• by Wayne Friedman , June 18, 2010

Headlines may be blaring the lower prices in some media, but major media and entertainment executives still believe digital and mobile are the long-term future growth for the ad business.

A new study from Ernst & Young's 2010 global media and entertainment group says 75 of the top media and entertainment companies said revenue potential from the Internet and mobile devices would be key for big gains -- despite reports of declining revenues.

According to E&Y, by 2012 the average per-unit price of video and music content will decrease by almost 25% from the per-unit price in 2009. This comes after a steeper 55% decline for the price of music and the 12% decrease for the price of video between 2006 and 2009.

Currently, the average per-unit price is $3 for music and $6 for video. Ernst & Young estimates total home video and music end-user spending for this year -- digital and physical products -- will come to $28.5 billion compared to $36.4 billion in 2006.

But digital media consumption is set to grow rapidly -- especially as the number of U.S. homes will have both broadband and at least one 3G mobile device. This number has quadrupled during the past five years -- more than 600% on a worldwide basis, according to the report.

Ernst & Young says global penetration of homes with broadband will reach 27% by the end of 2010; with 3G mobile devices getting into 55% of those homes by year's-end.

Digital media users are expected to reach 2.2 billion by 2011 -- more than double the total in 2007.