29.01.2018 Media industry
Media Subscriptions to Replace Advertising. TMT Predictions 2018
BARD
Some publishers already consider attempts to generate revenue from online advertising a waste of time. According to the "TMT Predictions 2018" report by Deloitte, by the end of 2018, half of all adults in developed countries will have at least two online media subscriptions.
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source: Deloitte, TMT Predictions 2018The TMT Predictions 2018 report by Deloitte experts forecasts that by the end of 2018, half of adults in developed countries will have at least two online media subscriptions, increasing to four by 2020. The cost of these subscriptions, primarily covering television, movies, music, news, and press, will average below $10 per month in 2018. The global subscriber count is projected to reach 350 million people, with 580 million subscriptions, most of which will be VoD (375 million).
Up to 20% of adults in developed countries will subscribe to, or have access to, at least five paid online media subscriptions, and by 2020, this figure could rise to ten.
- "The subscription model has been long known in traditional media, such as print magazine subscriptions. Now, we are witnessing its growing popularity online due to several factors," says Jakub Wróbel, Senior Manager in Deloitte`s Consulting Department. - "The primary drivers are increasingly attractive content available on multiple devices and a growing customer base willing to pay for it."
This trend is also supported by technological advancements and faster internet connections. In Poland, recent years have seen the growth of video services like Netflix, Player.pl, and ShowMax, which also invest in local productions. The trend of "binge-watching," where entire seasons of shows are available at once, allows viewers to spend hours watching on TVs, computers, or phones without interruption.
According to Deloitte’s research, this trend is especially prevalent among millennials, where:
- 90% admit to binge-watching,
- and 38% do so regularly (data from U.S. viewers).
- "As this trend continues, content providers and advertisers will look for ways to leverage it to better reach customers. At the same time, we can expect an increase in content suitable for binge-watching," comments Jakub Wróbel.
The End of Advertising in Media? A Bold Prediction
According to the authors of the "TMT Predictions 2018" report, as media reach increases, revenue per reader, viewer, ad impression, or click is decreasing. Deloitte experts emphasize that, in this situation, some publishers see attempts to generate revenue from online advertising as a waste of time. Consequently, content creators may focus on increasing subscription revenues and creating more varied, audience-specific subscription packages.
This shift is supported by research on ad-blocking trends. Deloitte experts estimate that, by 2018, 10% of adults in North America will engage in at least four simultaneous ad-blocking actions on computers and mobile devices, reflecting a condition known as “ad-phobia.”
Data from 2017 published by Page Fair reveals that:
- Ad-blocking software is installed on 615 million devices worldwide
- 11% of global internet users block ads
- Global ad-block usage increased by 30% in one year
In Poland, ad-block usage reached 33% among internet users in 2017, placing Polish users among the highest in the world for ad-block adoption.
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