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Online Entertainment Grew by 23 Percent in 2010

Consumption of entertainment content is expected to have reached close to $320 billion worldwide during 2010, with the online and mobile digital media segments experiencing the largest percentage growth.

The latest market study by Futuresource Consulting indicates that consumer expenditure on online entertainment grew by around 23 percent, while expenditure on mobile media grew by more than 15 percent -- far outstripping gains made by packaged media, theatrical, cable, satellite and IPTV.

Moving forward, the rise of digital content delivery through mobile and online will continue to drive revenues, with 2009-2014 CAGR forecast at 16 percent and 24 percent respectively.

In recent years, much of the success in mobile has been driven by the growth in smartphones, with the market generating around 280 million unit sales in 2010 -- an increase of 56 percent -- translating to a total installed base of almost 580 million.

Smartphone form factors are continuously being optimized for multimedia content use -- particularly for viewing video, using mobile apps and browsing the Internet. As a result, in the last year, mobile Internet traffic has doubled globally, with the growth in tablets expected to contribute to further activity.

The launch of Apple's Apps store in 2008 created a new mobile content revenue stream, reinvigorating the mobile content industry. A number of other mobile apps services have launched, creating opportunities, particularly for handset vendors, operators, OS suppliers, content holders, publishers, developers and advertising companies.

Over 10 billion apps were downloaded in 2010, and more than 50 percent of those were via the Apple Apps store -- with a total retail value of over $4 billion, even though 85 percent of downloaded apps are free.

Moving forward to 2014, nearly 35 billion apps will be downloaded by consumers, worth $17 billion in new revenue for the mobile digital media industry.

Streaming media activity has been rising significantly in recent months, with consumers more likely to stream content than download it. YouTube, catch up TV and embedded flash/HTML video have been central to driving streaming activity and traffic.

Improvements in broadband performance, advancements in video compression technology and, more importantly, the availability of compelling services have led to a significant continued rise in streaming media activity.

This growth is not exclusive to video: streaming audio has become a mainstream activity through online radio and personalized streamed music services, while streamed social gaming services are also popular.

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