1. There will be a high-stakes battle over whether consumers buy digital copies or subscribe to services to access limitless content without owning it.
Expect consumers to adopt cloud services from Apple,Amazon, Google , and movie studios (like Warner Brothers, with its 'Flixter' service ) to tap into their content libraries from anywhere. Hollywood will use these so-called 'digital lockers' to push the sale of more high-margin digital downloads, instead of lower-margin rentals. Meanwhile subscription services like Netflix and Amazon Prime will add more content to instant streaming, making buying anything unnecessary. The questions — how will studios restrict content on these services so it doesn't cannibalize digital sales? And which model will win?
The music industry will see a similar split, as streaming services like Rhapsody and Spotify gain momentum, facing off with iTunes, along with its newer rivals,Googleand Amazon. We may even see a subscription music offering from the tech giants now focused on downloads.
2. Television and the Internet content will converge.
Internet-connected TVs will become pervasive. Google will finally nail its GoogleTV software and we may see an entry from Apple. (Steve Jobs' uttered the famous line about TV: "I finally cracked it.") Consumers will finally be able to seamlessly flip between TV channels, video on demand and content made just for the web, like YouTube's 100 new 'channels' in the works. It won't matter what medium video was created for; consumers will watch what they want, anywhere, whether it's a laptop or a giant flat screen, and the distinction between TV and web video will disappear.
3. Social media will grow up.
Facebook will go public. Twitter will launch a sustainable business model, built around the service as a news feed. We'll see an ongoing stream of social media related IPOs, like Zynga . Fortune 50 companies will jump on the bandwagon, investing big in these services to reach consumers.
4. Traditional publishing will rise from the ashes
Book, magazine and newspaper publishers will cash in on the flood of eReaders, tablets, and smart phones. People have been trained to pay for content via apps on these devices — in stark contrast to the Internet, where they were accustomed to free content. Publishers will figure out how to exploit new devices and get consumers to pay.
Grading last year's predictions , I'll take a B+.
1. Cable and satellite giants will resist cord-cutting
They're still fighting to keep consumers paying, but they haven't suffered too badly. The real threat isn't cord-cutting, but college graduates who seemingly never pay a cable bill and "cord-shavers" who cut back.
2. Facebook will get bigger.
Facebook has over 800 million members. My prediction was an understatement.
3. 3-D technology will decline in importance.
Three dimensional TV is absolutely less important. Movies like Walt Disney's"Pirates of the Caribbean: On Stranger Tides" and "Kung Fu Panda 2" (distributed by Viacom'sParamount Pictures) drew less than 50 percent of their opening weekend box office from 3-D screens. And despite more, higher-priced 3-D tickets, the overall box office is down 3.7 percent year-to-date.
4. Console game business will be set for a big battle.
It hasn't been a great year for second-tier video games. Total game sales are expected to be flat or lower, despite the fact that Activision Blizzard's launched the biggest game ever, "Modern Warfare 3." And as I expected, companies are rolling out more subscription services, like Call of Duty Elite.
5. Celebrities will monetize their brands
It's hard to deny that celebrities are monetizing their brands. Check out the ever-expanding Kardashian empire , but I think we're still in early days. This should play out more next year when YouTube launches 100 channels enabling celebs to broadcast directly to consumers.