By Danny McConnell, Technology Partner at Deloitte Belfast.
It isn’t that long ago that the start of the Christmas break for many of us would have involved each member of the family going through the newspaper or Radio Times to circle what they wanted to watch on television over the holidays.
The terrestrial TV channels would all have their tentpole “Big Christmas Film” – usually a blockbuster from a few years before that was being shown on mainstream TV for the first time, plus an array of familiar family favourite movies and TV specials.
With the rise of on-demand streaming services over the past number of years and TV recorders before them, that tradition has already become a thing of the past for many households and that is a good indicator of a bigger trend in the market.
In this year’s annual TMT Predictions Report – in which the technology, media and telecommunications practice at Deloitte makes its forecasts for the year ahead - we predict that 2022 will be the final year that traditional television from broadcasters, whether live, time-shifted, or on-demand, collectively makes up more than 50% of viewing on all screens in the UK.
We see traditional TV broadcasters’ share of viewing hours among UK consumers - which was 73% as recently as 2017 - falling to 53% in 2022 and then to 49% in 2023. On the flipside, we think time spent viewing content on streaming video on demand will rise from 7% in 2017 to 27% in 2022, and to 31% in 2023.
It will come as no surprise to any of you with children or teenagers who are glued to YouTube, Instagram and Netflix that by 2027, Deloitte predicts viewers aged between 4 and 34 will watch most of their video content via social media, followed by streaming channels.
In contrast, we see viewers aged over 34 continuing to favour broadcast content. The TV screen still holds huge power in its ability to create national water cooler moments and – from a commercial perspective – to broadcast high quality advertising to households across the UK.
It would be a mistake for advertisers to cut the cord with broadcasters altogether and instead I think we’ll start to see an increase in addressable advertising, programmed to show different ads to different households, which has the potential to boost the impact of on-screen advertising even further.
Meanwhile, Deloitte has also predicted that in 2022at least 150 million paid subscriptions to subscription video-on-demand services will be cancelled worldwide, with churn rates of up to 30% per market.
During the Covid-19 lockdowns of the past few years many of us signed up to more streaming services and it’s not unusual for a household to have Netflix, Apple TV, Amazon Prime, Sky, Disney Plus and more to keep everyone in the family happy. Many people will already be reassessing whether they need all of them.
However, overall, we think more subscriptions are likely to be added than cancelled as the average number of subscriptions per person rises. In markets with the highest churn, many of those cancelling will resubscribe to a service they had previously left.
High churn levels will heighten competition between streaming platforms, with Deloitte predicting that platforms may spend up to £150 on marketing a subscription to an individual. We can expect to see streaming service providers using various plays to make their subscribers stay, perhaps teaming up with mobile providers to offer discounted bundles or offering additional types of content, such as podcasts to mobile games, and releasing episodes of the most valued content weekly.
Many households will find a new PS5 or Xbox under the Christmas tree this year and one of our other predictions is thatthe revenue generated by the games console market will rise 10% next year to over £60bn.
Next yearmarks the 50th birthday of the games console with the device now a veteran of the technology industry, outlasting camcorders and CD players, among others. We saw usage of consoles spike during lockdown, with many using their devices as a way to socialise when restrictions prevented people from meeting in person. Usage has remained high as, for many gamers, leaving the game may mean disconnecting from friends.
By the start of next year, we predict there will be 900 million console players worldwide, each bringing an average £69 of revenue per gamer to the industry - comfortably more than each PC or mobile gamer. We’re forecasting that console owners will have more than 200 million multiplayer and games subscriptions next year and by 2025, these subscriptions will likely generate a massive £8bn in revenue globally.
Another gift many people will receive this Christmas is a smartwatch or fitness tracker that can be used with smartphones to track health and wellbeing.
Wearable devices saw the biggest increase in ownership of any technology in the UK in 2021 with an estimated 40% of consumers now having access to a smartwatch or fitness band, up from 31% in 2020. Deloitte predicts that 320 million consumer health and wellness wearable devices will be sold worldwide in 2022, rising to 440 million by 2024.
As usage of wearable devices and smart patches continues to grow, so will awareness of the benefits the devices bring to consumer health, wellbeing and potentially the care that they receive. As a result, we’re likely to see Big Tech companies, as well as healthcare professionals and start-ups, focus fiercely on wearable device innovation and investment in the years ahead.
The downside to all of this of course, is that when you decide to go on that post-Christmas health kick and go for a jog after a few weeks of excess, there’s no fooling yourself that you’ve run further and faster than you actually did. The technology is now too good to be wrong!
