Deloitte TMT 2024 Predictions: Generative AI Gains Momentum; Women Athletes Shatter ‘Cash Ceiling;’ Telecom and Semiconductors Get Greener; and Streamers Push for Profits

• Generative AI drives market surge with Generative AI chip sales likely to reach over $50 billion and software revenue is poised for a $10 billion boost in 2024. Generative AI chip prices are high — if you can even get them — but as supply increases next year, prices could drop even while unit growth stays strong. Nearly all enterprise software companies will integrate Generative AI into at least some of their offerings in 2024.
• Women’s elite sports are expected to surpass $1 billion in revenue for the first time in 2024, three times higher than in 2021 levels, inspiring generations of future female athletes.
• Sustainability increases in telecom and semiconductors, with the chip industry taking a smaller byte out of energy and water use thanks to new plants and digital transformation and telcos dialing down the carbon, reducing emissions by 2% by shuttering old networks and pressing the "snooze button" on their 5G towers.
  
• After years of gaining subscribers but not profits, streamers are being driven to tiers and will double the number of subscription models they offer, ranging from deluxe ad-free tiers to options with more ads and less content.
  

NEW YORK, Nov. 29, 2023— Deloitte today released its "Technology, Media & Telecommunications (TMT) 2024 Predictions" report, which highlights the biggest trends in TMT and how they will impact businesses and consumers across the globe. The report sheds light on the growing clout of Generative Artificial Intelligence (AI), the growth of women’s sports, and streaming video’s pursuit of greater profits. The report also highlights efforts to make chips and networks more sustainable.

Kevin Westcott, vice chair, Deloitte LLP, U.S. TMT and global telecommunications, media and entertainment (TME) practice leader said, “Looking into 2024, we’re seeing a clear trend in practical innovation meeting market demand. Generative AI continues to become a critical tool in our tech arsenal. Meanwhile, sustainability efforts in the telecom and semiconductor spaces are making tangible strides in reducing environmental impacts. In media and entertainment, women's sports are shattering revenue records, and streaming services are reimagining their business models.”

Generative AI: From potential to productivity in 2024

Deloitte predicts that Generative AI will reshape multiple industries starting in 2024. The report provides an in-depth analysis of the Generative AI landscape, covering infrastructure and cloud providers, enterprise productivity software, specialized enterprise tools, and engineering and design tools. However, some enterprise customers may be resistant to paying additional fees for Generative AI features.

Generative AI is set to become an integral part of nearly all enterprise software offerings in 2024. Software vendors and IT departments will figure out the right price for Generative AI, ranging from free to $50 per month. The report predicts that enterprise software companies will experience a revenue uplift at a run rate of $10 billion by the end of 2024 — a remarkable milestone for the first year of a new market, but likely short of some expectations, as revenues occur mainly in the back half of the year.

“Generative AI is poised for a breakthrough in 2024, as it begins to follow through on its promise of improving productivity, creativity and enhancing the way enterprises engage with their ecosystems. Expect to see Generative AI integrated into enterprise software, giving more knowledge workers the tools they need to work with greater efficiency and make better decisions. New, high-powered Generative AI chips will accelerate analysis, and as more companies train Generative AI models on their own data sets, they'll get specific insights and even more value. It certainly is an exciting moment in time for the industry and the world. The way we work will be vastly different from this moment on,” said Paul Silverglate, vice chair, Deloitte LLP and U.S. technology sector leader.

Navigating sustainability in tech, telecom and semiconductor markets

As tech devices and connections proliferate, sustainability challenges mount. Telecom and semiconductor companies are growing their business without growing their carbon footprint. Globally, telecom companies are improving sustainability by switching from copper to energy-efficient fiber optics, phasing out 3G networks, and adopting lower power 5G infrastructures. Deloitte forecasts a reduction in the telecom sector’s carbon footprint by 2% in 2024, equivalent to a decrease of 12 million tons of CO2e, with similar reductions anticipated in 2025.

In the semiconductor industry, despite using more energy and water due to growing sales, there’s an expected year-over-year decrease in resource intensity thanks to new eco-efficient manufacturing facilities and new technologies.

Agricultural technology (AgTech) will play a critical role in tackling both food security and environmental sustainability. With a projected global market of $18 billion in 2024, AgTech is poised to revolutionize farming practices, helping the planet and feeding the hungry.

Across all sectors: Increasing profitability with monetization

Tech companies are seeking to monetize advanced technology. Tech companies are facing the complexities of monetizing advanced technologies, particularly Generative AI. The adoption of Generative AI features in software is almost a certainty, but it raises questions about customers’ willingness to pay for these features. As nearly all enterprise software companies are predicted to integrate Generative AI into some products by the end of 2024, the challenge lies not in technology adoption but in finding a pricing model that both captures its value, covers its costs, and is embraced by customers.

The telecom industry will see innovative monetization strategies emerge beyond traditional service offerings. While terrestrial networks continue to be the backbone for almost everyone, there's increasing interest in direct-to-device (D2D) and satellite capabilities to extend connectivity in areas where there is no coverage, and to enable calls for help from the middle of nowhere. A growing ecosystem of satellite and mobile network operators, handset manufacturers and semiconductor companies are looking to connect the unconnected, improve safety and emergency response, and expand IoT applications. Basic services for emergency communication, simple text messages, and IoT monitoring have already started. Over 200 million smartphones capable of connecting with satellite services are expected to be sold in 2024, driving sales of $2 billion worth of specialized chips.

Revolutionizing entertainment: Women’s sports, gaming and media innovation in 2024

The year 2024 is set to be a watershed for women's elite sports. Women’s sports are expected to break the billion-dollar revenue barrier for the first time, reaching $1.28 billion in total forecast revenues, three times higher than in 2021. This growth is fueled by commercial revenue, followed by income from broadcast and game day sources. This is expected to not only boost revenues but also to elevate athletic performance and opportunities for female athletes at all levels and ages.

The media and entertainment (M&E) sector faces the challenge of balancing growth with profitability. Pay TV subscriptions, viewing and ad dollars have been declining, leading to billions in lost revenue and lower profits. The streaming video services M&E companies launched to replace pay TV have mainly been unprofitable despite mostly attracting large audiences. Deloitte predicts the top U.S.-based streaming video-on-demand (SVOD) providers will give consumers more choices, doubling the number of average subscription tiers offered from four in 2023 to eight in 2024.

“In 2024, media and entertainment companies will focus on bringing consumers more of what they want. As streaming services work toward profitability, they’re getting resourceful with how they offer content to viewers. Gaming platforms are giving users the tools to create their own games, which could lead to a boom in quality content, but could be a threat to their own business longer term. And fans of top franchises will see their favorite characters and stories in both games and movies. It's a crucial time as the industry finds new and profitable ways to keep audiences engaged,” said Jana Arbanas, vice chair, Deloitte LLP and U.S. telecom, media and entertainment sector leader.   

Hollywood and gaming get closer. It’s not just about capitalizing on intellectual property; it’s about creating a new form of entertainment that captivates audiences across multiple platforms. High-performing gaming IPs are expanding across media formats, reaching broader audiences and thereby increasing their overall franchise value.

User-generated content (UGC) in gaming could disrupt the industry. Platforms are projected to pay out almost $1.5 billion to content developers in 2024. As this space grows, it risks disrupting the dynamics of the entire gaming industry by making endless cheap 3D content available, with Generative AI possibly accelerating the trend.

The audio entertainment market is on the cusp of significant growth. The market is predicted to surpass $75 billion in 2024, a 7% hike across formats like podcasts, streaming music, radio and audiobooks. Podcasts also offer untapped potential for per-user revenue that currently lags behind other formats, as does radio, which is now more popular with younger audiences than TV.

About this report

Deloitte's annual TMT Predictions report provides an outlook on technology, media and telecommunications trends that may disrupt and transform the business and consumer ecosystems worldwide. Visit www2.deloitte.com/predictions.

About Deloitte

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