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Digital Media Revenue Decline

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Global Digital Media Growth Slowed to 0.9% in Q1 2009

The Q1 2009 Global Digital Media Index (DMI) from the Strategy Analytics Digital Media Strategies Service, which analyzes quarterly revenue growth trends for leading digital media companies across advertising, video, music, games, social media and content delivery networks, and measures growth for the digital media sector on a quarterly and annual trailing twelve months (TTM) basis, shows that along with the worsened economic environment, digital media revenue growth continues to drop since Q1 2008.

The Strategy Analytics Digital Media Index grew only 0.9% in Q1 2009 on a seasonally adjusted annual TTM basis, down from 3.4% in Q4 2008 and from 6.6% in Q1 2008. On a year-over-year basis, quarterly digital media revenues grew 3.6% in Q1 2009, down from 29.2% in Q1 2008. While the prolonged economic recession decelerates digital media growth significantly, digital media companies, based on consumer-paid models, are withstanding the economic downturn better than companies focused on advertising.

Source: Strategy Analytics

“Although many digital media companies will still choose the advertising revenue model given the relative ease of gaining user traffic, Strategy Analytics believes that the consumer-paid model is more resilient in the recession as it maximizes the value of content.” commented Jia Wu, Analyst at Strategy Analytics Digital Media Practice and author of the DMI.

“As the US digital media market’s major players suffer from revenue decline, the international market–in particular the European and Asian markets–is still weathering the economic downturn,” said Martin Olausson, Director of Digital Media Strategies (DMS) at Strategy Analytics. “This indicates that international expansion could be one of the solutions for digital media companies struggling with US market growth.”

About Strategy Analytics
Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems and Virtual Worlds.

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