The media and technology landscape is changing faster and faster. Companies try to create structures, that can deal with this increasing pace. But to be able to really to also adapt to changes in the future, companies have to not just look at the current landscape but also at the things that will be next.
At this year’s Wall Street Journal Digital Conference, Michael Wolf, CEO of the management consultancy firm Activate, took a very interesting look at what will be the next changes in the landscape for 2017. Although his findings are mainly based on the American market, they apply to all markets up to a certain degree.
The Wall Street Journal describes it as: „These are two of the main trends highlighted in a detailed review of the tech-and-media landscape by technology strategist Michael Wolf on Tuesday for WSJDLive, The Wall Street Journal’s global tech conference. Mr Wolf, a onetime Yahoo Inc. board member and president of MTV Networks, now runs New York-based consulting firm Activate Inc. His 177-slide presentation describes a fast-changing landscape that will get harder for advertising-supported content companies while enriching digital gatekeepers such as Alphabet Inc.’s Google, Facebook Inc., Apple Inc., Amazon.com Inc., and Microsoft Corp.“
Here are some key points of his presentation:
For him the 9 most important insights for tech and media in 2017 are:
* Super-serve the Super-users and Chase the Attention Unicorns
* Subscriptions will Feed the World (or at least Internet and Media Businesses)
* Learn to Live with the Discovery Oligopoly
* The Bot Battles are about Winning the Great Messaging War
* eSports is the Next Tech Phenomenon
* You Already know the New Winners in Pay TV
* Video Streaming: The Bundle is the Future
* Audio: Smart Speakers, Gray Music
* Post-Household America: A New Era of Users
Digital Attention Unicorns capture 1 billion or more minutes of digital attention per week.
In total, US people spent 55 billion minutes on Google (including YouTube). Directly followed by Facebook (including Instagram and WhatsApp) where US people spent 51 billion minutes per week. Minutes spent on Netflix sum up to 8 billion minutes a week and minutes spent on Snapchat to 4 billion.
Monetization is not only a function of consumer attention but also a function of the business model. Another interesting insight gives the comparison of the weekly total attention and the annual revenues of the digital platforms. Whereas Pinterest, Twitter and Snapchat are very low in both metrics, Amazon and Microsoft manage to create a very high revenue with little minutes of attention per week. Facebook and Google manage to create a medium revenue with a very high sum of total minutes.
Consumer pay models outside of subscription and freemium are essentially disappearing. In 2011, the revenue model of 54% of the top 100 media and entertainment apps was „Pay to Download“. In 2016, this shrank to just 3% and „Freemium“ and „Subscription“ grew to 26% and 71%.
Messaging wars are being fought to control the consumer relationship and interaction path to functionality and content. Wolf categorises the providers in some kind of feudal system. In it, the kings (Microsoft, Facebook Google and Apple) have the loyalty of users as platform owners.
The nobles (like Facebook, Windows or Android) are followed by the knights (e.g. Safari, Chrome, Skype, Hangout, Facebook Messenger, WhatsApp). The knights are platform controlled apps that attempt to defend revenue by controlling bot discovery and integrations.
And this is just the beginning of the presentation. The following slides dive even deeper in the TV, video and audio markets. You can find the full presentation here: