The 3 most influential TMT ideas in 2016

As 2016 comes to a close, it is a good time to reflect on what has been another interesting year in the Telecommunications, Media and Technology (TMT) industries. Last year I covered the ‘Top 5 stories’ in 2015 which included the launch of Apple Watch, Ad-Blocking, the re-birth of Google as Alphabet and the imminent demise of Yahoo. These stories have all continued into 2016 – Yahoo sold to Verizon for US$5Bn, Google (Alphabet) has faced criticism for its ‘moonshot’ approach and Apple is looking for new revenue streams outside of consumer products including moving into AI.

This year, this post is slightly different in that it covers the big ideas not just the stories. As far as world events go, 2016 will be remembered for the edgy political backdrop brought about by Brexit and a hard-fought (particularly on social media) US presidential election. The changes that will eventuate from enacting Brexit and a change of presidency in the US will have enduring effects on the global economy and TMT into 2017 and beyond. For the TMT industry specifically, this post explores the ideas that have been most influential – the ones that will continue to shape the media, telecommunications and tech industries in 2017 and beyond. Some of these ideas were born from the global political backdrop and others are the result of advances in technology and implementation of new use cases.

So…what were the most influential ideas in TMT in 2016 and why will they continue to shape the industry in 2017 and beyond?

1. Fake News

In the news media, the boundaries between satire, propaganda, reality based on facts and news that has been indisputably made-up have been blurred for years. In 2016 however, the growth and maturity of social media as a news source, a US presidential election fought on dubious claims/facts and the ubiquity of user-generated content formed the perfect storm for the creation, proliferation and exploitation of news stories that were fake. One analysis performed by Buzzfeed highlighted that Fake News stories like Pope Francis endorsing Donald Trump for president (he didn’t) and Hillary selling weapons to ISIS (she didn’t) actually performed better than real news on the 2016 presidential election toward the end of the campaign. Fake news articles also performed well outside of politics with stories about numerous dead celebrities (who are alive and well), match-fixing Superbowl 50 and a Nazi submarine being found in Lake Ontario all receiving readership and significant attention.

Why is this an influential idea?

There are 3 major reasons why ‘fake news’ as a concept will continue to be influential in 2017 and beyond:

  1. Society acting on fake news has serious consequences: There is the very real issue that parts of society are being influenced by and acting upon fake news reports. In 2016, fake news is thought to have had a large influence on how people decided to vote in the presidential election but it has also led to other activities such as a shooting in a pizza restaurant in Washington D.C. People acting on false news has and will continue to have very serious consequences for society.
  2. Filtering of social media feeds: Secondly, and more specific to TMT is the role Facebook and other social media sites play as the distributors of fake news stories and how they will act to maintain credibility (seen to be important for its users and business model). By 2016, Facebook has evolved from being a digital property where ‘offline networks’ of friends congregate to being a news source (62% of US adults get their news from social). This has come through the growth of services like Instant Articles and Facebook Live. Media and social are now more intertwined than ever with a majority of Facebook users prioritising time spent reading their Facebook feed over reading a newspaper. The social business model (based on advertising spend) rewards engagement with stories/articles/baby pictures – anything to keep you on the feed longer. The scrutiny waged against social sites like Facebook is related to the algorithm that is used to serve up content to users that will ensure engagement, time in feed and clicks on advertisements are maximised – even if the content happens to be fake. Facebook CEO Mark Zuckerberg has denounced the link between their algorithm and fake news claiming ‘99% of what people see is authentic’. However, there is increasing pressure on social sites to intervene where news they are distributing is fake. On first appearance, this sounds like a positive thing in the fight against fake news. With greater consideration, increased filtering of social media feeds (even for fake news) is a very slippery slope toward the owners of these sites censoring and controlling everything you see (beyond driving engagement for advertisements).
  3. Growth in fact-checking and a return to traditional news sources: Fake news has been somewhat of a boon to fact-checking sites and traditional media. Fact checking sites like Snopes, Factcheck.org and Poynter have received attention this year as sites performing the function of reviewing the facts supporting news stories or claims by politicians. Part of Facebook’s response to the fake news claims has been to propose the use of these sites to check the facts of stories in their news feeds. What is interesting for media organisations will be the growth in these organisations as the arbiters of ‘truth’ in news stories (a potentially valuable role). As credibility of news displayed on sites like Facebook is called into question, traditional media sites have an opportunity to entice readers back to their properties for fact-filled and expert opinion.

Fake news will be influential to news media and social media in the coming years both in terms of the content developed and distributed but also the business models these organisations are defending and evolving.

2. Everything as a service

In this post ‘The Best is Last’ from April 2016, Benedict Evans points out:

A technology often produces its best results just when it’s ready to be replaced — it’s the best it’s ever been, but it’s also the best it could ever be. There’s no room for more optimisation — the technology has run its course and it’s time for something new, and any further attempts at optimisation produce something that doesn’t make much sense…

At the Mobile World Congress in Barcelona this year it was apparent that smartphone innovation has hit a peak and we are starting to see a 2 tier market – incremental innovations (better camera, screen, battery) from the premium hardware manufacturers and commoditisation of these features by fast following low-cost players. In 2016, we have reached peak smartphone innovation. This has been corroborated by slower replacement rates of smartphones globally in 2016 and a halving of smartphone sales from 14.4% growth YoY in 2015 to only 7% YoY on 2016. If this technology has “run its course” what is the something new that will replace it?

In 2016, there has been a lot of discussion about what comes next after the smartphone. From observations of the last few years it’s not tablets, nor is it watches; it could be voice assistants and possibly headsets. Regardless of the technology and the form factor, the business model of product manufacturing (particularly in the fast paced world of Tech) is not scalable nor is it particularly responsive to major advances in technology. This year, product companies like Apple, Siemens, GE, Phillips etc. have started to become public about their transformations from products to services. They are taking a lead from other internet businesses (Uber, Airbnb, Amazon etc.) that ‘everything as a service’ is a highly scalable, profitable and ultimately richer (in terms of data, user feedback, product development) model by which to conduct business. Take Amazon Web Services as an example – it offers computing power as a service (instead of buying servers) to companies all around the world. In doing so it has greatly reduced the barriers to entry for start ups, growing with the businesses it supports and is now making a healthy profit.

There will always be a need for product businesses in technology – in fact Google made a move into products this year with the Pixel phone. However, it is the services (everything as a service) that accompany, support or are developed as part of the product ecosystem that are likely to be the most profitable and scalable.

Why is this an influential idea?

‘Everything as a service’ will be an influential idea for two major reasons:

  1. It will underpin the development of new products: The development of new tech products (possibly any product) in the future will look to consider the service elements that could support it. This could include AI (computer intelligence as a service), insurance, analytics, data storage, security and privacy. The internet is very effective at distributing services and product developers will increasingly be effective at designing product-service combinations.
  2. It is at the core of business transformation in the digital age: I’ve written about Google and Apple’s transformation efforts which are underpinned by ‘everything as a service models’. Other companies such as Siemens and GE, which are eyeing off the consumer and industrial markets for the ‘internet of things’, are also undergoing transformations of their own. They are looking to incorporate ‘everything as a service’ type models into their businesses to not only be makers of machines but fully integrated digital businesses. These transformations will take time and will continue to evolve for years to come.

3. Blockchain can ‘fix the internet’

One of my favourite articles of the year was from Walter Isaacson of the Aspen Institute – “The internet is broken. Starting from scratch, here’s how I would fix it.” In the article, he outlines a number of changes that would make the internet more secure, more private and less prone to monopolisation by aggregators. In 2016 we know more about blockchain than ever and its use cases in TMT and other industry sectors. Its key characteristics include a digitally distributed ledger which is updated in real-time, cryptographically secure, irreversible and auditable, making it a prime candidate for supporting new technologies as they emerge and for fixing issues in the internet’s design.

In supporting new technologies, Telecommunications provide some interesting examples. 5G technology will start its implementation possibly as early as 2017 in some countries. Blockchain could be used to streamline the processes of implementing 5G connectivity. To realise 5G potential of ubiquitous access across various networks, network providers will need to handle heterogeneous access nodes and diverse access mechanisms. Selecting the fastest access node for every user or machine will be a central challenge which blockchain can enable. This will create a new generation of access technology selection mechanisms to build sustainable solutions. Another example technology is the ‘Internet of Things’ for which blockchain can enable secure and error free peer-to-peer connectivity for thousands of IoT devices with cost-efficient self-managed networks.

Walter Isaacson highlights 5 ways to fix the internet of which 4 have potential blockchain solutions:

  1. Create a system that enables content producers to negotiate with aggregators and search engines to get a royalty whenever their content is used: A difficult issue to solve in the internet particularly the negotiation part. Companies like Mediachain are looking to connect content producers with aggregators to register, track and identify creative works online (even if it is sampled, remixed or copied) using blockchain protocol.
  2. Embed a simple digital wallet and currency for quick and easy small payments for songs, blogs, articles, and whatever other digital content is for sale: This is bitcoin.
  3. Encode emails with an authenticated return or originating address:Blockchain based identity and authentication is becoming more popular through organisations like Blockstack or Blockverify which build server-less applications that allow users to be in control of their data. This could be used for messaging in the future where advances in email authentication through DKIM and STF are not satisfactory.
  4. Enforce critical properties and security at the lowest levels of the system possible, such as in the hardware or in the programming language, instead of leaving it to programmers to incorporate security into every line of code they write: Blockchain uses cryptography in its protocol to secure information. Thus, blockchain based applications use this underlying security to achieve higher levels of security at the application level.

Why is this an influential idea?

The internet is a forty year old concept. Isaacson points out in his article:

“It is still a marvelous and miraculous invention, but now there are bugs in the foundation, bats in the belfry, and trolls in the basement.”

The technology to help update the internet for many of its flaws and to support the introduction of new technologies and business models is blockchain. In 2016, the TMT industry moved beyond defining what blockchain is to identifying and implementing applications of blockchain to solve for issues of security, fraud, privacy and distribution. We have finally reached a point of understanding that blockchain is an ‘enabler of things’ much like the internet was 40 years ago and is at a grand scale today. While blockchain may not ever reach the scale of the internet, the next 40 years will see its growth and use in new technologies especially where the internet is failing the most.

2016 has been an interesting year for TMT advancements. Other ideas that narrowly missed out on a top 3 spot were ‘Transportation as a service’, ‘Consumerisation of IT’ and ‘Reverting back: Books, Vinyl and TV Advertising’. I look forward to writing about these and other advancements on strategy4telcomediatech in 2017.

Thank you for reading in 2016 and happy new year!

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s