Business outlook: Consumers to be offered a legion of digital choices

media

Digital will be the story of the year in 1998. Television goes digital in three ways next year, with the launch of digital-terrestrial, satellite and cable platform. The arrival of the new technology has dented media company share prices in 1997. As the City worries, groups such as Carlton Communications and BSkyB are having to spend heavily on digital long before there's any sign of return.

The first digital radio licences are up for grabs this year as well. Elsewhere, non-broadcast groups such as Reed Elsevier will be going digital too as they continue the transition from hardcopy to electronic media.

Currency problems will keep effecting companies like Reuters, Reed and EMI, which have large overseas earnings. Advertising is another uncertainty. While next year's World Cup is likely to create demand for advertising, recruitment ads may see a downturn which would effect, among others, regional newspaper groups.

Consolidation in TV has been fast and furious in 1997. ITV companies like Ulster Television and Scottish Media Group could get snapped up next year but the feeding frenzy is largely over. Similarly, in the regional press the big takeovers are mostly complete - once United News & Media secures the sale of its regional division - but titles will be swapped as the dominant players refine their portfolios.

Other issues to watch out for include the renewal of ITV licences. Channel Three companies will decide in 1998 when they want to renew: the first new licences take effect from 1st January 1999. "Unbundling" will also rear its head. The Independent Television Commission, the television watchdog, could force BSkyB to offer its premium channels separated from its basic channels.

Regulators may also move against Rupert Murdoch's newspaper interests, which have been accused of "predatory pricing". Several amendments have been tabled to the Competition Bill which would make actions for unfair predatory pricing easier to bring.

The Internet continues to promise much commercially but deliver little. None the less, all media players will be investing heavily in anticipation that sometime soon, maybe this year, maybe next, the transition from promise to reality will take place.

Industry players are still unclear as to where the real value in the media is going to lie. Is it going to be with the producers of entertainment, news and sport, or is it going to be with the distributors of product, or will the greatest value lie with those who are able to bring about a winning combination of the two? Whatever the answer, more look destined to get it wrong than right.

- Cathy Newman