UK digital media industry lags behind US

One of the report authors, Kim Thesiger sees a 'huge disparity' between prices in the UK and the US and believes that reducing the cost would help boost the number of Net users.

The report, called Recommendations for Growth: UK Digital Media has been sponsored by Channel 4, PACT, the Arts Council and the DTI and brings together a cross-industry alliance who will continue to act as an umbrella organisation for the relatively new industry of digital media.

The report is the result of growing fears about the image and profitability of digital media in the UK. "We see the digital media marketplace dominated by US products. The UK has a vibrant TV industry and we sell a lot of programmes. That profitability and export success needs to be emulated in the digital market," Thesiger said.

Although Blair and Mandelson are both fans of new technology, the report found there are still many barriers to overcome and called on the government to play a role in this, both in terms of investment and training. "British investors are traditionally cautious about investing in the media and the government needs to persuade them," Thesiger said, adding that the Chancellor's speech yesterday was a 'step in the right direction' with its promise of tax breaks for technology companies.

Thesiger claimed there is a massive shortage of creative and technological skills in the industry and called on the government to set up training schemes and grants to encourage new talent. NESTA (National Endowment for Science, Technology and the Arts) is one such body, recently set up with David Puttnam at the helm.

In terms of the future, Thesiger believes digital media will continue to thrive despite the economic downturn, although he doubts it will ever fully replace linear media. "Convergence will only happen to a certain extent, although I do think most forms of media will eventually be delivered digitally. Newspapers are not dead but we may very well be printing them off our PC rather than popping down the paper shop in future," he said.