Deloitte & Touche's Technology Predictions for 2007 - Page 3

Dec 29, 2006

Allen Bernard

Media & Entertainment Predictions 2007

Consumer as Media Mogul: Making digital user-generated content useful

Digital user-generated content has been cast as the eventual conqueror of the established media world. However, in 2007 the majority of user-generated content is likely to remain mediocre.

Viewer Participation Explodes: Profiting from participation in television

Audience participation has contributed to the enduring popularity of television since its first days as a mass medium in the early 1950s. Since then, viewer participation has come a long way, and now millions of viewers participate in programs, directly influencing the outcomes of some of the most popular shows in television. This trend is likely to continue through 2007.

Destination: China. Cracking China’s media sector

China’s sheer size and growing importance in the world economy give it an almost irresistible allure and there should be steady growth in the value of China’s media sector in 2007.

Not Paperless Yet. Paper, pixels and profits

The pixel has often been portrayed as paper’s long-term replacement; however in the long run, online may just be another channel to market for quality content. A key reason, in 2007 and beyond, for the enduring consumer appeal and commercial success of print is its practicality and its universality.

Taking Stock: The digital tail comes in many shapes and forms

The Internet has given rise to the online store, which in turn has revealed the long tail: the potential to yield value from media companies’ back catalogs. In 2007, while the potential of the long tail may grow longer still, it may be the thick, short start of the tail that is most productive, the Blockbuster.

It’s a New Media World After All: Analog apples and digital oranges

Media companies, advertisers and even telecommunications operators have been keen to tap into new media’s potential. In 2007, they should continue to do so, but ideally when informed by using only directly comparable statistics. Any company considering new media applications should always consider the total addressable market.

Media Business Models Evolve

The public’s readiness to pay for content varies between geographies, changes over time and is influenced by a growing range of factors, from technology to disposable income. The challenge for media companies in 2007 is to second guess how the public’s perception of value may change, on a market-by-market and even segment-by-segment basis and develop new business models.

Social Networking: 15 megabytes of fame; 1 gigabyte of privacy

In 2007, social networking companies should move rapidly to expand both the appeal and the revenue generating capacity of their services.

DVD vs. VOD: No clear winner in sight

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. However video downloads will encounter some challenges in 2007. The key issue is most likely to relate to the meaning of on-demand. For example, on a typical two Mbit/s DSL network, it can take one minute to download each minute of a movie. Thus in 2007, it may be the case that wanting instant access to blockbusters, a swift walk to the local store may be the most immediate route to satisfaction.

War of the Virtual Worlds: Virtuanomics

Real economies are emerging within digital online fantasy worlds. 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.

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