Blog Post

Digital Media’s Slowest Revenue Quarter Ever

Strategy Analytics has done a nice and simple comparison of revenues from a selected group of online media/Internet companies in Q208 (what it calls its “Digital Media Index”), and shows that revenue growth for these companies slowed to 0.8 percent quarter-on-quarter in Q208, down from 3.3 percent in the previous quarter and 3.4 percent in the same period last year. Google (NSDQ: GOOG), up 3.5 percent quarter-on-quarter, was the only one of the five largest companies that went against the general trend.

Some other conclusions:
— Fox Interactive Media (NYSE: NWS) was the fastest growing digital media company, with 55.6 percent growth in the last 12 months
— Apple (NSDQ: AAPL) iTunes was down 7.0 percent quarter-on-quarter. However this decline is consistent with seasonality for iTunes, and is in line with a 6.9 percent drop in the same period the previous year.

The conclusion: “It seems that not even an emerging sector such as digital media is immune to the global economic downturn.” Oh wait, we were part of the economy? Who knew…

Global Digital Media Index, Top 5 Companies (US$ Million)

Q2 ’07

2007

Q1 ’08

Q2 ’08

Google

$3,872

$16,594

$5,186

$5,367

Change %

5.7%

10.8%

7.4%

3.5%

Yahoo!

$1,698

$6,969

$1,818

$1,798

Change %

1.6%

1.9%

-0.8%

-1.1%

Microsoft (NSDQ: MSFT) Online Services

$688

$2,845

$843

$838

Change %

10.4%

9.1%

-2.3%

-0.6%

Apple ‘Music Related Products and Services’ (iTunes)

$608

$2,670

$881

$819

Change %

-6.9%

7.0%

9.0%

-7.0%

AOL (NYSE: TWX) Advertising

$522

$2,231

$552

$530

Change %

-4.9%

2.5%

-11.0%

-4.0%

Digital Media Index (Quarter-on-Quarter)

110

n/a

138

139

Change %

3.4%

n/a

3.3%

0.8%

Digital Media Index (Trailing Twelve Months)

117

135

145

153

Change %

7.6%

7.8%

6.8%

5.8%

4 Responses to “Digital Media’s Slowest Revenue Quarter Ever”

  1. I think this is all a little misleading. Q2 is typically a slow quarter for a number of these companies – Apple for example enjoys Q4/Q1 spikes for digital media because of hardware purchases over the holiday season, and mini spikes around product launches. Given the focus has been around non-music services as well recently, to quote just the digital media spend is off the mark.

    with respect, I think Strat An need to go back to the drawing board, or rethink some of the garbage they put out.

  2. Rafat Ali

    I am not saying anything…I am reporting on what they are reporting. They are doing quarter by quarter comparisons, not a yearly comparison…but you have a fair point on their analysis.

  3. You are just mentioning 2 quarters and telling that industry is slowing down but of you consider on an annual Trailing Twelve Months(TTM) basis, Digital Media Index grew 31.1% with four digital media companies beating the index; Fox Interactive Media with 55.6% growth, Google with 46.0%, WMG Digital with 38.5% and Apple iTunes with 32.5% annual TTM growth.