 |
15 |
Mexico * |
1.8 |
3.6 |
100 |
16 |
Poland * |
0.6 |
3.3 |
450 |
17 |
Belgium |
1.0 |
3.1 |
210 |
18 |
Greece |
0.3 |
2.9 |
867 |
19 |
Switzerland |
2.4 |
2.8 |
17 |
|
* 1996 figures
The US has hitherto accounted for about half of worldwide advertising and marketing services spending, with the most prominent non-US markets being Japan, Germany, UK, France, Italy and Spain. That is changing. Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe are becoming more and more significant, as multinational corporations build their businesses where populations are growing. -
Sir Martin Sorrell, 2005
Broadcast Media and the Role of Technology
It is the audience that makes television a truly mass medium; at the same time it is the television programming that creates its mass appeal. Interacting with audio-visual content and adapting ones television schedule to personal preferences in itself are not completely new; rapid advances and dispersion of technology into the general populace has bought this to the fore.
Hitherto television viewers have developed their own ways to interact with the televised content, which takes the shape of zapping, sms's, participation in phone in's and the innocent lunch time conversations. Digital technologies offer more and sophisticated possibilities for engaging with media content: directly, simultaneously and through electronic means.
 Technology mediated interactivity is the biggest catalyst for changes occurring in the media landscape blurring the boundaries between traditional ‘lean-back' media (TV) and ‘lean-forward' media (PC).
BBC and BskyB have pioneered the concept of interactivity through interactive advertising, banking, gaming, betting and gambling and also through personalized camera angles (in sports broadcast) and at times getting to choose between simultaneous live matches (UEFA Champions League September 2003).
A caselet on BskyB (click here)
India:
Infotainers, Marketers and Technology
Lack of addressability has been the bane of Indian Television distribution. With terrestrial broadcasting out of bounds for commercial broadcasters and huge delays in setting up of DTH guidelines, both Indian consumers and media conglomerates are betting big time on this technology to meet their objectives of high quality content with proper subscriber management system.
Taking a cue from the British DTH operations, it is expected that the existing players are going to launch a slew of marketing and technological wizardry to attract as many consumers to their fold as possible. We already have STB's with personal video recorders and interactive sports and news channels.
It is imperative for the DTH provider to tie up with a strong telecom partner for providing a return path which is essential for interactive service like shopping, banking and may be gambling or betting (laws permitting).
As is evident form the BRIC push that global marketing and communications industry is making; we are in for interactive times.
After the break
November issue of Oxygen will present insights from our National Panel, including data from markets that have never been reported on.
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