Australia ranks eighth place in the world for its potential to make profits from digital innovations and companies, according to Ernst and Young.
A new report has found that Australia comes in at number eight on the list for ‘digital attractiveness’ due to low market costs and risks.
Rather predictably however, the report states that local media and entertainment companies need to set their sights on overseas targets to achieve maximum growth.
The findings are based on EY’s Global Digital Media Attractiveness Index (DMAI) which ranks countries against a scorecard based on potential earnings from digital media.
“While Australia provides a stable and mature platform for digital investment, market conditions need to be improved for growth potential to be realised for both local and global companies," it says.
Elsewhere, it also found that Australia ranks number 10 for ‘ease of doing business’ and ranks number one in terms of political stability and regulatory risk rating.
However, Australia has the second highest number of illegal downloads among the countries surveyed, “primarily due to the delay in local release of overseas content,” it claims.
Ernst and Young Media and Entertainment leader, Oceania, David McGregor, said with about eight million people in the 18-39 age group, “Australia’s smaller ‘millennial’ population meant it has the most addressable market in the DMAI.”
“However, while small, its digitally-engaged and active online population represented significant and largely untapped opportunities for media and entertainment companies.”
The top five countries with the highest net digital earnings potential, combining both cost attractiveness and benefits, are the United States (US), Japan, Germany, the United Kingdom (UK) and China. When ranking just cost attractiveness, Germany comes number one, followed by the US, the UK, France and Australia. When looking strictly at benefits, the US again takes the number one spot, followed by China, Japan, India and the UK.
“To succeed in securing Australia’s status as a leading digital nation, we need to continue to improve cost, speed and access. This clearly involves continued investment in infrastructure but also improved and dynamic competition to stimulate innovation,” McGregor said.
Email Nicola at nicolariches@yaffa.com.au.