Telecom Study --

Tavess expects global online digital content market to cross $150 billion by 2012

New Delhi, India, 07 June, 2011

Adoption of advanced data transmission technologies coupled with the launch of next generation end user devices is leading to rise in digital content demand
The increased penetration of broadband, adoption of advanced data transmission technologies such as 3G coupled with the launch of next generation tablets and high-end smartphones is leading to rise in demand of digital content. The online digital content market is showing significant growth and Tavess expects it to cross $150 billion by 2012.

Content owners are investing heavily in digital content delivery systems in order to manage high volumes of traffic on their web sites and in order to provide seamless uninterrupted digital content viewing experience to users. In addition, users are demanding high quality content over multiple devices such as the mobile phones, laptops, and tablets, and are seeking greater integration among all these devices driving the demand of digital content delivery systems and services.

Users are beginning to demand subscription-based content services for unlimited content access
The key trends prevailing in the digital content segment include increased demand for subscription-
based content services, advertisement-based free content services, integration of digital content with social networking, and digital content service bundling. Users are beginning to adopt subscription-based content services paying a particular monthly fee for unlimited content access. Various web sites are cashing in on this trend. For instance, subscription to music web sites such as Napster and Rhapsody provides unlimited music access to users for a particular fee. These web sites also enable users to listen to their playlist on multiple devices.

While subscription-based content services are gaining ground in developed markets, content owners are targeting developing countries with advertisement-supported content
Subscription based model remains more successful in developed markets such as the US, UK, Japan, and South Korea. In developing countries such as China and India, where content piracy is rampant, content owners continue to leverage the advertisement-based content delivery model making users watch a few advertisements before playing their free content thereby monetizing their content through advertisements. Digital content bundles are also gaining traction with telecommunication operators launching content bundles encompassing telecommunication services bundled with digital content such as digital TV.

Content owners are laying stronger emphasis on providing interactive content services by integrating social networking functionalities
The most popular trend adopted by digital content web sites is the integration of digital content with social networking functionalities. This integration allows users to share their playlist or their favorites with their friends on various networking sites, and facilitates rating and ranking content while watching it online. Rise in demand for digital content has increased the traffic volumes of various content streaming web sites with video streaming sites such as Hulu and Netflix reporting a significant increase in subscribers with Hulu reporting more than 30 billion users in 2010.

Future of digital content delivery lies in cloud
Users are increasingly adopting and preferring subscription based music and video services leveraging the cloud for storage and accessing content ‘on the go’. With the advent of on-demand music services such as Pandora and Spotify, users are no longer required to carry their music files on their devices and can access their music on-demand and as a service from these web sites. Players such as Apple (iTunes) and Amazon have also transitioned to a cloud based service with Amazon launching its cloud based music service in March 2011 allowing users to store music in the cloud and play it on multiple devices. Another upcoming area in digital content access is providing users with a personal URL for storage of digital content enabling users to overcome limitations pertaining to device and region.

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