New media firms face curse of diminishing returns

NEWS The average new media company spent more than £5,500 acquiring each individual client over the last two years and now faces a difficult battle to reap significant returns on investment. A report by mergers company Broadview added that, in comparison to the heavy outlay, each client only created revenues of £740. Victor Basta, Broadview's co-president, told the Observer: "These companies have spent so much that they will have a hard time recouping the money spent in the first two years." Basta claimed companies such as Vivendi, which has cross-media interests ranging from internet to mobile phones and TV, are best placed to survive. Broadview researched a broad range of companies from the telecoms, media and technology sector, including mobile operators and ISPs. For related news, see:
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