• The Hollywood Reporter, Tuesday, February 13, 2007 11:01 AM

The latest financial disclosures from News Corp. and Walt Disney Co. showed steady growth in the traditional media firms' budding digital departments.

The bulk of their new media revenues, however, came from either a rare original enterprise (MySpace in News Corp.'s case) or the monetizing of traditional media content delivered in digital form. Here's the catch: with the exception of clips from YouTube and MySpace, we're consuming the same content on a different medium. Big media needs some new ideas. Instead, it's myopically focused on fighting piracy, which may be a losing battle.

However, moving forward isn't easy. For starters, audiences are smaller and margins are tighter, so heavy investment isn't worth ityet. Indeed, media companies may be waiting for the next YouTube with a brilliant ad scheme and content that doesn't compromise intellectual property. With the Web, it is more about rapid expansion and gaining the interest of smaller, more targeted groups of users. Expansion is the operative word, and funding is the implication.

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