Deloitte Media Predictions 2010

The accountancy and consulting firm Deloitte has just published their 2010's media predictions report which focuses on the consequences of technological change - particularly digitization - and are shaped by 2010's economic outlook. Amongst a wide range of topics, they address the demand for on-demand TV, the integration of television and the web and the short-term prospects for 3D television. Below, you can get the top line on their findings.

Linear's got legs: the television schedule stays supreme

DTT TMT¹ predicts that in 2010 most video content will continue to be consumed linearly - that is, according to broadcasters' programming schedules. They estimate is that over 90 percent of all television watched will be via traditional broadcast. Linear will prevail despite the proliferation of technologies, such as digital television recorders (DTRs), pay-per-view, on-demand television and podcasts, all of which permit viewers to opt out of the broadcasters' schedules.

According to the report, the sovereignty of the schedule runs counter to many commentators' expectations. "The fact that schedules still determine what and when the majority sees belies many predictions over the last decade foretelling the imminent demise of schedulers and conventional broadcasters. For the mass market, the vast majority of content consumed is likely to be linear."

Deloitte make the following observations regarding linear and on-demand viewing.

"In 2010, average weekly consumption of scheduled television is likely to run between 20 and 30 hours in major markets. This compares to an average of 90 minutes to two hours for all forms of nonlinear television, whether in the form of DVDs, DTRs, or video-on-demand. To put the contrast in perspective, US consumption of online full-program video would have to rise over 75-fold just to equal scheduled TV viewing.

Linear's supremacy is likely - due to both ease of use and inertia - and may actually increase in 2010. Spikes in TV consumption are driven by new viewing technologies and services such as HD, the adoption of which, is progressing steadily.

Deloitte points out that the availability of on-demand can increase overall demand for scheduled programming. "Content watched using online catch-up services can encourage consumers to watch the next episode. The most popular content viewed online tends also to be the most popular watched via broadcast."

Misperceptions of linear broadcasting's imminent demise may be due to misinterpretation of market data. "In 2010, many surveys of media consumption are likely to feature self-reported data. Respondents to such surveys tend to reflect their idealized selves rather than their actual consumption habits. As a result, documentaries and news programming may be overemphasized, viewing of traditional media understated, and use of new media and new devices inflated."

Further, comparisons of nonlinear to linear are often nonequivalent. "Broadcast is measured by viewers. Metrics for online video include page impressions, page views, unique users, and requests. Often, little distinction is made between a clip and a full program even though the commercial significance for each may vary considerably. The definition of an online "user" may remain vague, as well as the quantification of an online view." Deloitte states that a like-for-like comparison, based on viewing or listening hours, would probably reveal a contrary picture.

Advertisers should carefully analyze the various statistics regarding media consumption. The report states that "if linear continues to dominate, concerns about ad-skipping on DTRs and the possible success of ad-free video on demand are likely overstated, while buying ads on conventional radio and television may remain more effective than some analysts are forecasting. Advertisers should not necessarily accept the common perception that television audiences are in long-term decline. In several mature markets, as well as most developing ones, broadcast television viewing is more likely to rise than decline."

The industry should also consider that, for many, the schedule is far from an inconvenience. "In fact, the scheduler and the content timetable are fundamental threads of the social fabric in many societies. Despite the fragmentation of both television and radio sectors, programming remains a major source of discussion."

They conclude that "in 2010, most consumers of content are likely to remain happily beholden to the schedule, rather than resentful of what some pundits have labeled the "tyranny of the schedule"."

Linear is likely to remain dominant not just in 2010 but for many years to come."

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

DTT TMT predicts that 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 they anticipate that the most popular approach to delivering a converged Web and television experience won't be technology enabled. "Instead a more pragmatic approach is likely to dominate: consumers are likely to fuse standard television sets with existing browser-enabled devices, such as WiFi enabled laptops, netbooks, MP4 players and portable games consoles and smartphones. The convergence of televison and the Web will be driven by the user.

Although 2010 is likely to see increased penetration of internet-enabled TVs, DTRs and set top boxes and also the further development of Web-based "TV widgets" that such kit can display, Deloitte says that most consumers are unlikely to justify a brand-new television just to have additional access to the Web, or wait until they have to buy a new TV. "They want to combine the Web and TV today. They want to discuss a television program with friends (or strangers), read movie reviews before deciding what to watch, search out gossip on a current show or series, or check sports statistics while the game is under way. And they do not want to wait for devices to catch up."

Deloitte also point out that superimposing images or personal commentary over the screen, particularly in a shared viewing situation is likely to be irritating at best or "as appealing as making a romantic phone call in a crowded room."

"One of the major beneficiaries of increased simultaneous usage of the Web and television may be advertising. In 2010, global television advertising is expected to be worth $180 billion, while global online advertising is projected at $63 billion. Commercials viewed on television can direct viewers instantly to websites: it is now possible for a product seen during an advertising break to be purchased before the program resumes."

One step back, two steps forward for 3D TV

Following a bumper year for 3D at the movies, DTT TMT anticipates that expectations will be high for an equivalent 3D-fueled boost to the television sector in 2010. This year should see several significant firsts for 3D television, including the launch of the first 3D TV channels in Europe and North America and the launch of numerous 3D-capable television sets. But 3D TV is likely to face some significant challenges as well.

The report states that "the television sector should drive additional revenues from 3D in the midterm. As with many innovations, such as HD, mass-market demand is not going to emerge overnight. But the mid- to long-term benefits of making 3D television work, in the forms of remaining competitive with other forms of home entertainment, generating incremental subscription revenues, offering a compelling advertising medium, driving equipment sales, and even contributing to the fight against digital piracy, are on the whole significant enough to make 3D more likely than not.

Television should regard the growing demand for 3D at the cinema as amarketing tool for 3D in the home. The more 3D is watched at the cinema, the more viewers will want to have a similar experience in their homes. The more 3D content that is created, the greater the flow of 3D photography and production skills in the industry, and the greater the economies of scale for 3D cameras and production equipment."

You can read much more on these and other subjects, and download your copy of the Deloitte Touche Tohmatsu Technology, Media & Telecommunications 2010 Predictions right here.

¹ Deloitte Touche Tohmatsu Technology, Media & Telecommunications

Associated content

Deloitte Media Predictions 2010

You can read the full report or download from their website, here.