As Web spending rises, traditional media is threatened

Posted by Mica Swyers on June 22, 2007 at 11:34 AM

In the next few years, U.S. Web spending in Internet advertising and access is projected to rise by double digits each year according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook. By 2011, the group expects the combined spending to hit $78.4 billion, a projected increase driven mostly by high-speed connections and online entertainment sites.

By 2011, U.S. consumer fees for Internet access are expected to reach $43 billion, fueled by phone-TV-Internet service packages. In addition, broadband access should see an increase of $41.4 billion, exemplifying the integral role the Internet now plays in people’s daily lives.

Indicative of new media’s threatening online presence, video-sharing site YouTube will most likely overtake bbc.co.uk as the most visited homepage along UK users, according to marketing group Hitwise. In the past year, the BBC homepage, one of the most popular online news sites in the world, enjoyed a 13% increase in its share of UK visits. Nevertheless, its current 1.6% lead over YouTube in site visits is down 37% from three months ago and 131% from six months ago.

In the battle for web users, entertainment and social-networking sites such as MySpace are gaining significant ground, which presents quite a challenge for traditional media who hope to increase and maintain their online presence. In the week ending May 26, entertainment websites overtook retail and classifieds websites in user traffic according to Hitwise, which began its comparisons two years ago.

Source: Reuters and The Telegraph