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Can Social Media Survive ?

Well that's the question many have asked already. The problem is not in social media's utility, its in the revenue model. Which again many have alluded to, particularly in reference to the $50 billion valuation figure placed on Facebook.  I was part of an interesting discussion last week in New Delhi where consulting firm Deloitte presented its Technology, Media & Telecommunications (TMT) predictions for 2011.

Usually, I find such predictions lacking in the kind of leap of faith which make them predictions to start with. I found this set a health departure. For two reasons. First, Deloitte says (among other things) firmly that social media is yet to become a real force, in revenue terms. For one,  advertising spend on social media  is still 1% of total advertising spend. Total advertising revenues for 2011 are  predicted at $4 bn for social media, a small amount compared to the investments perhaps going in. And surely the euphoria.

Second, television continues to grow furiously. Deloitte points out that television ad revenues have gone up from $174 billion globally to an estimated $191 billion in 2011. At a 6% growth, this figure could cross $200 billion in 2012. In contrast, newspaper industry revenues have gone from $126 billion to an estimated  $93 billion in 2011. Indian television revenue is expected to grow 14% in 2011. China on the other hand is expected to grow 16%.  Indian newspapers of course continue to grow.

Why The Telly Could Dominate

How much time will we spend in front of the telly ? Well, Deloitte says 3 hours and 12 minutes in 2011. Compare that to 15 minutes for social media on an average and 33 minutes for the internet, in America. And there are powerful global franchies like Strictly Come Dancing which now attract 250 million viewers in 38 countries. We have our own variations and adaptations of many global franchises in India. And this will grow as there is another 3 billion potential new viewers to target !

I also understand increasingly the role of television and entertainment in the heirarchy of needs, particularly in countries like India. A television will typically come ahead of most gadgets and just after maybe shelter, food, clothing and a now, mobile phone. And not surprising that color televisions are given away free in states like Tamil Nadu. Its the entertainment opportunity, not really news and current affairs. Which can actually make life more content, for most.

What do you think  ? Do you think social media will get the support of commerce. And to what extent ? Do leave  your thoughts !

Comments

karanbhujbal said…
I agree social media's yet to get big in revenue terms, but then i also know the seeds for change have been sown. The tech sector - big and small companies, have begun to understand the use case and some biggies like Dell have begun to embrace it but its the remaining b2c sectors like FMCG who will take a lot of time to understand and adapt to it and unless that happens, the revenue shares will increase only at an incremental rate.
Thanks Karan, I see your point and perhaps the application, investments and gains are high on the B2B side..whats your sense on the consumer side..

Best, Govindraj
bijugayu said…
I disagree with your argument......
-look at the pace of user penetration of of social media with those of telly....social media grows at a speed greater than those of telly..
-look at the sociology of television ,both social media and television have different levels of users,definitely those behind the social media are powerfull and wealthy middle class which modern commerce needs to thrive in future...
-the growing generation are inclined towards infotainment which i think social media can do more along with television...
-there are more beyond the comprehension human material consideration which social media can provide in enomous platforms...-does it not makes sense while seeing that most of conventional media,print,tele and other have their own version of social media presence...why it is....it means conventional media platforms have coi-opted social media in varying forms which i think is the predator...
so i think social media will be the one and only media platform...
Anonymous said…
Hi Biju

The question is not about size or growth of social media, which is undoubtedly large and growing furiously..rather on whether revenue will keep pace and how/when. As of now its lagging in proportion to the reach, particularly when compared to television. WHich is not to say it will not overtake..

GE
karanbhujbal said…
HI Govindraj. I couldn't help commenting on this blog post again when i saw this news today. This is in reference to the point you make about social media spends and revenue still very small... in todays news, Maruti has increased their digital spend by 100 per cent! http://www.mydigitalfc.com/news/digital-media-future-advertising-054

Investments are being made in social media for sure and the returns will also trickle in [even in revenue terms] in a couple years atleast. This is my intuition.

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