Michael Wolf (from Activate) presented at The Wall Street Journal’s Digital Live Conference a massive amount of data points on the future of technology and media in 2016. In the same vein as my previous article on Mary Meeker’s annual internet trends report, I will highlight the most interesting stats for Montreal startups. You can see the full deck on SlideShare.
On Time Spent on Tech & Media
When Wolf wrote, “Capturing Attention is not a Zero Sum Game”, this should catch your attention. Many smart people have been arguing both sides of this idea; that user attention is finite and is a zero sum game. In other words, time spent on Twitter is taking away from time spent on Facebook or anything else. Wolf is arguing quite the opposite; that attention is multitasked and split between multiple screens or devices. This implies that there is more than 24 hours of user attention up for grabs.
I am not going to dissect this idea any further as it deserves a separate article and research. That being said, judging from my usage patterns, I am rarely fully engaged in a single thing and always have at least two screens around (typically, my laptop and phone).
According to Wolf, the average American is spending over 31 hours a day. Video accounts for an enormous portion of that although I’d be curious to see how the pie chart on Slide 7 splits across age groups. You can expect massive competition for user attention in the coming years as the time spent on tech and media per day increases.
Although the total user time spent is significant, it is spent in a small number of apps, websites, and channels. The portal-ization (not a real word) of the Internet is increasing. You can see this more clearly outside of North America within messaging apps like WeChat and others. Why would you leave WeChat when you can do even your banking within it?
Another interesting stat is that you can build a billion-dollar business by capturing less than 1 minute of daily attention. For startups looking to be in the entertainment business, seems like you can build an entire company around capturing 15 seconds or so if a user’s time. Vine makes a lot more sense now.
Messaging is growing at what I can only describe as an insane rate. Mary Meeker also touched on this in her Internet Trends 2015 report. Not much new information here when it comes to messaging besides some new numbers like: “1.1 billion new users will be added by 2018”. Different messaging apps dominate different markets which is also not a surprise. WhatsApp and Facebook Messenger are the big whales globally with collectively over 1.5 billion users. Asia-Pacific is an entirely different world for messaging apps (also not a surprise).
One thing that is fascinating is that the Middle East & Africa have the largest untapped messaging market: 579 million potential users. If you are a startup in Montreal in the social and messaging space, look to MEA.
Building platforms on top of messaging is the name of the game, and Asia-Pacific is way ahead.
On Streaming Audio
Four hours a day of audio listening time and growing. Lots of potential for growth from existing tech players. Obviously, the millennial and younger generation is all about streaming vs. radio.
Another interesting thing I found, “Spotify and Pandora are catering to two different audiences.” Perhaps, we should stop considering them to be competitors but complements instead.
I loved this because I am an example of someone who went from 1 podcast to 15 different ones: “Podcast consumption has exploded in recent years and will keep growing steadily. Podcast listeners are the elite of audio: they listen to more non-podcast audio than average, and are an attractive demographic.” Attractive: more likely than the average to have incomes above $50k and a bachelor’s degree.
On Cable Killers
Lots of interesting stuff in this section of Wolf’s slides. I will recommend you take a look at some of the slides for this section.
Traditional TV is still a big chunk of video time, but online media companies are coming up fast. According to Wolf, the future of TV is apps and we have hit “peak cable”. TV cord cutting will not look like typical tech transitions; I highly recommend taking a look at Slide 67.
Slide 73 is also absorbing in how you can describe consumer behavior when it comes to video watching. As much as on-demand video consumption is growing, live sports will probably never go on-demand. Think about it: why would you want to look at the game after you know who won/lost, unless you are a real fan. Ben Thompson has a fantastic article detailing why Disney and ESPN will be okay.
“Web Video is driven by native [indie] creators producing short content that reaches a massive audience and grows overall video consumption.” Wolf.
Consumer spending on video is outpacing salaries. Traditional Pay TV is in trouble.
The “Cable Killer” won’t be competing on price but user experience.
No surprises here: the video gaming industry is HUGE, 2 billion users. Global spend on gaming will keep growing. Surprisingly, the PC/Web have the highest revenues as a platform (Slide 97); PC Gaming is not dead after all.
There’s now a huge spectator audience for gaming in Twitch and YouTube.
Organized eSports is now big billion-dollar businesses, following the South Korean model.
Wagering will be a real thing (for a definition go to Slide 107), and Millennials are the largest adopters.
On the App Store
“The dream of the independent developer building a business in the app store is over.” That is right. Move on now.
On Money in Consumer Tech & Media
By Annual ARPU (Average Revenue Per User), Apple, Amazon, World of Warcraft, EBay (?really?) have the highest ARPU globally but their growth is negative. Twitter, Facebook, Tencent and LinkedIn are growing the fastest.
One What to Do Next
Fill the gaps as M&A activity will be tremendous, there will be lots of acquisitions. You can do it Montreal!