Brussels, 26/01/2007 (Agence Europe) - According to a new study commissioned by the European Commission, revenue from creative content online will reach €8.3 billion by 2010 in Europe, a growth of over 400% in five years. For the most advanced sectors, online content will represent a significant share of total revenue: about 20% for music and 33% for video games. Thanks to the spread of broadband, the roll-out of advanced mobile networks, and the massive adoption of digital devices, the study shows that mass market online content distribution is becoming a reality, creating unique opportunities for Europe. "The long-awaited digital convergence is becoming an economic reality, creating great opportunities for Europe's consumers, content providers and technology industries," said Viviane Reding, Commissioner for Information Society and Media. "To capitalise may require casting a fresh eye at the technical and legal issues where a modernised and internal market-oriented approach would add value to European content. As I am preparing my 'Content Online in Europe's Single Market' package for the second half of 2007, today's study will prove very useful."
The new study on 'Interactive Content and Convergence: Implications for the information Society' assessed the potential of the emerging creative content online market. It found that although the market is growing steadily, technological, economic and legal challenges - notably intellectual property rights and interoperability - need to be addressed for Europe to have faster market uptake. The study found that Europe trails the United States' lead in developing interactive fixed broadband services, and Japan and Korea's in mobile services.
Today the most obvious roadblock is connectivity. Although broadband is spreading quickly and consumer take-up is enthusiastic, differences between EU Member States risk remaining high. For mobile services, the roadblocks include the slow uptake of 3G in Europe, and the sometimes confusing pricing and structure of data tariffs.
The report explains that many market players still need to adapt to the new distribution technologies which cut across national borders and traditionally separated sectors. This is still a major obstacle to developing content online. However, innovative and collaborative solutions to exploit content online are being found.
Piracy siphons off potential revenue and deters media companies from putting content online. Efficient Digital Rights Management (DRM) systems to manage and protect digital content are necessary for a secure and sustainable roll-out of digital distribution. However, concern over the lack of interoperability or standardisation in DRM may hinder digital content services and devices in the long term, adds the report.
Consumer acceptance of new content services, a lack of specialised skills in media companies, or the cost of digitisation of content, also have a significant market impact.
The report concludes that while some of the obstacles are global, others are due to Europe's market and legal framework. These may significantly slow down growth and competitiveness. As the market matures, evolving business practices will remove some obstacles but others may require measures from industry and EU legislation to provide legal certainty for consumers, content providers and the hardware industry.
Last year, the European Commission public consultation questionnaire on 'Content online in the Single Market' (28 July-13 October 2006) and the public hearing on 11 October 2006 led to more than 175 written contributions, which are currently being analysed for the Commission's forthcoming proposals. The consultation process identified 36 obstacles to the development of online content and assessed their market impact up to 2010. (ol)