The telecommunication, media and technology industries continues to evolve at a dynamic pace. In 2023, we foresee the rapid advancement and deployment of a range of technologies to help businesses and consumers do more with less.
Breakthroughs in technological developments coupled with changing consumer habits are constantly challenging business leaders as they look toward future growth.
South African consumers, in addition to the burden of load shedding, have had to contend with heightened inflation and rising interest rates due to persistently high food and fuel prices and – according to the latest edition of Deloitte State of the South African Consumer Tracker Report – 88% of SA consumers are most concerned about price increases of everyday purchases among all of the 24 countries surveyed.
From the outset of the Covid-19 pandemic it was clear that other crises would emerge and now, in post-pandemic recovery, the economic crisis and consumer financial stress is at the forefront of market concerns.
The pressure on consumers’ wallets, along with the proliferation of streaming services – each with its own set of must watch content and rising fees – means the ad-free experience is becoming more unaffordable for many households.
We have been polling consumers globally, across multiple markets, and most indicate that they would choose an ad-supported tier either for half the price of the subscription, or for free in exchange for watching ads. It’s almost inevitable that subscription video-on-demand (SVOD) service providers will include ad-funded tiers to their offerings.
Don’t fear the tiers
Our research shows that consumers will accept advertising far more readily than in the past because it gives them flexibility, and the ability to control costs.
We predict that major streaming services that used to be ad free could opt for advertising video-on-demand (AVOD).
We anticipate that by the end of 2023, major SVOD services in developed markets will launch an ad-funded tier to complement ad-free options – which aren’t going away.
But by the end of 2024, half of these providers will also have launched a free ad-supported streaming TV service (FAST). And by 2030, we expect that most SVOD will be partially or wholly ad-funded.
Live sports: The next arena for the streaming wars
Streaming services are the latest to enter the live sports ring with cable, broadcast, and satellite services all contending for fans. In one corner stand entertainment companies and regional sports networks with traditional linear channels that also offer a streaming service. In another corner are the ‘pure play’ streaming providers. In the third corner are tech companies looking to broaden the reach of their streaming services and increase time spent within their ecosystem. Finally, leagues and individual teams are launching specialised streaming services to establish direct connections and serve super-fans.
From soccer to cricket, streaming video providers around the world are spending billions of dollars on live sports rights in a bid to attract, retain, and monetise their audiences via this popular content.
We predict that in 2023, streamers could spend more than US$6 billion on major sports rights in the largest global markets. For perspective, in 2021 the combined content spend by all streaming providers was about $50 billion.
Two recent examples highlight the enterprising approaches streaming providers are taking. In a unique global deal, Apple has committed to spend at least $2.5 billion for the sole rights to stream every US Major League Soccer (MLS) game over the next 10 years via a dedicated Apple TV app. MLS season ticket holders will be able to access the app for free, but everyone else will need to pay for this content (some games will be available for free to Apple TV+ subscribers).
Meanwhile, Viacom successfully acquired domestic digital rights to the Indian Premier League’s (IPL) cricket games in a five-year, $3 billion deal. Disney, which previously won both the digital and linear broadcast rights, will pay IPL $3 billion over the same period to retain the broadcast rights.
Shopping goes social
Propelled by social media influencers and digital-native consumers, social commerce is laying the groundwork for a broader, ‘shoppable’ media landscape.
The social media timeline is the new storefront – and users are not just window shopping. We predict that the market for social commerce will surpass $1 trillion globally in 2023 (See figure 1). That’s assuming an approximate compound annual growth rate (CAGR) of 25% – not unreasonable, considering past growth trends and the continued reliance on all things mobile and digital – driven by the purchases of the more than 2 billion people expected to shop on a social media platform in 2023.
With an expected five billion social media users worldwide in 2023, the social commerce market is growing faster than e-commerce, and shows no signs of slowing down. Fuelled initially by a surge in popularity during Covid-19, the market is continuing to expand despite the restrictions previously put on consumers globally.
So: what’s behind all this growth? Largely, it’s the rise of the ‘creator economy’, the cadre of millions of ‘influencers’ or ‘creators’ who use their clout to promote, advertise and sell products to their captivated audiences. These online personalities have global reach – and to convert these loyal fans into repeat customers, which is largely how they monetise their online content – influencers build relationships with their followers, encourage community among their devotees, and sell their lifestyle with every new snap and selfie.
At around 20% of the global population, millennials (between 29 and 40 this year), dominate the social commerce market – but not to be overlooked is the maturation of many Gen Zs (between 20 to 28), to an age where many have more money to spend. Gen Z is the world’s biggest generational cohort, accounting for more than 30% of the population worldwide – and most of this burgeoning generation of digital natives tend to be all social, all online, all the time. In the future, Gen Zs will very much remain online, where they’ll continue to get hyper-targeted and personalised ads for products they want and need – straight from the influencers they already know and love.
As social commerce evolves globally through continued experimentation and by looking to more mature markets for guidance, it has the opportunity to draft the blueprint for the broader shoppable media landscape, making new products easier to find, simpler to pay for, and quicker to buy across digital experiences.
Beyond 2023
Looking beyond 2023, most digital experiences are expected to be considered ‘shoppable’, and the same tap-to-purchase behaviour available on social media platforms will likely be possible with other online services, too. Imagine watching a cocktail mixing show on a streaming video service.
Just pause, select the ingredients, add the items to your virtual grocery cart, select a delivery time (just before the rugby starts), use mobile payment, wait for the doorbell to ring… et voilå! Drinks are served.
Mohammed Shaikh is media industry leader at Deloitte Africa. His focus is in the technology, media & telecommunication industry with a core focus on the media and entertainment sector. He spends time with CFOs and C-suite executives providing advisory services and supporting them in developing and executing their strategies.
Click on the cover to read The Media Yearbook 2023: Fast>>Forward
