The big money notices the Internet

January 2007

As another year dawns, and the internet spreads its silken threads still further. Just at the moment, there is a distinct whiff of “if you can’t beat ‘em, join ‘em” coming from the non-internet media world. Having been fighting a pretty uneven and sometimes spiteful brawl with the internet, all the newspapers, radio, television, film and the rest are rushing to form alliances with the big cyberspace players. And if you think that Murdoch’s media empire is big, wait until Yahoo and Google have finished work.

For example, in November last year, a group of newspapers in America with a combined circulation of around 12 million (more than the entire UK daily newspaper sales) did a fairly historic deal with Yahoo that will enable those papers to tap into the online market. Initially, it will involve placing job advertising on Yahoo’s HotJobs service but will include other types of online advertising in due course.

This will allow the newspapers to generate an income from the growing internet advertising mountain at a time when they are struggling to find ways to counter the massive internet-bound migration of advertising income at present.

This news follows a deal that Google have done that will allow adverts they do not have room for online (yes, they are that successful) to overflow into newspapers. What’s more, Google are also testing a similar service to plant radio adverts, which will make it possible for anyone to arrange radio advertising, through Google, anywhere in the world,.

Then there are the film companies. Just like the record companies they have finally recognised that there is money to be made from making genuine copies of their back catalogue available to be downloaded. Not before time – anyone with half a brain (which includes most in the film and music industries) could have told them that any company with a warehouse full of product that can be distributed in digital form (and thus via the Internet) should be onto a winner.

In this country, BT is finding it easy to do deals with providers of films and TV programmes to allow them to redistribute them on the Internet, as are other Broadband suppliers like NTL and Wanadoo – and all this after years of the whole entertainment industry being at daggers drawn with this upstart that is the internet, and trying to shut it down.

Even our very own communications regulator Ofcom has called for the setting up of a new public service provider to compete with the BBC, which would distribute TV programs through broadband.

The driving force behind all this excitement is the massive growth in online advertising revenues that we are experiencing. Spending is growing by about 33 percent every year, and the speed of that growth is increasing, too. In turn this is encouraging a colossal growth in online purchasing, as we all become more confident about doing financial deals online.

For example, last year John Lewis reported a blistering 90 percent increase in online sales, and a survey by the British Council of Shopping Centres (I didn’t know it existed either) demonstrated gloomily that men, in particular, are eschewing physical shops for internet shopping.

None of this will come as any surprise to Oldie readers, who, having long memories, will recall how easy it used to be to ring up most local shops to place an order, and have it delivered the next day. Customers like to have it made easy for them – queuing to part with your money is no joy.

Now if we could just get the internet to put the petrol in our cars for us, the age of real consumer service will be back with a vengeance.

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