As a new year is upon us, this is a good time to start thinking about context and read through the tea leaves of what’s next. I did miss out on predictions last year but I’m resuming past that hiatus. So here are some predictions about 2019
The easy one: Instability
We’ve had a preview of what 2019 in the last month of December: the stock market has been going on wild gyrations as investors are getting increasingly worried about the dangerous mix of increased interest rates, trade wars, and a general sense that this long boom is coming to a close. I expect this to translate into more stock market instability in the short to mid term, with a potential decline in the second half of this year as consumer and business confidence starts to wane.
In governments, we will see even further instability in the US, as the Mueller report comes out, leading to articles of impeachments being drawn out and questions as to whether the Republicans are willing to support Trump through impeachment proceedings in 2019 and guarantee a Democratic white house win in 2020 or oppose him and drive a rift between senators and their constituents.
Outside of the US, I see Europe continuing to grapple with the impact of a no-deal Brexit at the end of March, with potential medicine and food shortages in the UK and concerns across the rest of Europe, leading to more authoritarian candidates succeeding.
In Asia, the great Chinese experiment of trying to keep tight control of government while running a hyperactive capitalist economy could suffer as a result of trade wars, cheap access to capital (due to market uncertainties) and the looming threats of global warming (China is still highly dependent on coal).
The other easy one: Concerns about privacy
If 2018 was the year people started understanding digital advertising, 2019 will be the year they start understanding data trades. There is an old industry axiom that “if you’re not paying for the product, you are the product.” While one part of this equation has been advertising, the other part of it has been data. With the increased penetration of smart devices into homes and retail (Amazon Echo and Google Home as well as the ever-pervasive presence of smarter cameras), we will start hearing people asking questions about what happens to all that data.
This will lead to embarrassing revelations about improperly secured data from some of the biggest names in tech (Google, Amazon, Apple, and Facebook, of course), leading to more tech leaders being asked to talk to Congress about what they do and failed attempt at any kind of meaningful legislation on data.
The emerging one: It’s all about chatting
Messaging apps have become the new center for a lot of user digital behavior including gaming, payment, video, and commerce. At the same time, messaging features are increasingly stepping out of messaging apps by being embedded in other context like gaming (eg. Fortnite as a messaging app disguised as a game) and hardware (eg. Amazon Echo and Google Home as the new landline phone with drop-in and call features).
Just as customer service embraced social media many moons ago, chatbot are becoming the new customer agents on a variety of platforms, with business ranging from J-crew to Home Depot using them to handle customer service queries and automated purchasing. While many of today’s bots are following simple decision trees, the rise of AI-assisted bots (eg. Siri, Alexa, and Cortana) will drive to smarter interaction across a wide range of distribution platforms.
In this consumer market, expect Facebook to be the big winner (since it already owns a substantial part of the space thanks to its ownership of Instagram, Whatsapp, and Facebook Messenger) in the western world. However, it will be faced with challenges in Asia, where WeChat and Line are already dominant, limiting its access to a large portion of the market. Meanwhile, iMessage will continue to remain a closed Apple ecosystem while Google continues to try to figure out its position in the space (with apps ranging from the recently closed out Allo and Google Hangout to Google Messages and many others, it is hard to figure where big G is putting its priority).
In the corporate world, messaging has become the new tool for collaboration, with Microsoft Team and Slack merging bot functionality and document management into the new center of digital business processes. If Google wants to get serious about the enterprise market, it will try to acquire Slack.
The wildcard: Next new social – Fortnite
If you have a teenager in your house, you’re probably already tired of hearing about Fortnite. The game (which incidentally racked up $3B in annual revenue for a free game), will step from being seen as just a game to being seen as the next social network.
Over a decade ago, a social environment called SecondLife laid out some of the foundations for what a graphically rich environment where people can hang out could do. This eventually led to the creation of Minecraft (which, after getting tens of millions of kids addicted, was acquired for $2.5 billion by Microsoft) and now to Fortnite.
While Fortnite has spent much of 2018 as a game, creating “seasons” programming (a new concept pulled from television), the most interesting announcements its creators made were in December, when the company opened up the concept of “islands” where creators could build their own things and share creations with friends and others. This is taking away from the “shoot other people” model that popularized them and greatly expands the audience into a world builder type of environments that is essentially a less toxic social network (With over 200 million users, Fortnite is getting close to being as large as Twitter, with the bots and politically charged discourse).
Epic Games (makers of Fortnite) has also announced that it will offer the tools it uses to developers so they can create multi-platform immersive environments, essentially setting itself up to be the platform for the next generation of social interactions.
As a result, I predict that some brand will make the jump and create a Fortnite outpost in 2019, with more following based on its success.
The crazy set: Media acquisition game
By now, it’s a given that streaming has won. So we can put a nail in TV’s coffin, except for the fact that more TV is being consumed today than at any other times. Except it’s now called streaming and the leading streaming services, along with the legacy players, are all having one massive problem: they are running out of content to produce.
So while Netflix is looking to replace all of TV (not just HBO. If you look at their current collection, Netflix is already one of the largest TV channel for kids, one of the largest comedy channels, one of the largest documentary channel, etc…) and Amazon and Hulu are looking to grow their presence, the traditional players are about to launch their own offerings. This is leading to massive new content investments (yeah, “content is king” doesn’t sound quite as stupid anymore) and a search for more source.
So we will see podcasting as the next new mine for producing content. Just as TV shows in their early days mined radio serials, we are about to see an explosion of new video series based on podcasting serials.
All this will continue ensuring that you never have enough time to keep up with all the content sent your way, thanks to your monthly subscription (Netflix is not threatening HBO, it’s threatening cable TV packages and advertising).
This will also have a knock-on effect on TV advertising as its audiences continue to shrink (except for live events like sports and maybe news) and age (ask today’s youth about a big non-streaming TV show and they may look at you blankly; ask them about a streamer on YouTube or Twitch and they will come up with multiple names).
All this will lead to Disney acquiring the 40% of Hulu it doesn’t already own and Comcast or AT&T attempting to acquire Netflix (Apple might have considered it but will not go through as it focuses its energy on acquiring Spotify)
So… as always, feel free to ping me (let’s try Twitter, where you can find me at @TNLNYC) if you have any thoughts about these and, as always, I will revisit those predictions at the end of the year.
Have an amazing 2019!