Kagan: New media to help boost revenues in 2006

According to Kagan Research, consumer adoption of new technologies will significantly boost media revenues in 2006 and going forward. Media Trends 2006 estimates the online ad market will grow about 21.7% in 2006 to finish the year with 14.5 billion in revenue. Over the next ten years Kagan projects the online ad market will grow at an 8.7% CAGR, reaching 25.5 billion in five years and 33.4 billion by 2016.

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Other market dynamics examined in this report include the advent of alternative video sources, new consumer choices in broadcast, satellite and HD radio, the growth of international revenue streams for the motion picture industry and the uncertain state of traditional media.

"The survivors will be the ones who figure out how to embrace the new and bring their media into the digital age," said Deana Myers, Senior Analyst. "Cable operators have moved to the next level by upgrading their systems to enhance video offerings with digital cable and on demand, while using their increased bandwidth to enter new arenas like VOIP and high speed data."

Media Trends 2006 defines current and emerging trends for 17 major media sectors, and projects sales, services, programming, subscribers, emerging technologies, revenue streams and costs for each sector. Media industry statistics and projections include:

-- Kagan forecasts total wireless data revenues will be the wireless industry's quickest growth area, increasing from 8.4 billion in 2005 to 46.6 billion by 2014. That would account for about 24% of a total 191 billion in 2014 wireless service revenues vs. 7% in 2005.

-- In the satellite radio sector, Kagan estimates subscriber acquisition costs of 615 million in 2005, falling to 549 million in 2014. On a per-sub basis, analysts expect this to continue to decline from $95 in 2005 to about $49 by 2010 and $37 in 2014.

-- Kagan estimates annual VoIP net adds to reach nearly four million in 2006. By 2015, after growing at an explosive 18% per annum, total voice subs (including 2.9 million on circuit-switched platforms) are projected to reach 29 million, generating a lofty 10.2 billion in revenue.

-- Interactive applications for games, t-commerce and advertising will become an increasing portion of subscriber-related multichannel revenue at 3.2% by 2015. Including VOD/PPV revenues, the category increases to nearly 10% in the ten-year outlook.