Deloitte releases media trends for 2007

17 Jan 2007

The Technology, Media and Telecommunications (TMT) practice at Deloitte earlier this week announced its predictions for the media sector for 2007, forecasting that social networking sites will tap into a larger profitable market by charging for privacy. Two other key trends are tax in the virtual world and that video on demand may leave you waiting.

Danie Crowther, head of Deloitte's TMT practice, comments: "Social networking's appeal has so far been strongest amongst younger demographic groups. However in 2007, social networking companies will look to extend their appeal, as they seek further potential revenues. Older age groups could prove to be a lucrative opportunity for online social networks as these groups would be far more willing to pay for privacy. All of this sits well with the prospects of South African companies in the light of the 2010 World Cup.

"Premium subscriptions, in addition to the guarantee of privacy, could also offer a range of value-added services from voice messaging to group chat, from online storage to webpage design. As premium users are likely to be older and less technologically literate, technical support may also be in demand, ideally on a paying basis."

Virtuanomics

Real economies are emerging within digital online fantasy worlds. The largest virtual worlds, such as Second Life, collectively host millions of citizens, some spending many hours every day living their virtual lives. The real world value of transactions taking place in virtual worlds is rising steadily, and is likely to continue growing through 2007. The value of this trade may, based on recent growth, become large enough to also attract the attention of tax authorities.

Crowther comments, "Virtual fantasy worlds have become a serious business in their own right. There is a steady blurring of the line between fantasy and reality, which is leading real people to spend real money on entirely virtual goods and services. Real companies are also promoting or even offering virtual versions of their products for real money."

Video-on-demand

2007 should see substantial growth in the number of movies that are made available for download via video on demand (VOD) over the Internet to PCs. VOD's allure is that it has the potential to exploit the 21st Century consumer's passion for instant gratification.

"Where as streaming video appears to be working well, video downloads will encounter some challenges in 2007, particularly when downloaded to PCs. A high-definition video on a one Mbit/s DSL connection could take the best part of a day to download. A trip to the local Blockbusters would be a lot faster," cautions Crowther.

For a full copy of the report with all the 2007 Deloitte predictions, email or visit www.deloitte.com/za.