Trend 1: Media companies will aggressively trial digital paid content models. Consumers are willing to pay but they are only willing to pay for what they value highly. Media companies need to offer the consumer increased value, a premium experience they can’t get in the free world. Consumers will pay for specialist / exclusive content (e.g. The FT’s Lex Column and The Media Guardian) and content delivered on the platform most convenient to them (e.g. The Guardian’s iPhone App) but would always expect general national / international news for free. Just slapping up a hard pay walls without considerable thought and innovation around the gradations within it would certainly be a disaster.
Trend 2: The battle for IPTV will begin. Just like the mobile sector before it this year will be the year IPTV get serious. Larger PC manufacturers and new propriety boxes will enter the TV market for the first time. Consumers who now have a taste for catch-up TV will increasingly want to be able to download TV shows and movies on demand. In the UK Canvas will get the regulatory approval it needs but will face stiff competition from big players like Google and Microsoft.
Trend 3: Facebook will
launch its own transactions service. iTunes may lack a “social graph” of
active human relationships and doesn’t have the built-in communication channels
that come with it but it does have one of the most successful transaction systems
sround. This year Facebook will launch it’s own payment platform and will make
the service widely available through Facebook Connect. Such a project is likely
to go hand in hand with the launch of their own virtual currency which will
allow standardised micro-payments inside Facebook’s growing range of social
games and applications.
Trend 4: Virtual goods will thrive in Europe and North America. the virtual goods market in China is estimated to be tracking toward $5 billion for 2010, while our latest numbers show the virtual goods market to be heading towards $1.6 billion in the U.S. Direct payment by bank card still seems the most common way to pay. Apps on RenRen integrate with payments provider YeePay, which offers bank card payment, mobile payment via SMS, prepaid card and timed IVR, but NOT credit card payment. Most of the responses are along the same lines — the iPad is going to expand casual and mobile gaming. On the social front, the bigger screen, faster processing speed and Wifi and 3G connectivity means that the device could be especially good for multi-player games.
Trend 5: There will be an increase in technology IPOs. If the economy continues to improve then technology-related initial public offerings will likely increase. Eight venture-backed tech firms went public in 2009, compared to seven the year earlier, according to VentureSource. Those numbers are small compared to past years, and they’re definitely small compared to the numbers of medical and pharmaceutical companies lining up to go public. All that’s needed is a ‘Netscape Moment’ – a large highly publised IPO that represents the cohort of fast growing companies out where. It may start with Twitter, or Facebook, or Zynga or even Yelp, but an IPO wave is coming.
Trend 6: eBooks will start to make significant profits for publishers: Amazon's Kindle will continue to lead the pack but will come under pressure as other manufactures move into the space. The market could stall unless a common standard can be agreed. Publishers could leverage competing technologies to force up prices.
Trend 7: Online marketing spend will outperform analysts expectations. This year will see increases in both search (direct) and brand (display) advertising above what analysists are forecasting. The leap will be most noticeable in display where last year, with the economy down, the display portion of the U.S. online advertising industry had a particularly difficult time. Total revenues in 2009 were down 5.2 percent to $7.5 billion, estimates JPMorgan analyst Imran Khan. But he forecasts that in 2010 U.S. display advertising will rebound 10.5 percent to $8.3 billion. Khan expects U.S. search advertising to grow an even brisker 13.2 percent pace in 2010 to $16.6 billion, after virtually flat 0.8 percent growth in 2009.
Trend 8: Boxed games sales will deign to decline: 2009 was probably the high water mark in terms of boxed games products. With competition from the console download market and from social games the industry will rely increasingly heavily on huge game productions with even larger marketing budgets.
Trend 9: The Android install base will grow quickly leading to a surge in applications: iPhone will continue to be the gold standard and will offer superior device / software integration. Towards the end of the year penetration of the Android OS will increase as the number of devices using it increases. This demand should fuel development of Apps.
Trend 10: Consolidation of traditional media companies will continue apace: Regulation allowing this will have to happen in the UK. I predict BSkyB leading the charge. They have the deepest pockets and with their duel revenue streams will be keen to take advantage of competitors that rely wholly on advertising faltering.
