Deloitte analyses top trends for the media industry for 2009

Published 23rd January 2009

- Obstacles ahead for live entertainment-

- Television viewing hours to increase –

- WiFi radio set to take off in 2009 -



The Technology, Media and Telecommunications (TMT) practice at Deloitte today announced its predictions for the media sector in 2009, forecasting that live entertainment could struggle in 2009 following many years of sustained revenue growth. However this could provide an opportunity for lesser known acts to break out – the public will still want to be entertained.



The media sector should still see plenty of innovation in 2009, with 3D being one technology that could take-off in the year. An A-list array of producers and directors are releasing films in 3D this year; television broadcasters and manufacturers are developing products and services to take 3D into the living room.



Mike McGregor, head of Deloitte’s TMT practice in Scotland, comments:

“This year’s predictions show there could be a silver lining to a recession, if you are in television. Covering a range of topics, the predictions consider the rising costs of storing online content, whether in 2009 the public may no longer be able to afford to see the biggest stars in the best locations and if this could be the year for WiFi radio?”



Rising stars take on the megastars

After years of spending lavishly on top concert artists and sporting events, the public may no longer be able to afford to see the biggest stars in the best locations. Those unable or willing to pay premium prices may now turn to emerging artists. But manager and record companies should also be willing to defy expectations: good product, allied to strong marketing, could convince some consumers to drop everything apart from premier live entertainment.

Television rediscovers its self-belief

Is there a silver lining to a recession? The answer might be yes if you are in television. Viewing hours tend to increase in tough times as consumers stay at home; indeed, in the latter half of 2008, average viewing hours were already rising. Digital switchover may boost viewing even more. Professionally produced content is now reasserting itself over user-generated content, both online as well as broadcast.





Overall, in 2009, viewing is likely to rise by 30 minutes per week per viewer. So now may be a good time for television to put some distance between itself and other media, with the strongest players investing in content, contracts, and updated infrastructure.



The rising cost of free online content

The public’s fifteen minutes of online fame could fast be receding, given the rising costs of storing content. For the largest sites, hosting user-generated content could cost over US$100 million per year. But the ability to realise revenue from that content remains a challenge. Advertisers are generally reluctant to place ads next to any content that could damage a client’s brand. So to generate revenue, sites may need to start charging to upload or share content.



Good morning, afternoon, and evening, listeners: the dawn of WiFi

radio

Internet radio could take off in 2009. With nearly 1.5 billion Internet users worldwide, two-thirds with broadband access, online radio’s addressable market could grow by 20 percent next year. The increasing affordability of Internet radio sets and the growing use of smart phones with WiFi are two major contributing factors. Broadcasters should also consider how user information could be useful to advertisers. Internet radios have the potential to monitor what, when, and how often consumers listen in—promising a powerful platform for advertisers.



Coming to a theatre near you: 3D a major draw

In 2009, the 3D movie may have its first billion-dollar year at the box office. A growing list of directors and producers are likely to create all future outputs in 3D—and some of the world’s leading directors are planning their first 3D movies. 3D's impact will be limited by the number of venues capable of showing 3D; financing the conversion of others may be tough given today’s economy. But the better 3D movies perform, the better the prospects for investment. This momentum may also force the industry to choose between super high definition and 3D.



Mobile advertising finds it meaning

With global advertising experiencing double-digit decreases and the coming year promising an even tougher economy, mobile advertising’s time may have come. More able than ever before to carry advertising, mobile phones are at their most ubiquitous—and there is a more mature understanding of what mobile can and cannot deliver in advertising.



In 2009, a growing number of campaigns will use the minimalism of mobile to powerful effect—modelling themselves on one of mobile’s most successful campaigns to date—the U.S. presidential election’s use of text messaging. Mobile advertising will really take off when advertising can be sent to the entire mobile community with a single click.





For a full copy of the report with all the 2009 Deloitte predictions please email: lauparsons@deloitte.co.uk or visit the website http://www.deloitte.co.uk/tmtpredictions/



The 2009 series of Predictions has drawn on internal and external inputs from conversations with member firm clients, contributions from Deloitte member firms’ 6,000 partners and managers specializing in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.



ENDS



Notes for editors

In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT and its member firms.

The information contained in this press release is correct at the time of going to press.





Ends



Notes for editors



About Deloitte

In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.