NEW YORK – Big media companies will continue to push their content onto ever-more advanced cell phones, say Standard & Poor’s equity analysts.
"Media/telecom partnerships help media companies wring out additional benefits of acquisitions by pushing content onto new platforms beyond the traditional print and television media," said Todd Rosenbluth, an S&P analyst. "In particular, we are seeing partnerships starting to form between wireless and broadband DSL providers such as Verizon Communications and AT&T and we expect to see additional benefits as the telecom providers roll out video services with customized content."
Standard & Poor’s Equity Research Services chief media analyst, Tuna Amobi, "sees emerging technology platforms spurring the convergence of multi- media applications, which could dramatically reshape the business models of media and entertainment companies," says the release.
New media applications with long-term growth potential include MP3 players and portable gadgets; cell phones with broadband; network and web-based video on demand; Internet protocol; video over Internet; and home networking devices such as network ready DVRs, and media center personal computers. "Media operators that do not have a well- articulated digital strategy do so at their own peril," Amobi adds.
According to Scott Kessler, S&P’s equity analyst for the Internet software and services sub-industry, people are spending more and more time online, attracted by compelling internet content and applications. "This is why corporations are going to allocate roughly 5-6% of their 2006 advertising budgets to Internet advertising; and why mainstream media companies have been refocusing their attention and resources online," he says.
S&P equity analyst, Kenneth Leon, pointed out that, in addition to the above technologies, other entertainment companies are pursuing mobile virtual network operator or reseller strategies, of which ESPN Mobile is the latest example. "Despite the low margin opportunities of running an MVNO, entertainment companies see benefit of extending their brand and programming to their customers through mobility," he said.
