Social networks are likely to surpass the milestone of one billion unique members in 2011 and may deliver over two trillion advertisements, said a report.

“Despite the growth in numbers, once social networks reach the billion unique user milestone, nearly half of the potential global user base will have been signed up, which could put a ceiling on future growth,” said Saba Sindaha, partner in charge for the technology, media and telecommunications (TMT) practice at Deloitte, a provider of audit, tax, consulting, and financial advisory services, which has published its 2011 predictions for the media sector.

“The pace of global Internet adoption will also decide how much of a challenge it is for social networks to sustain their impressive growth to date," he added.

Additionally, in 2011 the advertising revenues directly attributable to social networks will likely remain modest at roughly $4 per member, totalling less than $5 billion, which is less than one per cent of the worldwide advertising spend total.

Where next for online display CPMs?

The cost per thousand impressions (CPMs) for social network online display is likely to continue to fall in 2011, averaging under $0.40. Despite 50 per cent share of online display and trillions of impressions, social media’s online display revenues will be just $5 billion, said the report.

The ultra-low price of social network online display may have a negative effect on other types of online display advertising. The low CPMs for social network online display will likely create a higher demand for social network advertising, and put downward pressure on CPMs for other online display ads, the report added.

Television’s 'super media' status strengthens

In 2011, television will continue to lead all media in total revenues, which include advertising sales, subscriptions, pay-per-view, and license fees. Television’s share of audience attention will expand with the global television audience likely to increase by 40 million to 3.7 billion viewers.

DVRs will flourish

By the end of 2011, more than 50 per cent of television owners in the US and UK will likely own a digital video recorder (DVR), giving these viewers the technological ability to skip ads. However, the impact of DVR sales on television advertising is expected to be minimal since most DVR owners will likely continue watching the vast majority of their television live.

Even when viewers fast-forward programmes, the ads are not wasted; studies show that ads viewed at 12x speed are still retained by viewers.

Games go online and on sale

In 2011, the global computer and video games industry growth will come from diverse revenue streams, including monthly subscriptions, peripherals, fees for services, as well as in-game purchases and advertising in the free-to-play and “Freemium” markets, according to the report.

By the end of 2012, total revenue from these relatively new sources could be as high as $10 billion, or 16 per cent of total games revenues, it said.

Live music sector will expand

In 2011, the live music sector will expand its role to include nurturing new talent, which was previously the domain of the recorded music industry’s Artist and Repertoire (A&R) divisions.

Over the past decade, the live music industry has prospered while recorded music sales declined, along with its A&R investments. The live sector will pick up some of the slack by identifying and commercializing new acts to maintain its momentum, said the report.

Music retail goes seasonal and temporary

In 2011, revenues for digitally distributed music will exceed physical music sales in at least one major market, most likely the US. This long-anticipated event will probably be driven by a sharp decline in CD sales, rather than a significant increase in digital music subscriptions or downloads.

The decline in the CD market is likely to cause a marked reduction in year-round shelf space dedicated to physical music. Instead, CD retail will shift to becoming a seasonal or event-driven purchase.

By the fourth quarter of 2011, there could be 1,000 temporary “pop-up” music outlets created to meet occasional surges in demand, creating a small, but growing, niche segment, the report said. – TradeArabia News Service