But in adversity there is opportunity.  While all around markets crash, there are still opportunities lurking.

Above, it was argued above that we are witnessing the continuation of events first started when dotcoms crashed.

Maybe it will end when the next technological revolution begins.

And that is quite interesting, because according to KPMG, content creation in digital entertainment is set to expand; in fact, some go further than that and say it is set for takeoff.  

Venture capitalists are set to increase their investment into these areas too, with 52 per cent of respondents to a KPMG survey believing venture capital investment in digital content creation will increase over the next two years.  More to the point, 25 per cent of those anticipate investment increasing by more than 20 per cent.

Fifty-nine per cent reckon merger and acquisition activity will rise.

“Digital entertainment is a rapidly evolving sector, which has had a tremendous impact on consumer habits,” said David Elms, Media Partner at KPMG, “and despite the economic downturn, investors continue to seek opportunities to invest in companies at the cutting edge of technologies driving the evolution in how we communicate, and access information and content. It is particularly interesting that investors are hedging their bets regarding backing user-generated or professional content, an illustration that there is all to play for as the sector evolves.”

Thirty-one per cent of respondents indicated that mobile applications will receive the most significant portion of increased investment, 26 per cent say technology enablers and 20 per cent indicated social media services.

When asked which mobile entertainment applications would dominate market revenue in 2009, 31 per cent of respondents felt that social networks would, followed by gaming (20 per cent), video (14 per cent), music downloads (20 per cent) and user-generated applications (10 per cent). Additionally, 60 per cent of respondents believe mass adoption of mobile video consumption will take off in the next three years.

“The survey findings clearly indicate that the mobile sector has become a significant area of opportunity for venture capitalists,” said Tudor Aw, Convergence Partner at KPMG, “largely due to the increasing number of consumers who prefer to receive content via their mobile devices.”

When asked about monetising, almost 50 per cent of respondents believe advertising is where the money lies, while 19 per cent believe, much like texting, it is the transport. While perspectives on what is going to truly monetise social media differ, 93 per cent believe that the networks will significantly monetise their online viewership in five years or less.

© Investment & Business News 2013