Newspapers  and television are set to undergo some far-reaching changes this year, as new technologies pave the way for changes in how people receive and access information. Accountants BDO point to a continuing shift online by the media industry.

Partner and head of TMT in the firm’s Southampton office, Paul Anthony told ModernSelling.com: ‘Newspapers are having to revise their business models in order to meet changing consumer demands.’

He added: ‘This requires investment and long-term planning. The stronger well-capitalised players will be able to re-invent their offerings while the weaker, more highly leveraged players will find it more difficult. It may also be the case that, if we have a change of government in 2010, a new and more flexible regulatory regime could alter the playing field.’

From print to online

Anthony highlights the Birmingham Post’s switch from daily to weekly publication while industry trade mag Media Week recently become online only, with other titles expected to follow. (It was a shock to see the London Evening Standard being given away on the streets recently – Ed.)

In Europe, German media giant Axel Springer announced plans to launch iPhone applications (with monthly subscription fees) for its two biggest national German newspapers, Bild & Die Welt.

This change in readership patterns means payment systems will also have to evolve. The FT.com and the Wall Street Journal Online already have successful subscription models, largely because they are focused at the business markets that are not averse to paying for quality journalism.

Targeting the consumer market is trickier, as publishers seek to charge customers for digital versions of newspapers. Anthony suggests micropayments, where customers are charged a nominal amount for access to individual articles, could be the way to go as subscribers may not baulk at paying small amounts at a time.

IPTV

Another rapidly emerging trend is the growth of IPTV. According to Forrester research, 66% of Britons will watch TV via the web in 2014 – and the move to IPTV is likely to start in earnest next year. The technology enjoyed a 53% growth rate worldwide for the year to October 2009, with stronger growth expected in 2010. AT&T claims it now has two million subscribers to its U-Verse IPTV service, including 200,000 new subscriber additions in Q4 2009.

Xbox: Sky Player launching.

The primary early adoption countries (France, USA, China and Hong Kong) are driving growth, but the number of markets with notable IPTV developments has quadrupled in the last five years. 

‘The BBC, for example, is currently working with several partners to bring so-called catch-up TV to viewers in 2010,’ notes Anthony.

‘The new technology – essentially programming on demand – is being developed with hybrid (over the air via cable or satellite and through telephone lines) television sets in mind.’

Other notable moves include Sky launching its Sky Player service onto Microsoft’s Xbox – soon to be available on IP Vision’s Fetch TV service; Tiscali TV offering a range of channels over the internet; and BT Vision providing customers with a range of on-demand content via broadband through a set-top box.

Broadband barrier

However, Anthony notes that current broadband services are a barrier to growth.

‘Although Digital Britain should help to provide universal access, this won’t be for another two years. Luckily, satellite broadband services are set to launch next year which should make 10mbps broadband services available to even the remotest spots in the UK.’

Other trends

Anthony points to a number of other trends to look out for, including content-driven M&A deals and partnerships.

‘After a year of subdued M&A, analysts predict 2010 will see a return to large M&A deals – particularly between broadcasters and mobile providers looking to provide greater content to customers. In 2009, we saw the Daily Mail & General Trust forming a digital advertising partnership with Independent News & Media. And we saw Comcast’s recent announcement to acquire a 51% stake in NBC Universal which will effectively give it full control of an array of programming and content, including Universal Studios. The Channel 4/You Tube partnership is also expected to spur similar link-ups with broadcasters and UK content aggregators.’

Social media

Another trend to watch is the continued development of social media. Research this year indicated that the number of email users grew by 21% whilst the number of social network users increased by 31%. The ease of communication on social networking sites means people are now shying away from email, so this method of communication is expected to become even more obsolete.

‘As technology continues to mature, we see 2010 as being the year of some dramatic changes in the media sector,’ Anthony concludes.

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