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Volume of DVDs distributed via vending machine will double, according to Deloitte’s Media Predictions 2010 report


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  • Television and radio schedule stays supreme
  • TV and web together take off, but not necessarily on the same screen

The greatest revenue growth for video-on-demand (VOD) globally will come from a surprising source: the humble vending machine, according to professional services firm Deloitte’s Media Predictions 2010 report.

To date in Australia, DVD sales via vending machines haven’t been as popular as they’ve been in Europe, US and Japan. The reason for this is ‘home delivery’ DVD models, offered by companies such as Netflix and Telstra, have had reasonable take up. However, DVD sales via vending machines have the potential to grow significantly in Australia in the next 12 months.

Produced by Deloitte’s Technology, Media & Telecommunications (TMT) practice, the report also predicts that globally the volume of DVDs distributed via this method will double in 2010.

Damien Tampling, Deloitte’s Technology, Media & Telecommunications (TMT) leader in Australia, said this year’s media predictions cover a range of topics, including the supremacy of broadcasters’ programming schedules.

“Over 90 percent of television and 80 percent of audio is expected to be consumed in this manner, meaning linear will continue to reign supreme in 2010, despite the proliferation of non-linear options,” Mr Tampling said.

He added that the concurrent use of the web and TV will take off in 2010. But Internet-connected televisions or set top boxes won’t be driving this. Rather it will be users combining their existing televisions and laptops, MP3 players or other browser-enabled devices that will drive the convergence.

“Websites specifically designed to feed off viewers’ eagerness to react to what they are watching should entertain the public, please advertisers and improve broadcasters’ revenues,” Mr Tampling said.

“There will be ongoing challenges for the newspaper and magazine industry, which will continue to threaten to charge readers for online content.”

Video-on-demand takes off – thanks to the vending machine

Telecommunications has long expected to be the main distribution platform for video-on-demand (VOD). But in 2010, the greatest revenue growth in this space will come from a surprising source: the vending machine. Although the web has already become the most efficient means of distributing short-form content, the volume of DVDs distributed via vending machine is expected to double in 2010.

Drivers such as price (as low as $1 per night) and ease-of-use will be key to the success of the DVD vending machine. In most markets, vending machine rentals are likely to be cheaper than post-based rental services or outright purchase. And vending machines are already future proofed for the migration to HD DVDs, which can reach 25 GB in size. The vending machine model is still likely to face some challenges in 2010, as some content owners may delay DVD sales to vending machine owners until after initial release to protect sales revenues.

Linear’s got legs: the television and radio schedule stays supreme

Though 2010 has been viewed as the beginning of the end for the linear schedule, the gap between linear and non-linear usage will remain substantial. Despite the growing range of non-linear options, most content will continue to be consumed according to broadcasters’ programming schedules, with over 90 percent of television and 80 percent of audio, respectively, being consumed in this manner.

Linear’s lead may even extend in developing countries, where strong television sales will increase viewership, and in developed countries, where the digital switchover is likely to raise linear consumption. Charging for previously free non-linear services could also boost linear.

TV and the web belong together, but not necessarily on the same screen

Melding web content with television programmes should intensify as concurrent use of the web and TV takes off in 2010. But don’t expect a surge in internet-enabled television sales or an explosion in the use of television widgets; converged web and television consumption is likely to be more pragmatic. Converged web and television consumption is expected to be based on existing televisions and devices, with ‘convergence’ being user-driven, given the mismatch between the swelling consumer demand for concurrent web and TV usage and the typical ten-year renewal cycle for televisions.

Users will combine existing sets with standalone browser-enabled devices, most WiFi enabled laptops and Netbooks, smart phones, MP4 players, and portable game consoles. As simultaneous web and television use gains popularity, television producers will be encouraged to create websites that feed off viewers’ eagerness to react to what they are watching.

Publishing fights back: pay walls and micropayments

In 2010, the newspaper and magazine industry will continue to threaten to charge readers for online content, however that talk is unlikely to be matched by action.

To read the full press release and the report, download the attachments below.

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Contacts

Name:
Petros Kosmopoulos
Company:
Deloitte Australia
Job Title:
Corporate Affairs & Communications
Phone:
Tel: +61 3 9671 6093, Mobile: +61 4 0700 0926
Email
pkosmopoulos@deloitte.com.au
Name:
Damien Tampling
Company:
Deloitte Australia
Job Title:
Partner, Corporate Finance
Phone:
Tel: +61 2 9322 5890, Mobile: +61 409 100 905
Email
dtampling@deloitte.com.au

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