Merrill Lynch analyst Jessica Reif Cohen came out with a research note earlier this week, after listening to presentations at the firm’s Media & Entertainment conference...the note talks about how traditional media companies are now waking up to the potential in the digital arena, and are taking aggressive steps.

She writes that even though digital for now is a very small portion of revenues, “In our base case scenario, digital EBITDA would account for 5% of EBITDA for Disney, News Corp and Viacom in 2010, with Time Warner reaching 12% due to already significant scale. Using more aggressive assumptions, EBITDA could reach 8-9% for Disney, News Corp and Viacom and over 20% for Time Warner,” in the next 3-5 years.

On whether big media has lost the opportunity, she writes that traditional media is in a better position than perceived. “First, they have multiple touch points with consumers. This provides ample opportunity for cross-platform promotion, a more difficult proposition for Yahoo! and Google. Multiple touch points also allow traditional media companies to tailor cross-platform content experiences to a new generation of consumers who are used to multi-tasking, watching television and surfing the web for instance.”

She adds: “One way or the other, revenue will move online and if the traditional media companies do not move aggressively to capture this revenue it will be lost to more nimble competitors.”