TV to continue reign as key media channel in 2011

Social networks may find it difficult to sustain their rocketing subscriber growth numbers this year while TV is set to become a “super media”, according to an analysis by Deloitte.

The latest media predictions from the consultant’s Technology, Media and Telecoms practice says that when social networks reach the billion unique user milestone, which could happen by year’s end, growth is set to slow.

The report says that there could be “a ceiling on future growth if global internet adoption continues to expand at the pace that consensus analysts expect.”

The report also says that ad revenue from social media will stay at a “modest” $5 billion (£3.1bn), which is lessthan 1% of the global industry total and gives a low revenue per user of $4 (£2.5).

Deloitte does add that due to a low cost base, social networks might still achieve impressive gross margins, particularly when compared against traditional media companies.

However, Deloitte says that traditional media, particularly television, will remain dominant. Television will see its “super media” status strengthened and “prophecies of the imminent obsolescence of television will again be proved wrong.” The company believes that pay-TV revenue in the BRIC countries will grow by 20% and global ad revenue is set to increase by $10bn (£6.3bn) to $191bn (£119bn).

Fears that digital video recorders (DVR) will impact on ad viewing are also overplayed.

While such players will achieve more than 50% penetration in UK TV households by year end, Deloitte believes the 30 second TV commercial will remain and only fade “If those television viewers record every single show they watch, including sport matches, reality show finals and news bulletins, so they can deliberately avoid commercials.”

The arrival of TVs and set top boxes with a “search” function to pull out specific content is not going to revolutionise mainstream viewing, due to the “inherently passive nature of watching television”.

Lead media partner of Deloitte Ed Shedd says: “This year’s predications show television’s continued strength, which continues to lead all media in total revenues, including ad sales, subscriptions, pay-per-view and licence fees.”

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