TMT Predictions 2017


Global Predictions 2018

See what the future holds for technology, media and telecommunications

The technology, media and entertainment, and telecommunications ecosystem remains as fascinating as ever in 2018. Will augmented reality become mainstream? How will machine learning affect the enterprise? What's the future of the smartphone? Deloitte invites you to read the latest Predictions report, designed to provide insight into transformation and growth opportunities over the next one to five years.

Find out more on the latest predictions below.

TMT Predictions 2018

Digital media: the subscription prescription

In 2018, Deloitte predicts that the average adult in the developed world will have an average of two online-only media subscriptions, and by the end of 2020, that average will have doubled to four. The cost of these subscriptions – spanning principally TV, movies, music, news and magazines – will typically be under €10 per month each in 2018. These subscriptions will be in addition to traditional media subscriptions that include online access, such as a pay TV or newspaper subscription that often includes one or more digital passes.

Where do we see this increase?

  • At the start of 2018, we expect to see 375 million video on demand subscriptions. Of this, Netflix will account for circa 120 million subscriptions with other new providers such as Disney and Formula 1 coming online.
  • By the end of 2018, we expect there will be about 150+ million music subscriptions. We expect that unlike video, music will attract relatively few subscribers to more than one service, as each boasts tens of millions of tracks. However, if some major artists become exclusive to individual platforms, services could become specialised, which may force some fans (perhaps begrudgingly) to pay for multiple subscriptions.
  • By the end of 2018, we expect circa 20 million online news subscribers. These subscribers will be willing to pay $1 to $2 per copy and are looking for factual content dense news as well as quality editorial content. Publications have also become more adept at enticing customers to go beyond their paywall by using both free time limited subscriptions and increasing free content on a sample basis.
  • At the start of 2018, we expect 35m video consoles to be connected to subscription services. On a percentage basis, this is a high level of one in three of console owners. Growth in the number of online subscriptions is likely to be driven by an increased emphasis on online multiplayer, rather than individual games. The latest version of the Gran Turismo series, which has sold 70 million copies over the past two decades, is optimised for online play, and offline play options are relatively limited.

While this may seem like a modern phenomenon, it is a follow on to behaviours exhibited a generation back, when households would subscribe to multiple media, including newspapers (morning and evening), magazines and books (adults and kids, from fiction to reference) and analog cable TV. Why did people stop subscribing? A major trigger was the online revolution in the mid-1990s and the accompanying belief that online ad-funded content, shown to hundreds of millions and ultimately billions of eyeballs, would be more lucrative than digital subscriptions. As so much content – particularly news – became free, media companies and their investors started to measure success by metrics such as global monthly web browsers (the number of individual web browsers that hit a site), expecting that revenues would follow the eyeballs. As of 2018, it is possible for a media site to reach hundreds of millions of different web browsers per month, a phenomenal total for a news publisher whose reach would formerly have been restricted to its local market. But as reach has grown, revenue per viewer, visit, impression, web browser or click has steadily fallen. For some publishers, generating sufficient revenue from online advertising alone has felt like an uphill task.

The drive for subscription based online media is twofold;

  • From the subscribers’ perspective, they are now willing to pay for quality news and media without online advertising permeating their viewing.
  • From a supplier perspective, there is a better infrastructure (both broadband and devices) which enable better digital engagement and also an understanding from content creators (which range from Disney to Formula One) that they can now engage directly with a customer without using an intermediary television provider.

We expect this trend to be mirrored in Ireland

  • While there are no official Irish figures for Netflix subscriptions, it is estimated to be more than 250,000 Netflix subscribers in Ireland, with that expected to rise to more than 500,000 by 2020. Our per capita Netflix subscription is third in the world behind the US and Canada.
  • Our broadsheet readers have traditionally been very high which is closely correlated to online newspaper subscriptions, therefore we expect to see this trend being reflected in the Irish market.
  • Ireland has shown itself to be a country that is willing to pay for music content with 60% of Irish smart phone users saying that a music streaming service is important to them.

Wireless home internet could be bigger than you think and of benefit to Ireland’s rural population

With technological developments in the area of Millimeter wave (mmWave), fixed wireless access (FWA) will become a realistic broadband option in many homes across the world who do not have a wired broadband connection. Unlike mobile phone dongles being used to provide broadband, wireless home internet refers to a specific antennae on a building which will connect to a nearby base station, which in turn will have a fiber connection as a backbone to the service.

Until 2018, such connectivity has required very small cells and hence a large number of base stations, similar to what is required for 5G. Speeds are potentially much higher than 4G, with 1 to 2 Gbps being the likely minimum and 10 Gbps possible, all with latency of less than 10 milliseconds and based on information provided publicly, this is being trialled across 15 states in the US by various telco providers. Importantly, the trials are revealing that mmWave technology may be working better than predicted; some trials have seen 1.4 Gbps speeds at distances of about a quarter of a mile and from behind a building. If this proves the case in larger trials, it would make the technology significantly more useful. Globally this is seen as a viable alternative for those people who do not have fibre-to-the-home wired broadband.

There is unlikely to be a single magic-bullet technology; different markets have different weather, geography, density, digging costs and even extent of foliage but such technological developments could be beneficial to Ireland’s rural communities who are awaiting broadband connectivity. With a rural low density population, fiber-to-the-home is a costly solution to connecting rural areas. With other solutions such as satellite broadband and microwave signals having technological limitations, mmWave technology could prove to be the answer to Ireland’s broadband problems. Globally, mmWave could be the answer for both rural populations and those at a lower income who may not be able to afford direct fiber-to-the-home connections. 

Machine learning: things are getting intense

Deloitte predicts that in 2018, large and medium-sized enterprises will intensify their use of machine learning. The number of implementations and pilot projects using the technology will double compared with 2017, and they will have doubled again by 2020. Further, with enabling technologies such as ML application program interfaces (APIs) and specialised hardware available in the cloud, these advances will be generally available to small as well as large companies. 

ML is an artificial intelligence (AI), or cognitive, technology that enables systems to learn and improve from experience – by exposure to data – without being programmed explicitly. Progress in five key areas should make it easier and faster to develop ML solutions while also removing some of the barriers that have restricted adoption of this powerful technology. We are seeing developments in the area of automating data science, reduced need for training an ML model, accelerating training through the use of more advanced chips, ML evolving to start to explain results instead of just throwing out data and the ability to deploy locally rather than needing super computers. Technology vendors including Google, Microsoft, Facebook and Apple are creating compact ML software models to undertake tasks such as image recognition and language translation on portable devices. Google is using TensorFlow Lite, Microsoft has an embedded learning library, Facebook has Caffe2Go and Apple Inc. is using Core ML for on-device processing. Microsoft Research Lab’s compression efforts resulted in ML models that were 10 to 100 times smaller.

Collectively, the five vectors of ML progress should double the intensity with which enterprises are using this technology by the end of 2018. In the long term, these vectors should help make ML a mainstream technology. Advances will enable new applications across industries where companies have limited talent, infrastructure or data to train the models. This means that machine learning will be available to virtually all companies. 

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