Will Access or Content Drive Consumer Internet/Media Revenues in 5 Years?
One way of illustrating why the strategies AT&T and Verizon now are following make sense is to look at consumer internet and media revenues over the next five or so years. In 2016, about 29 percent of total consumer internet/media revenues will be generated by the internet access function. Some 32 percent of revenues will be generated by third party spending (advertisers).
Paid-for content subscriptions (or on-demand purchases) will contribute about 39 percent of total consumer internet and media revenues in 2016.
In 2021, access might contribute 33 percent of total consumer internet and media revenues; advertising about 32 percent; paid content about 35 percent of total revenues. Relatively speaking, paid content contribution will drop, as a percentage of total, while internet access, as a percentage of total, will grow.
The point is that it makes sense for an access provider with scale to look at the paid content or advertising segments of the business. In 2016, paid content is the single largest segment.
By 2021, each of those revenue segments will represent about a third of total revenues.