Forecasts for 2011 in media

 
Steve Dinneen
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Deloitte yesterday unveiled its telecoms and media predictions for the coming year.

And while Steve Jobs may have temporarily stepped out of the limelight, technology he has championed – including digital downloads and video calling – dominates the list.

Deloitte believes 400m phones with front facing cameras for video calls will be shipped in 2011, with the format becoming cheaper and of a far higher quality. However, the firm believes consumers will continue to give the technology the cold shoulder, with demand remaining low.

Wi-fi hotspots will be increasingly important, with customers unwilling to pay data charges for streaming video over 3G networks. Deloitte also says it does not expect next generation 4G networks to take off in 2011.

In media, Deloitte expects TV to continue to hold its own against the barrage of new media. It says the number of households with digital video recorders will hit 50 per cent but believes the majority of consumption will still be live TV, which is good news for traditional advertising.

This year will be the first time digital sales outstrip CD sales in a major market, with the US probably reaching the tipping point marginally ahead of the UK. Record companies are set to continue the trend towards live music rather than recordings, although overall investment in artists looks set to fall by $500m.

The gaming world is set to change dramatically, with an explosion in downloadable games and increasingly complex revenue models, including subscription fees and in-game purchases, which could eventually represent half of the industry’s revenue.

Deloitte believes social networks – led by the $50bn-valued Facebook – will churn out an astonishing two trillion adverts but only pull in $5bn in revenue. It says that by the end of 2011 half of computer-based internet users could be signed up to a social network, placing a potential glass ceiling on future growth.

WHAT TO LOOK OUT FOR THIS YEAR

TV
TV will continue to fend off attacks from new media. On-demand will reach half of homes but live viewing will remain the norm for most people.

GAMING
Revenue and distribution models will shift dramatically this year, with more subscription fees and downloadable games on offer.

MUSIC
Music sales will reach the tipping point where downloads outstrip CD sales for the first time in a major market. Live music will continue to drive revenue.

NETWORKS
Social networks will produce an estimated two trillion adverts, generating $5bn in revenue. Upward trajectory could be capped as the market matures.

MOBILE
Video conferencing will become a staple on mobile phones but consumers will continue to snub the technology in favour of good old voice calling.

WI-FI
Wi-fi will remain important for users of mobile devices thanks to the prohibative cost of data usage. 4G
networks will not usurp 3G this year.