Media and telecommunication companies are embracing the new digital technologies and giving consumers wider data allowances, mobile caps and pricing, together with internet and VoIP bundling and "smart phone" features on their home handsets. The competition has indeed benefited consumers.

Media companies are also adapting to the new business environment, exploiting new digital TV channels and offering their digital products to new devices. New payment models are being explored and content is being made available through different on-demand portals and in catch-up formats.

According to research released today by the Australian Communications and Media Authority, the Internet and digital communications more broadly are presenting both challenges and new business opportunities to Australia's existing communication and media sectors.

The report-Changing business models in the Australian communications and media sectors: Challenges and response strategies, confirms communications and media service providers are meeting these challenges by adopting a range of initiatives which seek to both protect existing revenue streams and also enable diversification into other services.

The digital economy continues to empower consumers in Australia with greater flexibility in the use of voice and media services, which enables them to better 'mix and match' services to suit changing lifestyle needs.

'Existing communications and media players are fighting to retain revenue, market share and audience numbers in the face of these changes and are responding with a wide range of initiatives' said Chris Chapman, ACMA Chairman.

'ACMA research suggests that innovative service delivery by the communications and media sectors on an increasing diversity of digital platforms and consumer devices is playing an important role in the Australian transition to a digital economy.'

For the communications sector, faced with declining revenues from traditional voice services, the main responses have typically included:

  • the bundling of voice and content services to customers;
  • the expansion of data quotas to internet users to facilitate increased consumption of content services;
  • more generous mobile caps and pricing packages;
  • the development of mobile applications; and
  • the introduction of incentives to customers to retain their traditional fixed-line telephone service.

For the traditional media sector faced with increasing competition from other content providers, responses have encompassed the development of:

  • internet-based distribution channels for traditional offline content;
  • pay-per view or subscription services for online premium content;
  • internet-based 'catch-up' viewing formats; and
  • new content for the next generation of wireless devices such as smartphones.