Revenue Opportunities Expand for Media Companies
BOSTON – A proprietary study of over 2,000 U.S. households released this week by L.E.K. Consulting, the global strategy consulting firm, found revenue opportunities for media companies hidden under five major new media myths.
The five unearthed myths are:
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Myth: “New media is only for the young”
Opportunity: “Seniors are the undiscovered country for new media”
Among active Internet users, those over 50 years old actually logged the most time on the Internet, however activities differ between age groups
(6.8 hours/week for 18-24 year olds vs. 8.1 hours/week for 50-64 year olds)
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Myth: “Traditional demographics alone (age, gender, wealth) explain new media usage”
Opportunity: “Membership in iPod nation can be more telling”
The “iPod Generation” is more likely to be increasing consumption across all media platforms, 73% of medium and heavy new media users, own a portable music device.
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Myth: “Wealth is driving the adoption of new media”
Opportunity: “Advertising, low-cost subscriptions, and micro transactions open up the market”
Of the heaviest new media users, 47% report an annual household income <$25K
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Myth: “Games are a niche activity”
Opportunity: “Everybody plays”
Gaming continues to be a leading indicator of heavy online, new media usage, with online casual games reaching older and increasingly female demographics.
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Myth: “Free media is the only way to withstand the recession”
Opportunity: “Subscriptions work in recessions too”
Further L.E.K. research findings confirm media companies can survive the current recession by focusing less on transaction-based areas, such as theater, DVD sell through, traditional renting, VOD, and newspapers, all of which consumers are cutting back. Instead, efforts to support media which is “free” (or at least free in the marginal cost sense) will prove beneficial as it is currently experiencing consumption growth.
L.E.K. has worked with a broad spectrum of media and entertainment companies on their most important strategic and financial challenges: Capturing new media revenue, acquisitions, and strategically leveraging media content on to new media platforms.
Julie Wherry (Engagement Manager), Bret Masterson (Vice President), and Dan Schechter (Vice President and Practice Head) all work in the Media and Entertainment Practice in L.E.K.’s Los Angeles Office, and were contributors to this study.
For full details of this study or to schedule an interview with Dan Schechter, please contact Sandra Riel at 617-951-9507 or [email protected]
About L.E.K. Consulting
L.E.K. Consulting is a global strategy consulting firm that specializes in corporate strategy, transaction services, and performance improvement. Founded in 1983, L.E.K. currently employs over 900 professionals in 20 offices worldwide. Global clients include Fortune 500, FTSE 100, Eurotop 300, and many of the largest firms in Asia-Pacific. With a reputation for solving the most complex issues, L.E.K. collaborates with business leaders to accelerate the pace and precision of strategic decision-making. www.lek.com
