Technology | Media | Telecommunications

Wednesday, March 18, 2009

Technology, Media and Telecom Disruption

Many traditional Technology, Media and Telecom (TMT) companies are seeing their business models rapidly erode as communication services, news, information and entertainment content all shift to the Internet.

For most telecommunication service providers and media companies, fundamental core business survival is now at stake, according to the latest market study by In-Stat.

These legacy organizations must do more than simply adding functions, such as links to social networking sites, micro-blog messaging, chat rooms, and user comments or feedback. While these functions may help marketing and customer retention efforts, they do not represent a meaningful Web 2.0 business model.

"Web 2.0 business models encompass an ecosystem of partnerships, designed to leverage both internal and external knowledge and assets" says Keith Nissen, In-Stat analyst.

End to end ownership of the entire business model is a lost cause. Telecom operators, media companies and others that are directly affected by the current shift must modify and evolve their business models.

Newspapers acted too slowly to the apparent change in their primary sources of revenue, while clinging to their old ways. They are proof-positive that denial can be fatal -- especially when accelerated market disruption occurs.

In-Stat's market study found the following:

- 78 percent of heavy Internet users regularly use two or more social networking sites.

- Broadband service providers have a key opportunity to provide consumers a "Personal Information Center" (PIC) portal. For example, 66.6 percent of respondents are very or somewhat interested in aggregating access and sharing of personal images through a PIC.

- Personalized content delivery and advertising is a key success factor. Currently, two-thirds of users never click on internet advertising.

- Century-old business models are obsolete. The newspaper industry's downward spiral will result in a loss of a projected $25 billion in revenue annually.

- The IP media phone, potentially the consumer's fourth screen may be an ideal web 2.0 service delivery device. By the end of 2013, In-Stat forecasts that over 16 million U.S. households will have a media phone.