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The consumer in 2025
Rob Gallagher
Director of Research
Media, Entertainment & Consumer
Ovum
Let’s start with a poll…
Q. Which company will be the most influential in the
consumer market in 2025?
Digital Futures: Th...
The consumer’s world in 2005
Most influential (Relatively) unknown Non-existent
Digital Futures: The World in 20253 © Ovum...
Disruption will be the main constant –
just ask Google
“You look at Google, Apple, Facebook,
and Amazon and say there’s no...
Consumers will invest in
experiences they value
Value
Time
Money
RelationshipsStatus
Emotions
Digital Futures: The World i...
Changes that Ovum really does not expect
• Physical media will be dead
• Pay TV will fall off a cliff
• People won’t pay f...
Digital will attract four out of every ten dollars
spent on consumer media and advertising
Digital Futures: The World in 2...
Total revenues will grow by 43% - but traditional
media and TV advertising will feel the squeeze
267
156
304
240
240
420
0...
Over half of all revenues from consumer media
& entertainment will be from advertising
Digital Futures: The World in 20259...
Success with digital will require an almost
opposite approach to traditional media…
Digital Futures: The World in 202510
3...
… and a fundamental rethink about advertising
and paid media
• Digital advertising needs a
revolution to fulfil its potent...
0
200
400
600
800
1,000
1,200
1,400
1,600
2010 2015 2020 2025
US$Billions
Telco revenue by type, 2010-2015
Broadband Trad ...
Voice and messaging were just for starters:
Social commerce will be the main course
Trad
comms:
$690bn*
CAGR: -4.9% Digita...
A relatively small number of platforms will
drive – and capture – value at scale
• Internet firms will compete
intensely t...
People care more about the ends (content)
than the means (platforms)
Digital Futures: The World in 202515
25% 40% 35%
0% 1...
And no one platform will dominate -
consumers will be everywhere
Digital Futures: The World in 202516 © Ovum 2015, Informa...
Competition will shift from delivery to
multi-platform mastery, data and design
Digital Futures: The World in 202517
Reven...
Disruption will come to “less digital” fields as
IoT connects and maps the real world
Digital Futures: The World in 202518...
Tomorrow's key
battlegrounds: time and
emotions
Value
Time
Money
RelationshipsStatus
Emotions
Digital Futures: The World i...
Key takeaways: The road to 2025
• No one company’s future is assured
• Consumers will invest in experiences they value
• T...
Thank you. Questions?
+44 (0) 7876 791 092 | rob.gallagher@ovum.com
Ovum.com | @OvumTelecoms | @robdgallagher
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The consumer in 2025 - Digital Futures 2025

•How consumers will – and won’t – change •What this will mean for the TMT value chain •Which businesses will thrive and why. Rob Gallagher, Director of Research - Media, Entertainment & Consumer, Ovum

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The consumer in 2025 - Digital Futures 2025

  1. 1. The consumer in 2025 Rob Gallagher Director of Research Media, Entertainment & Consumer Ovum
  2. 2. Let’s start with a poll… Q. Which company will be the most influential in the consumer market in 2025? Digital Futures: The World in 20252 A. Amazon B. Apple C. Facebook D. Google E. Microsoft F. Twitter G. An unknown start-up H. Other © Ovum 2015, Informa Telecoms & Media Ltd
  3. 3. The consumer’s world in 2005 Most influential (Relatively) unknown Non-existent Digital Futures: The World in 20253 © Ovum 2015, Informa Telecoms & Media Ltd
  4. 4. Disruption will be the main constant – just ask Google “You look at Google, Apple, Facebook, and Amazon and say there’s no way competitors can beat them. I’m less certain… in tech, competition isn’t always like-for-like… our biggest search competitor is Amazon…. But more important, someone, somewhere in a garage is gunning for us. I know, because not long ago we were in that garage. Change comes from where you least expect it.” Digital Futures: The World in 20254 Eric Schmidt, CEO, Google, “The New Grundergiest”, Google Europe Blog, 13th October, 2014 © Ovum 2015, Informa Telecoms & Media Ltd
  5. 5. Consumers will invest in experiences they value Value Time Money RelationshipsStatus Emotions Digital Futures: The World in 20255 © Ovum 2015, Informa Telecoms & Media Ltd
  6. 6. Changes that Ovum really does not expect • Physical media will be dead • Pay TV will fall off a cliff • People won’t pay for digital Digital Futures: The World in 20256 © Ovum 2015, Informa Telecoms & Media Ltd
  7. 7. Digital will attract four out of every ten dollars spent on consumer media and advertising Digital Futures: The World in 20257 53% 40% 32% 26% 35% 36% 36% 33% 12% 24% 32% 41% 0% 20% 40% 60% 80% 100% 2010 2015 2020 2025 Global, share of media & entertainment revenues by sector, 2010-2025 Digital TV Traditional Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  8. 8. Total revenues will grow by 43% - but traditional media and TV advertising will feel the squeeze 267 156 304 240 240 420 0 500 1,000 1,500 2010 2015 2020 2025 US$Billions Global, media & entertainment revenues by type, 2010 -2015 Digital advertising Paid digital media TV advertising Pay TV Traditional advertising Paid traditional media Digital Futures: The World in 20258 Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  9. 9. Over half of all revenues from consumer media & entertainment will be from advertising Digital Futures: The World in 20259 0% 50% 100% 2010 2015 2020 2025 Global, share of media & entertainment revenues by type, 2010-2025 Payments Advertising Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  10. 10. Success with digital will require an almost opposite approach to traditional media… Digital Futures: The World in 202510 37% 63% Traditional Advertising Payments 44% 56% TV Advertising Payments 64% 36% Digital Advertising Payments Global, share of media & entertainment revenues by sector and type, 2025 Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  11. 11. … and a fundamental rethink about advertising and paid media • Digital advertising needs a revolution to fulfil its potential • Many people will value experiences over ownership • Consumer notions of quality will change Digital Futures: The World in 202511 64% 36% Advertising Payments Global, share of digital media revenues by type, 2025 Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  12. 12. 0 200 400 600 800 1,000 1,200 1,400 1,600 2010 2015 2020 2025 US$Billions Telco revenue by type, 2010-2015 Broadband Trad comms Total The lost lunch-money mystery: Where’s the value in consumer comms? 2015 2017 Snapchat 73 132 Apple 124 134 BlackBerry 703 800 WhatsApp 4,143 6,579 Digital Futures: The World in 202512 Monthly messages (billions), 2015 and 2017 Source: Ovum © Ovum 2015, Informa Telecoms & Media Ltd
  13. 13. Voice and messaging were just for starters: Social commerce will be the main course Trad comms: $690bn* CAGR: -4.9% Digital media: $153bn* CAGR: 11.0% Digital advertising: $257bn* CAGR: 10.1% P2P mobile payments: $271bn** CAGR: 77.9% Mobile commerce: $683bn** CAGR: 68.6% Digital Futures: The World in 202513 Adjacent opportunities in 2019 Note: *Revenues **Transactions; CAGR refers to growth from 2014-2019Source: Ovum, PwC © Ovum 2015, Informa Telecoms & Media Ltd
  14. 14. A relatively small number of platforms will drive – and capture – value at scale • Internet firms will compete intensely to be the place where consumers live • Many network owners will further retrench to their original roles as connectivity providers • A handful will transform into multi- national “super aggregators” of media and comms services Digital Futures: The World in 202514 AN Other Audience Usage Monetisation © Ovum 2015, Informa Telecoms & Media Ltd
  15. 15. People care more about the ends (content) than the means (platforms) Digital Futures: The World in 202515 25% 40% 35% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Watching short online videos Reading magazines Playing video games Interacting on social networking sites Watching sports Listening to the radio Watching movies Reading books Reading the news Listening to music Watching TV shows Browsing the web How important are these activities to your life? Essential Nice to have UnimportantSource: Ovum N = 16,000 consumers © Ovum 2015, Informa Telecoms & Media Ltd
  16. 16. And no one platform will dominate - consumers will be everywhere Digital Futures: The World in 202516 © Ovum 2015, Informa Telecoms & Media Ltd
  17. 17. Competition will shift from delivery to multi-platform mastery, data and design Digital Futures: The World in 202517 Revenue Investment Data AN Other Audience Usage Monetisation © Ovum 2015, Informa Telecoms & Media Ltd
  18. 18. Disruption will come to “less digital” fields as IoT connects and maps the real world Digital Futures: The World in 202518 The Internet of things As long as services pass the consumer-value test © Ovum 2015, Informa Telecoms & Media Ltd
  19. 19. Tomorrow's key battlegrounds: time and emotions Value Time Money RelationshipsStatus Emotions Digital Futures: The World in 202519 © Ovum 2015, Informa Telecoms & Media Ltd
  20. 20. Key takeaways: The road to 2025 • No one company’s future is assured • Consumers will invest in experiences they value • The value of media and comms will grow and grow • Competition will shift from delivery to design • Time and emotions will become increasingly precious Digital Futures: The World in 202520 © Ovum 2015, Informa Telecoms & Media Ltd
  21. 21. Thank you. Questions? +44 (0) 7876 791 092 | rob.gallagher@ovum.com Ovum.com | @OvumTelecoms | @robdgallagher
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•How consumers will – and won’t – change •What this will mean for the TMT value chain •Which businesses will thrive and why. Rob Gallagher, Director of Research - Media, Entertainment & Consumer, Ovum

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