- Deloitte predicts that by mid-2023, all major video subscription services in Europe will have launched an ad-funded tier alongside ad-free offerings
- The first 5G smartphone below $100 will go on sale in 2023
- Global spending on goods and services via social media platforms will surpass $1 trillion (£820 billion) in 2023
- The virtual reality market will generate global revenues of $7 billion (almost £6 billion) in 2023, up 50% from $4.7 billion in 2022
Deloitte’s technology, media and telecommunications (TMT) practice has today announced its predictions for the sector in 2023. These include:
Ads all over – advertising video on demand to spread far and wide in 2023
Deloitte predicts that by mid-2023, all major video subscription services will have launched an ad-funded tier alongside ad-free offerings in Europe.
By the end of 2024, Deloitte predicts that half of these providers will also have launched a free ad-supported streaming TV (FAST) service. Additionally, around two-thirds of consumers will use at least one advertising video on demand service monthly, a 5% increase on 2022.
By 2030, most online video service subscriptions will be partially or wholly ad-funded. Meanwhile, ad funded tiers from subscription video on demand (SVOD) platforms will join existing ad-funded streaming services from broadcasters.
Paul Lee, global head of technology, media and telecommunications research at Deloitte, said: “Advertising video on demand is growing in popularity as video streaming platforms adjust their offerings to attract and retain viewers on household budgets that have been diminished by inflation. We know that consumers are often willing to trade ads for discounted or free content, and AVOD offers a way to keep watching, while also saving. In the UK, consumers average 2.46 subscriptions, meaning that ad-funded tiers may become even more attractive for those aiming to cut costs.”
As seen in your feed – global shopping spending through social media to pass $1 trillion (£820 bn)
Deloitte predicts that spending on goods and services via social media will surpass $1 trillion (£820 billion) globally in 2023. This is a 25% increase year-on-year from $800 billion (£650 billion) in 2022, and $655 billion (£540 billion) in 2021.
This comes as a growing number of platforms are offering e-commerce services, whether it be via ‘content creators’ or brands themselves. Consumers are turning to new forms of online shopping to find the best deals and the easiest transactions amidst increasing pressure on personal spending.
Research published earlier this year showed that, in the UK, 53% of Gen Z consumers and 42% of Millennial consumers are influenced by social media personalities when making buying decisions.
Danny McConnell, Technology Partner at Deloitte in Belfast, said: “Shopping through social media is increasingly effortless, with purchasing decisions encouraged by personalised deals and the influence of online brands and content creators. For retailers, social media platforms will remain important virtual shop windows, acting as additional streams of revenue and drivers of traffic. It is likely that the social media commerce market will grow as consumers continue to exist in an online world, where products can be sourced, bought and sold at the touch of a button.”
Smartphones more accessible than ever – 5G mobile device to hit the market under $100
Deloitte predicts that 2023 will see the launch of the first 5G smartphones to retail at less than $100. Though this will make up a small share of smartphone sales in 2023, it marks a move towards more accessible 5G devices for consumers across almost all markets.
A $99 5G phone would look and feel similar to that of a top-of-the-line model in size and design, but would instead consist of low-end displays, single-lens cameras, low-power processors and smaller storage capacities. The total sum of these components, plus shipping and assembly, could cost as little as $127. The manufacturer, which could be a telecoms provider, could then subsidise the retail price of the device with additional revenue streams, such as pre-installed apps, and advertisements.
Danny McConnell, Technology Partner at Deloitte in Belfast, commented: “There are a variety of cheaper alternative mobile devices on the market today, but none that offer 5G at a low cost. While $99 will not be accessible for all consumers, it is a significant step from handset manufacturers towards making 5G connectivity more affordable. These devices might also create new opportunities, such as ad-hoc fixed wireless access – providing connectivity to an entire household via a smartphone. However, in the process of prioritising cost efficiency, manufacturers will need to keep the sustainability of their phones front-of-mind and may introduce more recycling schemes to help meet net zero targets.”
Virtual reality could go mainstream – if it can differentiate in real life
Deloitte predicts that the virtual reality (VR) market may generate almost $7 billion (£6 billion) in global revenues in 2023, a 50% increase on 2022’s estimate figure of $4.7 billion (£4 billion). Headsets will generate almost all (90%) of next year’s revenue, with around 14 million units, averaging $450 (£370) each, expected to sell across the year.
Deloitte predicts that the number of actively in-use VR headsets worldwide will reach 22 million in 2023, almost 50% higher than that of mid-2022.
Paul Lee added: “The success of virtual reality relies heavily on content, and the way it can differentiate from everything else in a busy entertainment market. Compared with mobile phones, tablets, laptops, and games consoles, which boast billions of users every day, VR headsets still tend to be used relatively infrequently. The growth of VR will be dependent on the industry creating engaging content that cannot be found elsewhere, which might include an accessible and immersive ‘metaverse’ experience, at a competitive price. Only then will the reality of VR be realised.”