I think we’re all happy to see 2009 come to an end, while we prepare our businesses for the growth we hope to see regenerated in twenty ten. And with that eternal hope comes that other classic year-end exercise: predictions.
So, here are my predictions for digital media and technology in 2010:
- Apple (NASD: AAPL) will break its exclusivity with AT&T (NYSE: T), making the iPhone available on other networks (T-Mobile and Verizon). AT&T will get to test the loyalty of its new subscribers (and find many of them leaving their dropped calls for Verizon).
- Android (NASD: GOOG) shows itself to be a serious player in smartphones. This one will take some time, but I think that going into the 4th quarter of 2010, the Android platform will have established itself as a legitimate competitor to the iPhone. Android will also make a run at the enterprise market, providing a viable alternative to the Blackberry.
- Spotify will line up its partners and launch by mid-year and will mount a realistic challenge to the iTunes model of buying music. Apple will respond with a service-based offering, based on the LaLa platform it acquired.
- Online advertising spend will exceed analyst forecasts. As the market begins to recover, advertisers will first expand their budgets online where they can measure results. Pepsi’s decision to skip the Super Bowl and focus online could be the tipping point and we’ll see lots more growth to come.
- The real-time web will continue to grow in importance, and will be more fully integrated with the existing web (especially on mobile devices). Hence...
- Real-time search results presentation will be overhauled. Google and Microsoft Bing (NASD: MSFT) rushed solutions out the door after inking deals with Twitter, but the results are mediocre, with a “last-in, first displayed” approach like web results circa 1998. Given time to do it right, I expect that Google will display results using measures of influence (based upon a mix of followers and engagement) to rank results, similar to their core page rank system.
- Consumers embrace web video as an alternative to cable: Roku’s partnerships with Netflix (NASD: NFLX) and Amazon (NASD: AMZN); and various devices launched on the Boxee platform will begin to drive mainstream acceptance of video downloading. This integration of television and the Internet will lead to new and innovative offerings. Meanwhile, Blockbuster (NYSE:BBI) finally declares bankruptcy, shuttering most of its stores.
- Apple will release its long-rumored Tablet. While it will not instantly cure cancer or bring world peace, it will provide functionality that the naysayers had not considered, much in the way that the iPhone was more than simply an iPod with a phone built-in. The Tablet will not be the savior for the print industry, but will accelerate consumption of television content and may also provide a boost to glossy magazines and other visual content.
- Mobile gaming will continue to explode; the iPhone and Android will be considered viable alternatives to Nintendo DS and Sony PSP as handheld gaming devices.
- Internet Explorer market share drops below 50%. While Apple and Google fight over control of the rapidly growing mobile screen, Microsoft’s long domination of the desktop will be diminished as Firefox, Chrome and Safari eat into Internet Explorer’s share.
- The M&A market will be strong in 2010 as entrenched companies pick off weaker competitors at what they perceive to be bargain prices. Here are a few deals that I think we could see:
- MSFT should buy RIM and give up on Windows Mobile; otherwise, they will cede the mobile space to Apple and Google. Can Steve Ballmer make a large deal happen without his ego screwing it up?
- LiveNation should merge with MySpace. The recording industry is dead; live performances are the way that the big acts make their money. Meanwhile, MySpace is a great platform for awareness, but doesn’t fit with News Corp’s long-term strategy and is dying as a social media platform. News Corp should spin out MySpace and merge it with LiveNation as the dominant music platform.
- Twitter will not be acquired; instead it will have an IPO. Ditto for Facebook.
- Numerous content company CEOs will overpay for underperforming old media assets, convinced they can turn around these “gems”. They will fail.
Will these predictions come true? Who knows. But, it’s pretty clear that mobile, the real-time web, gaming and video are where huge opportunities will come in the next 12-24 months.
