Online Services - Global Outlook

Global Industry Analysts, Inc, January 2012, Pages: 114

The global outlook series on the Online Services Industry provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. Illustrated with 42 fact-rich market data tables, the report offers a rudimentary overview of the industry, and highlights latest trends and demand drivers. Regional markets briefly abstracted and covered include US, Canada Europe (France, Germany, Switzerland, United Kingdom) Asia-Pacific (Japan, China, India, South Korea, Taiwan) and Latin America.

The report offers a compilation of recent mergers, acquisitions, and strategic corporate developments. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 430 companies worldwide.

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ONLINE SERVICES

A GLOBAL OUTLOOK, JANUARY 2012

CONTENTS

1. OVERVIEW 1
The Internet as a Marketplace: A Review 1
A Peek Into the Business Structure 1
Table 1: Subscription Pricing Model of Online Services:
Percentage Share of Revenues by Validity of Payment Period -
A Peek into Substantiating Numerics Taking the US Market as
a Demonstrative Example 2
Global Online/Internet Services Market 3
Table 2: World Current & Future Analysis for Online Services
by Geographic Region - US, Europe, Asia-Pacific (including
Japan), and Rest of World Independently Analyzed with Annual
Revenues in US$ Million for Years 2010 through 2015 3

Table 3: World 5-Year Perspective for Online Services by
Geographic Region- Percentage Breakdown of Revenues for US,
Europe, Asia-Pacific (including Japan), and Rest of World
Years 2011 & 2015 4
Drivers for the Growing Market 4
Broadband Access 4
e-Commerce 5
Table 4: World e-Commerce Market (2011): Percentage Share
Breakdown of Revenues by Geographic Region- United States,
Canada, Europe, Asia-Pacific (Including Japan) and Rest of
World 5

Table 5: World e-Commerce Market (2011): Percentage Market
Share Breakdown of Payment Service-Visa, PayPal and Others 5
B2B e-Commerce 6
Table 6: World B2B e-Commerce Market (2011): Percentage
Share Breakdown of Revenues by Geographic Region-United
States, Asia-Pacific (including Japan), Western Europe and
Rest of World 6
B2C e-Commerce 6
Table 7: Global B2C e-Commerce Market (2011): Percentage
Share Breakdown of Revenues by Geographic Region 6
Growing Willingness to Pay for Content Online Spurs Growth
of Online Services 6
Online Sports Display the Olympic Spirit 7
Online Dating: Zingiest of the Lot 8
Online Music/Games & Animation: A Market to Mine 8
Table 8: Global Market for Online Music: (2011):
Percentage Breakdown of Revenues by Distribution Format-
One-off Downloads, Hard Format, and Subscription Downloads 9
Online Music - Music Industry's Knight in Shining Armor 9
Record Industry Moves Rapidly Towards the Internet 9
Online Games- Luring Children & Adults Off the Play Ground 10
Online Gaming Market: A Review 10
Table 9: World Market for Video Games (2011): Percentage
Share Breakdown of Revenues by Segment - Online (MMOG and
Casual Online) and Offline 11

Table 10: Global Online Gaming Market: (2011): Percentage
Share Breakdown by Category 11

Table 11: World Video Games Market (2011 & 2015):
Percentage Share Breakdown of Dollar Sales by Segment -
Home Console Games, Online Computer Games, Mobile Games,
Handheld Console Games and Offline Computer Games 12

Table 12: World Market for Video Games Software (2011):
Percentage Share Breakdown of Revenues by Gaming Platform 12

Table 13: Online PC Gamers Worldwide (2010-2012):
Breakdown of Number of Subscribers in Millions 13

Table 14: World Online Gaming Market (2011): Percentage
Share Breakdown of Revenues by Geographic Region 13
Casual and Social Games 13
Massively Multiplayer Online Games (MMOGs) Market: An
Overview 13
MMORPG: A Key Segment in the MMOG Market 14
The Future 15
Online Retailing: A Comprehensive Approach 15
Online Retail Categories 15
Table 15: World Online Retail Market (2010): Breakdown of
Number of Unique Visitors in Million for Leading Retail
Sites- Amazon, Alibaba, Apple, Yahoo! and Wal-Mart 16
Online Travel 16
Table 16: Percentage Share Breakdown of Online Travel
Spending in United States, Europe and Asia for the Year
2011 16
Online Advertising 16
Table 17: World Online Advertising Market (2011):
Percentage Share Breakdown of Online Ad Spends by
Geographic Region 17

Table 18: Global Market for Online Advertising: (2011):
Percentage Breakdown of Revenues for Mode/ Format- Search,
Display and Other Modes/Formats 17
Trends and Issues 17
Continuous Shift Towards Online Advertising 17
Why Online Advertisement is the Most Sought-After
Advertising Medium 18
Online Advertising Spreads its Wings into SMEs 18
Online Industry Welcomes Open Source Solutions 18
Rich Media Market Rapidly Undergoes Changes 18
Present Scenario 19
Video Streaming - A Multifaceted Advertising Mode 19
Table 19: Digital Video Streaming Market in the United
States (2011): Percentage Market Share Breakdown for
Netflix, Comcast, Apple and Others 19
Software Technology Improvements Facilitate Online Ads 20
Other Side of Online Advertising 20
Major Bottlenecks in Online Advertising 20
Online Insurance Advertising 20
Factors Driving Growth 21
Social Networking 21
Social Networking Websites: Trends and Issues 21
Facebook: Social Networking Giant 22
Video on Demand (VOD) Services 22
Table 20: Global Market for Video on Demand (VOD) Services
(2011): Percentage Breakdown of Subscribers by Region- North
America, Europe, Asia, and Rest of the World 22
e-Recruiting 22
e-Governance - An Overview 23
e-Learning/Tutoring: An Overview 23
E-Tutoring: A New Phenomena 23
E-Tutoring - An Attractive Outsourcing Opportunity 24
Table 21: US Market for Private Tutoring (2011): Percentage
Breakdown of Revenues by Online and Offline Private Tutoring 24
Online Photo Services Treading High Growth Track 24
Online Shopping - A Burgeoning Sector in the US 24

2. STRATEGIC CORPORATE DEVELOPMENTS 25

3. PRODUCT LAUNCHES 37

4. TECHNOLOGICAL ADVANCEMENTS 42
Broadband Audio-Visual Services - An Emerging Concept 42
Benefits of BAV Services 42
Consumer Perspective 42
ISP Perspective 42
Content Provider's Perspective 43
Advertiser's Perspective 43

A REGIONAL MARKET PERSPECTIVE 44

1. UNITED STATES 44
Overview 44
Leading Online Service Categories 44
e-Commerce 44
Table 22: North American e-Commerce Spending in US$ Billion
for Years 2008 through 2011 45

Table 23: e-Commerce Spending in the United States (2011):
Percentage Breakdown of Spends by Category 45

Table 24: Business-to-Business e-Commerce in the United
States (2011) - Percentage Share Breakdown of Revenues by
Sector 45
e-Procurement 46
Online Advertising 46
Table 25: US Online Advertising Market (2011): Percentage
Breakdown of Revenues by Mode/ Format- Search, Display Ads,
Classifieds, Rich Media, Sponsorship, Referrals, Slotting
Fees and E-Mail 46

Table 26: Online Advertisement Expenditure of Healthcare
and Pharmaceutical Industry in the US Represented As a
Percentage of the Total Online Ad Spends for Years 2009
through 2011 47

Table 27: Telecommunications Websites in the United States:
Percentage Market Share Breakdown of Number of Visitors by
Online Site for the Month of October 2011 47

2. CANADA 48
Leading Online Service Categories 48
B2C e-commerce Gains Momentum 48
Table 28: Online Shopping in Canada (2009-2011): Penetration
of Online Shoppers Presented As a Percentage of Total
Internet Users 48

Table 29: Canadian Online Shopping (2010): Percentage Share
Breakdown of Online Shoppers By Type of Orders Placed Over
the Internet 49
Internet Advertising Expenditure to Register Good Growth 49
Table 30: Canadian Online Advertising Market (2011):
Percentage Share Breakdown of Revenues by Mode/Formats-
Search, Display and Other Modes/Formats 50
Online Banking 50
Table 31: Online Banking in North America (2010): Percentage
Penetration of Online Bill Payment Services Represented As a
% of the Total Bank Customers 50

Table 32: Mobile Banking in Canada (2011): Percentage Share
Breakdown of Mobile Banking Customers by Type of Mobile
Platform 50

3. EUROPE 51
Leading Online Service Categories 51
e-Commerce 51
Online Advertising 51
Table 33: European Online Advertising Market (2011):
Percentage Share Breakdown of Revenues by Mode/
Format-Search, Display and Other Modes/Formats 52
Focus on Select Regional Markets 52
France 52
Overview 52
Table 34: French Online Advertising Market (2011):
Percentage Share Breakdown of Revenues by Mode/ Format-
Search, Display and Other Modes/Formats 52

Table 35: French Online Retail Market (2011): Percentage
Share Breakdown of Revenues by Segment 52
Germany 53
Leading Online Service Categories 53
Table 36: German Online Retail Market (2011): Percentage
Share Breakdown of Revenues by Segment 53

Table 37: German Online Advertising Market (2011):
Percentage Share Breakdown of Revenues by Mode/ Format-
Search, Display and Other Modes/Formats 53
Switzerland 53
e-Banking 53
United Kingdom 53
e-Commerce 53
Table 38: UK Online Retail Market (2011): Percentage
Share Breakdown of Revenues by Segment 54
Online Advertising 54
Broadband Potential Pull Marketers Online 54

4. ASIA-PACIFIC 55
Internet Users in Asia 55
e-Commerce 55
B2B Emerges Stronger than B2C 55
B2B e-Commerce 55
B2C e-Commerce Market Lures Western Companies 55
Online Advertising 56
Table 39: Asia-Pacific Market for Online Advertising (2011):
Percentage Share Breakdown of Revenues by Geographic Region -
South Korea, China, Australia and Rest of Asia-Pacific 56
Online Music 56

4a. JAPAN 57
e-Commerce - An Overview 57
B2B e-Commerce 57
Online Music 57
Online Gaming 57

4b. CHINA 58
Leading Online Service Categories 58
e-Commerce 58
Factors Promoting e-Commerce 58
Implications of e-Commerce Revolution 58
B2B e-Commerce 58
B2C e-Commerce 59
Table 40: Chinese Online Payment Service Providers (2010):
Percentage Market Share Breakdown for Alipay, Tenpay and
Others 59
Online Advertising 59
Branded Advertising Vs. Search Ads 59
Online Gaming 60
Table 41: Chinese Online Gaming Market (2011): Percentage
Market Share Breakdown of Leading Players 60

4c. INDIA 61
e-Commerce Market 61
Online Advertising 61
Overview 61
Growth Inhibitors 61

4d. SOUTH KOREA 63
e-Commerce - An Overview 63
Online Advertising Market 63
Table 42: South Korean Online Advertising Market (2010):
Percentage Breakdown of Revenues by Mode/Format - Search,
Display and Other Modes/Formats 63
Contextual Advertising - The Next Advertising Mantra 63

4e. TAIWAN 64
Taiwanese Internet Content Industry 64
e-Learning 64
Online Gaming 64

5. LATIN AMERICA 65
e-Commerce Market 65
e-Commerce and Internet Advertising 65
The Contemporary Developments 65
The Industry Bottlenecks 65
B2B e-Commerce 65
e-Learning 66
Internet Penetration. 66

GLOBAL DIRECTORY

As the internet evolves and mutates, a new breed of online trading takes shape, and the once solely advertising supported content sites/websites are being sustained by two additional revenue pillars - subscriptions and pay-per-view models. The internet is a constantly evolving sphere throwing up opportunities, and risks for the service providers, and the latest trend taking shape is the gradual tapering of the amount of free information slipping through to the surfer. Awaiting the wings of change is a new commercial business model in the making, built on the concept of paying for online information required. The online industry is mutating from a free, advertising based model into a pay and use model, and with broadband gaining widespread adoption, the economics of high-value broadband content works distinctly in favor of this new emerging industry. Vast amounts of online advertising, which were then free, are now charged. Willingness to purchase content online is steadily increasing and unlike the yesteryears, today, online paid content is a business phenomenon no longer bogged down by consumer reluctance to pay. Subsequently, a rising number of internet users are paying for online content, especially entertainment specific content such as music, sports, and games.

e-Commerce and e-retailing are expected to significantly impact growth opportunities in the online services market worldwide. A majority of online users all over the world are estimated to switch over to Internet shopping in the coming years. The Internet plays a critical role in sales processes. Online services for categories such as travel, property, financial services, and staff recruitment hold a promising future ahead. Companies all over the world need to realize that functional websites are the need of the hour and offer more customized services.

Although, not a mainstream content, pornography and gambling continues to generate a large percentage of the total online paid content revenues. And despite its lucrativeness, its mass-market appeal is fairly limited by societal stigmas associated with it, and major portals judicially resist the temptation of offering this, as it can lead to alienation of existing users. But, with the growing professionalization of online content, and with the development of exclusive content, other content categories such as business, investment, finance, and lifestyles are gaining in popularity, leaving pornography and gambling for the niche.

Online paid music services will continue to expand, making its pitch even as the music industry locks horns over the issue of online music piracy. Online music has now become an integral part of the modern web surfer’s life, and is a must have content for millions of broadband subscribers. Key reasons citied for the promising potential of online music is the ease of use of the service, easy, and convenient payment models, and its use on multiple platforms such as internet, CD-ROM, and iPOD. Above 60% of the households with access to Internet enjoy music either directly from the music sites or from downloaded digital music files stored on PCs. Amongst the regular Internet households online in a given month, around 43 million households are prospective audience for digital music. Adults in the age group of 25 to 35 represent 25% of the customer base for legal music services, as against the 19 percent representation of the teenagers in the age group of 13 to 17.

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