Starting with media, the firm forecasts a rise in TV and radio consumption globally. Deloitte's expert in the TMT industry and its mergers and acquisitions advisory leader, Mark Casey, says this is despite the existence of flexible and popular options such as pay-per-view, podcasts and video-on-demand. He says the traditional media's staying power is based on human dynamics.
“Most people, when it comes to TV, prefer to just sit there and be washed over by content,” says Casey. “Besides, innovations such as pay- per-view are very expensive. They will grow over time, but I don't see there being a major shift this year.”
Last year, two factors shaped the media industry — the economic downturn and digitisation, which has been reinventing the sector globally for some time.
The downturn led to drastic declines in global advertising revenue, knocking many newspapers and magazines. Although predicted advertising growth this year is a mere 2% off the 2009 base of US600bn, online advertising is forecast to outshine other outlets.
Online accounted for less than 10% of the total advertising spend globally last year, but is expected to grow by 10% this year and by 11% next year. Counting in its favour is that, of all advertising platforms, online's effectiveness is most easily measured.
However, it won't grow across all online categories, says Casey. “Advertising tied to an individual's experience on the website is what's become far more important.” An example is social networks. “This is a higher growth area for online advertising than banner advertising.”
The world over, media owners are engaged in debate on how best to monetise their digital efforts. Although respected titles like The Wall Street Journal seem to have found a winning revenue model, most are still battling. “Introducing pay walls is not easy. It's like trying to put the genie back into the bottle,” says Casey, pointing at the now-embedded culture of consumers accessing online content free. However, he says it's worth a try. “Media companies have to do something to stop the flow of blood.”
The third-biggest trend forecast for the media this year is the rise in popularity of 3D television. Europe is already launching the first channels. The SA sector is in the process of migrating from analogue to digital broadcasting.
Moving on to technology, smartphones are expected to take off this year. Driving their growth is the increasing popularity of mobile search applications, which is expected to dominate the strategic direction of this market in the year ahead.
Deloitte forecasts that smartphones will outsell all mobile and desktop PCs by 2011, with advertising revenue generated from searches rising to US$7,2bn by 2012, up from this year's modest US$1bn. The firm says by year end, search will be one of the five most-used smartphone applications, generating fierce competition among search providers.
However, fewer than a handful of players are likely to dominate this space in the medium term, says Deloitte partner Danie Crowther
The predicted growth in smartphones has particular importance for SA this year. The hundreds of thousands of visitors expected for the 2010 World Cup will have a significant impact on the country's network capacity.
Other forecast trends are the evolution of mobile voice calls made via an Internet Protocol-based network (VoIP) to mainstream from niche, reaching millions and raising expectations of what else mobile can do.
There'll also be an increased focus on forcing telecommunication firms to reduce the emission of carbon dioxide, in both developed and developing markets. More reliable network technology could translate into reducing emissions generated by maintenance teams.
Source: Financial Mail
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