Deloitte analyses top media trends for 2013
15 January 2013
The technology, media and telecommunications (TMT) practice at Deloitte today announces its predictions for the media sector in 2013.
Jolyon Barker, global lead for Deloitte's technology, media and telecommunications industry, comments: “This year’s predictions cover a range of topics, highlighting developments for mobile advertising and in the TV sector.
“Deloitte predicts that the television industry in 2013 will commence the roll-out the next generation of high definition TV, known as 4K, offering four times the resolution of the best high definition services currently available. 4K will require new studios, initially costing close to £10 million. Consumers will require new TV sets and personal video recorders (PVRs). Sports broadcasters may be among the first to invest in 4K.”
Ed Shedd, lead media partner at Deloitte, adds: “In 2013 mobile advertising will get split into two categories representing two technologically similar but behaviourally distinct devices - tablets and smartphones. In 2013, the new tablet advertising category should be worth about £2.1 billion and the new smartphone category should be about £3 billion. However advertising revenue per device will be markedly different. In 2013, we estimate ad revenue per smartphone at about £1.55 and that for tablets at £7.90.
“Mainstream broadcasters’ strong brand image and customer loyalty will put them in poll position to grab market share among the increase range of OTT providers. We predict that in 2013, in markets where such services are available, two of the top three OTT TV programme and film services are likely to be those provided by existing broadcasters.
“The availability of OTT access to content - designed to enable customers to see content wherever, will also enable dual video screening in the living room. The coming year will also see more homes operating two video screens in the same room, with consumers watching their own choice of programme or video stream. Initially, dual video screening will be based on one person watching TV on a TV set, with the other watching a stream on their tablet or laptop. Families will use dual screening to enable them to spend more time together without disagreeing over what to watch.”
Driven by demand for larger screens, clearer pictures and the migration of gaming to TV screens, 4K will initially appeal to wealthy early adopters and companies, who will choose between 20 models on sale by year end, about half of which will cost less than £6,200. Commercial 4K broadcast and streaming services are not envisaged in 2013 and viewing will comprise pre-recorded or streamed content, dominated by movies.
The coming year will see test broadcasts and new 4K cameras, with equipment costs set to decline. One current barrier to entry is bandwidth requirements and providers should monitor advances in compression technologies. Satellite-based broadcasters should be in a good position to offer 4K, with satellite capacity growing steadily.
In 2013, we estimate ad revenue per smartphone at about £1.55 and that for tablets at £7.90. The differences by type of advertising reveal a wider gulf. Display revenues, which include in-app ads, are forecast at about 35 pence per smartphone in 2013, markedly lower than that for tablets at £4.40. Differences between search revenue per device are less marked but still significant - at about £1.05 per smartphone and about £3.50 per tablet.
The progression of smartphone and tablet advertising is likely to be linked to their ability to generate e-commerce revenues. While both devices are in their relative infancy, there is a significant gap in the range of content that is readily accessible via each. Companies should also consider how smartphone and tablet advertising is likely to link with other forms of advertising, and other ways of interacting with a company. It may be that the smartphone is the device that drives initial discovery. The tablet is then where further information is gathered, and PC or shop where the transaction takes place.
In the 10 per cent of mature market households expected to dual video screen in 2013 second screeners will typically watch sports events, often using headphones. Multiple cameras at sports venues will increase choice further.
Another key driver of the dual screen trend will be OTT services, offering access to premium content via the internet. Free-to-air broadcasters’ OTT offerings will also facilitate simultaneous consumption.
In many cases TV sets are already a cheaper option than laptop computers and in the medium term there may be a rise in the number of homes with more than one TV set in the same room, with video games enthusiasts likely to lead demand.
Broadcasters can provide dual screening relatively cheaply, suggesting that supply of services will expand with greater demand. Advertising-funded broadcasters and media agencies will carefully monitor the impact of new viewing patterns.
Free-to-air TV broadcasters are likely to offer OTT for no cost, while pay TV companies include OTT access as part of subscription packages. Viewers will likely use broadcasters’ OTT services shortly after first transmission, with freshness of content key to popularity. Deloitte estimates that more than 75 per cent of programmes will be watched within a week of initial broadcast.
The 2013 series of Predictions has drawn on internal and external inputs from conversations with Deloitte’s clients globally, contributions from Deloitte member firms’ 7,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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