A number of fresh predictions for 2006 supplement FutureFacts: Information Industry Outlook 2006, our annual industry forecast. Industry segments like search will grow furiously in 2006, while sectors like the news media will morph business models to stay ahead. Following are Outsell’s predictions for the coming year, and market drivers that companies in these segments will need to watch:
Google, Yahoo! and Others Power Up the Industry – What’s Happening Overall
- Solid Growth in 2006: The information industry will grow 8 percent in 2006, to $306 billion. The Search, Aggregation & Syndication and Market Research sectors, pushed ahead by so-called “disrupters” like Google and Yahoo!, will lead the way. A greater percentage of content used will be subsidized by ads, putting price pressure on fee-based content vendors.
- Valuations Peak: Private equity buyers will keep bidding up prices - there’s more money than targets. Valuations will continue to increase and peak in 2006, and then will start to wane by the end of the year and into 2007.
- Web 2.0 and content/technology mash-ups - where users build on open technology, social publishing, and other people’s content - will take off and go mainstream in 2006.
The News Segment (i.e., companies like Knight Ridder and Gannett)
- It’s Local News: The battle for local news and content users will kick into higher gear, further challenging newspapers to hold on to locally oriented customers. Community blogging and other social media will help. Regional newspapers will test TimesSelect-like models of columnist content, audio/video, archives, and staff interaction, in an effort to create new significant, non-ad, online revenue sources.
- Mating Dance: Newspapers will engage in new mating dances, with GYM (Google, Yahoo! MSN), coupling anew in some areas (mainly ads) and uncoupling in others (mainly editorial) as they try to find a new co-opetition equilibrium that works.
B2B Trade & Company Information (i.e., companies like Hoover’s, infoUSA, TechTarget, IDG, and Reed Business Information)
- Centers of Attention: Leading B2B companies will become hot spots for audiences in target niches. As general engines cast too wide a net, knowledge workers will embrace vertical search sites. Online revenue will move from a single-digit to a double-digit percentage of total revenue, and will make up 35 percent to 50 percent of total revenue in the strongest traditional companies.
Financial Information (i.e., FactSet, Bloomberg, Standard & Poor’s, Interactive Data Corporation)
- Seeing the Forest: Financial institutions will make significant progress toward holistic enterprise data management. Data integration will be in; product bundling and customer segmentation will be core challenges to overcome. Requirements for meeting regulatory obligations and managing risk will be the primary drivers in non-real-time data.
Market Research, Reports & Services Segment (i.e., organizations like VNU, IMS Health, IRI, TNS, Gallup, Greenfield, and Corporate Executive Board)
- Cheap, Fast, and Global: Data acquisition costs will continue to decline with the rise of online market research; real data/real time will continue to drive the next frontier of real-time analysis. Globalization of the market research industry will continue.
IT Research Segment (i.e., Gartner, Yankee, Forrester, IDC)
- No IT Boom: Users Go Peer-to-Peer and Get Tactical: There’s no big tech boom in sight to drive new business. Peer-to-peer service models will proliferate, and clients will focus on tactical information, moving from "what" to "how" questions.
Scientific, Technical & Medical Information (i.e., Elsevier, Thomson Scientific & Healthcare, Wolters Kluwer Health, Springer Science+Business Media, etc.)
- Corporations Drive Growth: Corporations will continue to become more important customers than academia in this space, with their needs driving product development.
- EMR Gets Real: Electronic medical record vendors and hospitals will start to integrate electronic clinical information into EMR systems in 2006.
Search, Aggregation & Syndication
- Good Enough: Enterprise RSS aggregation will take hold in organizations. Fee-based general aggregators will continue to progress up the value chain as cheap or free “good enough” content sources continue to proliferate.
Information Management
- Purchasing Power: Enterprise content buyers will continue to consolidate content purchasing and use their increased buying power to extract better deals from vendors.
- Mind the Gap: The huge gap between knowledge workers' preferences and behaviors and the services delivered by enterprise information managers will widen unless information managers make radical changes.
In September, we published FutureFacts: Information Industry Outlook 2006, the market’s first-ever comprehensive forecast of the trends and drivers fueling the information industry. The report drew extensively from Outsell’s unique industry metrics and analytics, as well as Outsell’s daily contact with leaders across all segments of the information industry and the deep industry experience of our analytical staff. The new predictions supplement the information in FutureFacts, which is available as a free download.
