The industry has minimal barriers, consistent average profitability of 17.0% and almost unlimited upside
Los Angeles, California (PRWEB) October 26, 2011
The Internet Publishing and Broadcasting industry presents an alluring opportunity, according to IBISWorld, the nation’s largest publisher of industry research. The industry proved extremely resilient to the effects of the 2009 recession, and in fact the consequent drawback and subsequent redistribution of advertising dollars out of print media had a slightly net positive effect. According to IBISWorld, the industry should continue to grow rapidly as advertisers extend the trend of shifting resources toward the internet and as mobile internet service expands opportunities for consumption. Revenue is expected to grow at an average annual rate of 9.9% over the next five years, reaching $64.9 billion in 2016.
The Internet Publishing and Broadcasting industry presents an alluring opportunity. Whilst the four largest companies in the industry (Google Inc., Facebook, Apple Computer, Inc.., and Yahoo) control a large stake of industry revenue, the industry has minimal barriers, consistent average profitability of 17.0% and almost unlimited upside, according to IBISWorld. Its revenue has grown at an annual average of 22.5% since 2006.
In recent years, the Internet Publishing and Broadcasting industry overcame the hurdle that deterred its inception and led to its eventual crash: monetization. Advertising spending has begun to catch up with advertising space, injecting almost $30 billion into the industry in 2011. That number is set to increase further as firms transition brand-building campaigns from old media to new; such advertising comprises 90.0% of all advertising spending, yet still makes up a relatively small portion of internet ad spending. At the same time, the growing popularity of mobile internet connections will vastly increase the amount of advertising that individuals will be exposed to and will further entice advertising dollars. The industry is projected to grow at an average of 9.9% annually for the five years to 2016, with revenue totaling $64.9 billion that year.
The vast majority of that growth is expected to come from increased advertising expenditures.
As for the paid-content market, the picture has not been so rosy. While Apple has been able to capitalize on the success of their consumer electronics and integrated iTunes store to earn healthy returns selling music and video over the Internet, other firms have found themselves caught up in negotiations with content owners and consumers' general unwillingness to pay for intangible goods. Younger generations are increasingly unwilling to pay for intangibles, making future growth prospects for the paid-content business dim. Paid-content currently accounts for 9.7% of industry revenue, and this number is expected to shrink as growth in advertising offsets a stagnant paid-content market.
According to IBISWorld analyst, David Grimes, the industry is doing well. “Revenue is up dramatically in 2011, 24.2% from the year before, to $40.4 billion dollars,” says Grimes. “While the majority of the growth in the industry will filter to the advertising networks that connect advertisers with content sites, competition between the ad networks should drive an increasing amount of money to the content providers themselves.”
For more information, download the full report from IBISWorld on the Internet Publishing and Broadcasting industry
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