Rapid change coming to UK digital media sector

28 September 2010

LONDON: The UK's digital media industry is in line for a period of "dynamic growth and diversification", as gadgets like the iPad reshape the way consumers access content.

The Association of Online Publishers, the trade body, surveyed 36 firms from its membership base, representing over 1,500 brands and publications, to establish their priorities in the coming 12 months.

Half of participants boasted mobile applications, while approximately 16% had created apps for Apple's iPad.

More specifically, 60% of those polled now offer free apps, measured against 37% in 2009.

But just 40% and 12% respectively offered paid-for apps.

Producing apps within which users are charged for accessing certain features was the most popular model currently being explored for the latter group.

Some 61% of the panel predicted subscriptions would monetise apps, with sponsorship on 55% and advertising on 46%.

At present, 72% of media owners operate mobile sites, and another 25% hope to introduce such a platform in the next year.

Meanwhile, 65% of companies intend to make more material available through this channel, a rating standing at 91% regarding apps.

Overall, 90% of publishers stated the mobile web would provide substantial opportunities going forward.

Despite this, 38% named their official website as the main medium via which they expected to generate revenues from content, with the iPad and e-readers like the Kindle on 19% and mobile apps on 18%.

Eight out of ten contributors also suggested advertising will remain the primary income source for the foreseeable future.

"When talking about the digital landscape, publishers have generally re-affirmed their belief in the traditional online revenue model," said Tim Cain, head of research and insight at AOP.

"The second most significant industry viewpoint is that quality recruitment and development of skills are amongst the biggest challenges for the digital publishing industry."

High-speed broadband, social networking and internet communities, e-commerce and behavioural targeting were cited as further areas of potential growth.

A majority identified the adverse economic climate as a threat, constituting a decline on the score of 70% registered in the same study last year.

Rights and copyright was seen as a key issue by 42% of respondents, doubling the number in 2009, possibly because web video is experiencing a surge in uptake.

Data sourced from Association of Online Publishers; additional content by Warc staff