In the past year, we saw some significant technology groundswells grow into formidable “sea changes”, revealing major shifts in market dynamics and human behavior. Each one has shown an exceptional ability to disrupt large and often-unsuspecting incumbents; each has created or reinforced platforms for further disruption; and all of them are interdependent and combinatorial. 2014 pulled back yet more veils – any rest we thought we were due after weathering the digital disruptions of computing, the Internet, and social networks is, alas, not to be found any time soon. We now face new challenges – and great opportunities – in an undeniably-mobile world with on-demand digital logistics and an irrevocable shift of power to the edges.
Mobile is eating the world
In 2014, the shift to mobile became undeniable and was written in bold print across browser traffic, search queries, and ad impressions. The new story followed our gaze to mobile home-screen applications, app install advertising, OTT messaging services (like WhatsApp, which now claims 30 billion messages sent each day), and heavy-handed attempts to create mobile super-cookies that could find and track now-dark web refugees. In early 2014, mobile access to the Internet surpassed that of desktop PC’s for the first time. Across the globe we saw images of huge crowds, from concerts to revolutions, hands in the air by the thousands with mobiles blinking and flashing and capturing the world, like the eyes of Argus in service of Apple and Google, feeding the maw of social networks and state intelligence agencies.
Benedict Evans, of mega-money VC fund Andreesen Horowitz, spoke of the company’s own mythic motto “Software is eating the world” as evolving towards “Mobile is eating the world,” as if the Ouroboros itself finally unlocked that unlimited data plan. A fast-budding ecosystem of wearables has sprung up to augment our lives further with a personal sense-and-compute mesh anchored to the mobile OS, promising our bodies themselves the omniscient scrutiny of Big Data. Even the enterprise is feeling the heat from employees bringing their own devices heedlessly onto corporate networks, opening firewall pores, capturing data, and generally driving more paranoia into the hearts of IT managers wrestling with an emerging orchestra of mobile device management (MDM) solutions (not to mention the flood of a now-inescapable and near-total surface area of cyber threats).
All of these are merely side effects of the simple, deeply-evolutionary advantage of having compute, communications, mapping, and content all in the palm of our hand, all the time. It’s almost as if the last few thousand years of tool building were leading to this supreme capability, now taken for granted by the humans who called it into being.
The year of Uber (and Airbnb)
With access to digital logistics and a networked supercomputer in every hand, it became possible to crack open two incumbent industries that may not have fully accepted the threat before 2014, both of which are deeply coupled to human life: shelter and transportation. Airbnb and Uber have been in operation for several years now but 2014 was a watershed for each, in two related-but-opposite ways. Airbnb’s home rental platform that disintermediates the increasingly over-priced hospitality sector has worked closely with regulators and municipalities to address liabilities and make sure that city stakeholders get a piece of the pie. Not free from challenges by incumbents and municipalities, 2014 was still arguably the year that Airbnb became an accepted standard among a list of go-to providers.
But the ability of Airbnb to fade into the daily fabric was in part enabled by Uber’s insistence on grabbing the headlines at every turn. 2014 was the year of Uber, for better and worse. It reached an unprecedented stratospheric valuation to become a $40 billion private company. It expanded across the globe into over 50 countries and 200 cities, experimented with the delivery of ice cream and kittens, among other goods, signaling the emerging ability to disrupt the shipping industry if it so chooses. And Uber made clear its strategy to ignore city laws and marshal the support of the masses to wield against regulatory regimes – a strategy that’s been so successful that once-golden taxi medallion prices have declined up to 25 percent in most major markets, although few are even buying at those prices. In 2014, funding pitches across Silicon Valley rang loudly with the echoing strains of “it’s like Uber, but for X.” While scandalous headlines abound, from murderous drivers to megalomaniacal SVP’s, Uber’s growth seems unfettered and inevitable.
Uber is about the on-demand summoning of convenience directly to the user, no matter where they are. It’s the latest pinnacle of personal empowerment and adaptation to an increasingly tech-mediated environment, and it’s not at all incongruous with company CEO Travis Kalanick’s apparent Libertarian disposition.
This same current that’s wresting power away from lumbering incumbents and handing it out to the edges has, in 2014, brought to the stage another champion, an icon of self-empowerment and do-it-yourselfness: the YouTube Star.
YouTube moving to the center
Swedish gamer Felix Arvid Ulf Kjelberg, aka PewDiePie, has 33.4 million YouTube subscribers and 7.3 billion views. That’s “billion” with a “b.” He comments over video games. A Brazilian woman known as DisneyCollectorBR has 3.3 million subscribers and over 4.5 billion views watching her open and play with Disney toys. TheFineBros record people’s reactions to viral videos, then share them with over 11 million subscribers. They’re sponsored by Ford and Comedy Central who want access to their 2.5 billion views. These simple, silly, and refreshingly authentic channels are drawing audiences away from cable TV and film. And they’re each making millions of dollars in ad revenue, fueling aggregation into multi-channel networks (MCN’s), and escalating acquisition of said MCN’s by nervous media incumbents.
Last year, Disney bought Maker Studios for $500 million plus a few hundred more performance-based millions. The Chernin Group and AT&T bought Fullscreen for about $250 million. And EU broadcaster RTL Group acquired a majority stake in Los Angeles fashion MCN StyleHaul. Content views have moved online, and the content has gotten shorter to meet the fleeting attention spans of Millennials and deliver mobile experiences over more crowded and costly pipes. Cisco, never asleep at the switch, estimates that by 2018 video will account for 68 percent of mobile traffic; Ericsson says video will be 50 percent of all network traffic by 2020. Towering at the top of the video pile is YouTube: the world watches an estimated 6 billion hours of YouTube each month. For Big Media wanting to keep up with the shift, they have to follow the eyeballs.
Technology and the redistribution of power
Anyone who has spent years, decades even, dealing with taxis and cable TV would be hard-pressed not to see some of this as a come-uppance of sorts, dealt in large part by the now-ubiquitous super-connected supercomputers in our pockets. Taxis have enjoyed regulatory protection (and endured its blackmail) for decades, allowing them to decline in quality and service without threat of competition. Complaints aside, Uber is simply faster and cleaner than cabs and they make us feel like our needs actually matter. Cable TV and the film industry have commoditized and homogenized content, repeatedly sacrificing authenticity and novelty for the perceived safety of What Already Works. Only the lucky chosen few were allowed the right to greet the eyes of the world, however carefully scripted. YouTube has turned this exclusivity upside down, giving an entire generation access to the most intriguing and authentic celebrities they know: each other.
The rising tide of technology lifts all boats but perhaps none are so empowered now as the masses, formerly beholden to gatekeepers a bit more adept at gaming economic structures than keeping up with the needs of their users. With the power of the stars in our hands, transport and accommodation a swipe away, and the ability to talk to the world from the tiniest niche, the year of 2014 underlined the bold march of technology coupled to and co-evolving with human behavior. It is a march of empowerment, convenience, and efficiency measured by users and markets but, perhaps ultimately, we hope, by the needs of human nature itself.