‘Cautious optimism’ in new Delvinia study on new media sector growth in 2003

The most recent Delvinia Interactive Inc. Interactive Media Producers Survey strikes a welcome note of cautious optimism this year that the industry may be on the upswing. But, cautions Delvinia head Adam Froman, potential growth in the industry will depend on external factors, including the continued expansion of the Canadian economy. The study, which drew a record 729 respondents to complete surveys, finds that a spate of new companies have sprung up since 2002, which Delvina attributes to individuals who were displaced from larger firms during the market constriction, but who have remained in the field and are now creating their own firms. According to the report: "For 2004, we expect to see a positive shift in the number of companies who have been in the new media industry for two or more years, with the number of companies entering the industry remaining consistent. This leads us to believe that the new media industry is poised for growth."Froman says freelancers in the business are very busy as short-term projects boom. Those freelancers will likely be absorbed into small enterprises as larger companies begin outsourcing their work to design firms, and as individual freelancers are unable to handle the volume of new work. It will be more cost-effective, in some instances, to do work in-house or through a small firm, and those are expected to soon begin hiring. "We haven’t seen the expansion, but everything is poised. What this year’s study shows is the bloodletting has stopped," Froman tells CNM. But, he cautions, it will depend on more activity in the broader economy. "You have to believe that the economy will break out some time…It’s just a little out of our hands right now. We just need the economy to keep on the track it’s taking," he says. Companies that responded to the survey seem to share Froman’s optimism. According to the data, just over six in 10 have an optimistic outlook for the interactive industry over the next year, while 27% say that their industry outlook is flat. Just 12% say that their outlook is negative. "This may be a result of most companies enjoying growth in revenues over the past year and see themselves repeating this success over the next year," says the report. Firms that expressed optimism about the interactive industry’s prospects tended to pick sales and revenue growth as their main reason for the cheery outlook. Increased understanding of the products companies were selling was the second most cited reason for optimism. Companies expressing cynicism tended to cite reduced client spending, and fewer jobs and lower margins most often as the cause. Private and government funding cutbacks were cited as the second most common reasons for doubts about the industry’s prospects.

‘Cautious optimism’ in new Delvinia study on new media sector growth in 2003

Broadcast | July 13, 2004

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