Despite growth of new media, media sector overall shedding value

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Boston—The media sector is shedding value overall as the losses by traditional media businesses are not being offset by growth in new-media businesses, according to consultancy Oliver Wyman Group’s “2009 State of the Industry Report,” which was released last week.

The report found that from 2003 to 2008, the traditional media sector—including media agencies, publishing, and broadcast and entertainment—lost 32% of its market value, or $137 billion, while new media (online content and services) gained 102%, or $58 billion.

The mobile communications sector gained, the report found, by developing business models that offer content for mobile devices as a loss-leader in order to generate healthy margins on subscriptions. “Media companies risk becoming add-ons to the telecom players’ plans,” Robert C. Fox, head of Oliver Wyman’s Communications, Media and Technology practice, said in a statement.

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