Technology, Media & Telecommunications Predictions 2014 - Deloitte

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Technology, Media & Telecommunications Predictions 2014

Contents Foreword3 Technology5

The $750 billion converged living room: a plateau approaches6



Wearables: the eyes have it10



One became many: the tablet market stratifies13



Massive Open Online Courses (MOOCs): not disruptive yet, but the future looks bright16



eVisits: the 21st century housecall20

Media23

Doubling up on pay‑TV24



Television measurement: for better and worse26



Broadcast sports rights: premium plus28



Performance rights lift recorded music revenues30



‘Cordless’ video‑on‑demand leaps in Sub‑Saharan Africa32

Telecommunications35

Short messaging services versus instant messaging: value versus volume36



Phablets are not a phad39



The smartphone generation gap: over‑55? There’s no app for that42



‘Ruggedized’ data devices at $250: reinventing the business case for mobile field force45

Recent Deloitte thought leadership47 Contacts at Deloitte Touche Tohmatsu Limited (DTTL) and its member firms48 Endnotes49

Technology, Media & Telecommunications Predictions 2014  1

Igal Brightman, 1945‑2013 This edition of TMT Predictions is dedicated to the memory of Igal Brightman who passed away in August 2013. Igal was the Global Managing Partner and Chairman of the TMT Industry Group for nine years, and his tireless energy and enthusiasm helped define much of our practice, including thought leadership. Igal was a pioneering, unflinching supporter of Deloitte’s research into the TMT sector. He was a steadfast advocate of the need for professional services firms to blend functional skills with leading industry knowledge. He was passionate about investing in research, and through Igal’s support from its launch in 2001, TMT Predictions has become one of the flagship research titles used by Deloitte members firms in over 80 countries around the world. Igal has left us, but his many legacies live on, including Deloitte’s commitment to thought leadership.

As used in the Predictions, “Deloitte” refers to the Deloitte Touche Tohmatsu Limited member firm TMT practices.

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Foreword Welcome to the 2014 edition of Deloitte’s predictions for the technology, media and telecommunications (TMT) sectors. TMT Predictions’ objective is to identify critical inflection points we believe should inform industry strategic thinking, and to explain how we think these will manifest over the next 12-18 months. Our perspectives are built around hundreds of discussions with industry executives, analysts and commentators, along with tens of thousands of consumer interviews. As in each year that we have published a set of predictions, the core drivers of disruption in the sector remain the same: processor speed, connectivity and storage. For the past decade, these three drivers have enabled massive advances in the utility, ubiquity and spend on connected devices. In 2014, we expect five connected devices which constitute the converged living room – TVs, PCs, video game consoles, smartphones (including phablets) and tablets – to generate $750 billion in revenue. Despite launching a mere four years ago, tablets are already mainstream and approaching maturity, in that the category now describes a wide, and widening, range of capabilities, sizes, user bases and uses. The largest component in the converged living room group, smartphones ($375 billion revenue in 2014), are nearing saturation among most age groups, although there is still a prime opportunity among people older than 55 – a demographic likely to experience one of the steepest rises in penetration rate this year. Smartphone and tablet vendors are emphasizing ruggedness as a key differen