Lack Of Australian Broadband Costing Online Content Industry

Australian media groups could lose AU$500 million (US$416 million) over the next three years due to the lack of availability of faster broadband speeds, reports the Australian IT, although the figures are very back-of-an-envelope. Nick Leeder, operations chief at News Digital media, opines that the move to faster speeds would see usage increase by a further 50 percent or a years worth of growth, which would mean AU$150-200 million (US$125-167 million) per year. One major issue is online video advertising, which makes up 3 percent of the Australian online ad revenue (AU$12 million of the AU$303 million (US$10 million out of $252 million)), whereas “digital advertising agency chiefs generally agree that online video advertising should be contributing as much as 10 per cent of internet spending”. This compares to the US online video market which is predicted by eMarketer to more than double from US$225 million last year to US$640 million this year. Fairfax Digital advertising general manager Liam Walsh said that they did three million a month in streams, and by next year media companies would run out of inventory to sell.

It wouldn’t normally be worth writing about (why would telcos care that media companies weren’t making more ad revenue?) but the Federal Opposition, Labor, has a policy to spend $4.7 billion on building a faster broadband network if they get elected. They’re looking for clear evidence it will benefit the economy and be worth the investment — and the media is obviously for it…

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