As the pace of technological innovation accelerates and economic pressures reshape global industries, the Technology, Media, and Telecommunications (TMT) sector is at a pivotal moment. Emerging trends are reshaping consumer behavior, redefining market strategies, and challenging businesses to adapt with agility and creativity. In 2025, staying ahead will require more than just keeping up with trends—it will demand a deeper understanding of regional dynamics, technological advancements, and the evolving expectations of a discerning customer base.
In this article, we explore the critical trends that will shape the TMT landscape in the year ahead. We examine local developments, the opportunities and risks associated with generative AI, the shift towards sustainable growth, and the strategies businesses must adopt to thrive in this complex environment.
GenAI: The double-edged sword
The generative AI boom remains a focal point across TMT sectors, driving innovations and sparking debates about its long-term viability. While 2023 saw significant launches of Gen AI features in software, media, and telecom, 2025 will test their monetization potential. Companies must answer critical questions: What unique value does Gen AI offer? Are customers willing to pay for it?
High interest rates and tight budgets pose challenges for scaling Gen AI initiatives. Gartner predicts that up to 30% of Gen AI projects may be abandoned by 2025, citing unclear business cases, high costs, and unanticipated risks.
Read our articles:
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Sustainable growth: A paradigm shift
Economic pressures have shifted the TMT industry’s focus from unbridled expansion to sustainable growth. High interest rates and a tech sector cooldown have redefined success metrics, putting the focus on retaining and monetizing existing customers. With increasing consumer fatigue and limited budgets, companies are turning to advanced AI tools to maintain their subscriber base and maximize lifetime value. These technologies analyze vast amounts of user data to identify patterns of behavior that signal at-risk subscribers who may be considering canceling their subscriptions.
Through predictive analytics, businesses can proactively engage these users with personalized retention strategies, such as targeted discounts or content recommendations. AI-driven insights also help platforms identify upsell opportunities by pinpointing customers who might be interested in premium tiers or additional services. This strategic application of AI not only reduces churn but also enhances customer satisfaction and loyalty by tailoring offerings to individual needs and preferences.
Deep dive on one media trend: Streaming services
The rise of platforms over the past decade has completely transformed how we access information and entertainment. Just think of how streaming has become second nature for so many of us, replacing older ways of consuming media like flipping through newspapers or tuning into linear TV. But with more players entering the market and budgets tightening for both consumers and businesses, the TMT landscape is increasingly complex.
Our latest research explores how consumers are choosing between an increasing number of streaming services while grappling with subscription fatigue and rising costs. It’s a perfect lens through which to understand the broader shifts in the TMT sectors - and what businesses need to do to stay ahead in 2025.
Once defined by explosive growth and novelty, the streaming industry now operates in a more saturated and competitive environment, where consumers frequently juggle multiple subscriptions to access desired content. This shift has led to significant challenges for providers, as they face increasing pressure to differentiate their offerings, retain users, and balance rising costs with household budgets. The dynamics of streaming have become a complex interplay of consumer preferences, pricing strategies, and market innovation.
In mature markets like Germany, the average consumer holds approximately 2.6 streaming subscriptions. While willingness to pay for individual services has risen, partly due to price hikes, overall consumer budgets remain static. This creates a zero-sum game where new subscriptions often replace old ones.
Many platforms, including Netflix and Disney+, have introduced ad-supported tiers to attract price-sensitive users. These models serve dual purposes: retaining existing users at lower price points while drawing new subscribers, especially in competitive markets. And as the market fragments, clear positioning is essential. For example, Disney’s family-friendly content and Netflix’s broad programming appeal help sustain their dominance. Smaller players must carve out niche identities to stay relevant.
Looking ahead: TMT in 2025
Agility, innovation, and a laser focus on customer value will determine the winners of 2025. This includes:
- Maximizing Gen AI potential: Organizations need robust frameworks to evaluate the financial and strategic value of AI initiatives.
- Balancing growth and resilience: Sustainable growth requires a balance of acquisition and retention, underpinned by deep consumer insights.
With decades of experience and a global team of experts, we at Simon-Kucher specialize in helping TMT companies navigate complexity, drive sustainable growth, and unlock the full potential of their business models. Whether you’re looking to adapt to shifting consumer behaviors, stand out in a competitive market, or capitalize on the latest technological advancements, Simon-Kucher is your trusted partner for success in 2025 and beyond. Let’s shape the future of TMT together. Contact us.
