UK businesses are in danger of slipping behind their mainland and US rivals through failing to exploit the opportunities of new media.
According to a new report from Deloitte & Touche Consulting Group, there are currently few examples of successful large scale businesses based on Web and multimedia technology. And though the vast majority of businesses see new media as an opportunity, the reality is that most companies are still just experimenting.
Companies face a dual challenge - to move into new areas through new media and to protect their current products, according to Mike Nicholas, strategy consultant at Deloitte Consulting. "They are eager to become involved in new projects that will complement their existing range of products, but they are just as desperate to protect income streams from existing products," he said.
He said that the main threat to these companies is coming from small, innovative start-ups that are encouraged into the marketplace because of the low barriers to entry in the Web environment.
?The successful companies have been able to target a user group that is sufficiently small to tie everyone in through a "eb site. Once this 'community of interest' is established, the group contributes to the site internally and then it becomes very difficult to penetrate and set up a competing site. It?s all about being innovative and then finding the right formula,? added Nicholas.
But some analysts believe that the problem for large companies boils down to insufficient innovative investment. ?Most of these companies have developed new media as a strategic tool, but have no idea of what to do with it,? said John Moroney, principal consultant for new media at research group Ovum.
He added: ?Companies that succeed have mavericks inside the firm that are given a pot of money to experiment with. This is way forward because to find gold on the beach you have to be on the beach in the first place."
Moroney cited board level perception of new media as a reason why the UK is lagging behind other nations. ?UK companies are more risk averse than their US contemporaries. This is understandable as very few people have made any money through new media, but UK businesses have to wake up to the fact that in five years time consumers will have an interactive television in their living room.?
However, Nicholas was keen not to overstate the cultural differences between US and UK firms. ?Though there is more of an inherent willingness to innovate in the US, the risks are principally the same globally and there is no reason why they should be fundamentally different," he said.
He added that there are signs that new media will be taken to the mass market very quickly when the right formula is found. Neil Mellor, Internet marketing manager at BT, agreed.
?In general the UK is failing to exploit new media - no-one is pretending to be making huge amounts of money - but we are on the edge of taking new media from an experimental unit to a business critical tool," he said.
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