Most of 2010’s media predictions are focused on the consequences of technological change — particularly digitization — and are shaped by 2010’s economic outlook. We address a wide range of topics, including demand for on-demand, online advertising, eBooks and eReaders, business models for recorded music, the integration of television and the Web, print’s monetization of digital, the relevance of the vending machine in a digital world, and the short-term prospects for 3D television.
Most video and audio content will continue to be consumed linearly – that is, according to broadcasters’ programming schedules. Our estimate is that over 90 percent of all television watched and over 80 percent of all audio content consumed will be via traditional broadcast. Linear will prevail despite the proliferation of technologies, such as personal video recorders (PVRs), pay-per-view, on-demand television, podcasts, and online music services, all of which permit viewers and listeners to opt out of the broadcasters’ schedules.
Efforts to converge two of the biggest media distribution platforms — the Web and TV — will intensify in 2010. By year-end, more than 30 percent of broadband-enabled households are likely to interact occasionally or regularly with what they are watching on television through some form of computing device. However, we anticipate that the most popular approach to converged Web and television consumption probably won’t be widgets. Instead, a more pragmatic approach is likely to dominate: the combination of existing television sets and standalone browser-enabled devices such as WiFi-enabled laptops and netbooks, smartphones, MP4 players and portable game consoles.
Subscription music services should finally start to thrive. Granted, the track record so far has been poor, ranging from modest success (a few hundred thousand subscribers per service) to ignominious failure. In 2010, the number of paying subscribers — as opposed to individuals who simply register — should exceed 10 million for the first time. With subscriptions ranging between $40 and $180 per year, total revenues are likely to be small, at about US$100 million, especially compared with global sales of CDs ($14.4 billion) or digital downloads ($6 billion). But the decline of the CD is well documented and the medium is unlikely to see a renaissance. This opens a large door for subscription services.
Online advertising spending will not only grow in absolute dollars but is also likely to grow substantially faster than the total advertising market, and continue to gain share.
Standalone eReader devices will likely sell five million units globally. Meanwhile, electronic versions of books (eBooks) could sell as many as 100 million copies. However, more eBooks may be read on PCs, netbooks, smartphones and netTabs than on single-purpose eReaders.
The newspaper and magazine industry will continue to make noises about charging readers for the online portion of their business. But that talk is unlikely to be matched by actions or results. In short, across the entire publishing industry online revenues will continue to consist mainly of advertising.
The next year should see strong growth for video-on-demand (VOD), although the technology behind this growth – the vending machine – may surprise. We expect the volume and value of DVDs distributed via vending machine will double in 2010, mostly due to additional capacity.
Following a bumper year for 3D at the cinema, expectations will be high for an equivalent 3D-fueled boost to the television sector in 2010. 3D TV is likely to face some significant challenges. By year-end subscriber numbers, subscription and equipment revenues, as well as available content are likely to remain negligible.