Log in

Study: Online Entertainment Investment to Rise by 20%

17 Jun, 2008 By: Erik Gruenwedel

Venture capitalists expect investment in distribution of original entertainment via mobile and social media services to increase by as much as 20% over the next two years, according to a new report.

Created by KPMG LLP, an audit and tax advisory firm, the study polled 300 venture capitalists and found that 52% believe investment in online digital entertainment will increase substantially.

About 25% of respondents said investment would surpass 20%, with respondents evenly split whether investment would target professional or user-generated content.

About 59% of respondents said they expect an increase in mergers and acquisition (M&A) activity between technology and entertainment industries, including 18% who expect M&A activity to soar more than 20%.

The report said 31% of investment dollars would be earmarked toward mobile devices, 26% for technology enablers and 20% for social networking services and related Web sites.

Within mobile entertainment devices, the report found that 31% of respondents believe social networks would dominate, followed by gaming (20%), video (14%), music downloads (20%) and user-generated applications (10%). Additionally, 90% of respondents believe mass adoption of mobile video consumption will take off in the next five years, and 60% expect it will happen within the next three years.

The report said social media services would significantly monetize their online viewership in less than 5 years.

“Activity in the market clearly indicates that the mobile space has become a significant area of opportunity for venture capitalists,” said KPMG partner Brian Hughes. “We've seen new funds created specifically for the mobile sector, and social media also continues to gain traction.”

Add Comment