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 !