Thought Starters: look at AMP, Amazon’s dominance, corporate profits & music industry

Thought Starters provides me with a chance to review the research and opinions that I’ve read over the last week or so. This edition looks at the launch of Accelerated Mobile Pages, Amazon’s growing dominance in the digital world, rising corporate profits, the declining fortunes of the music industry and terrorism among other things.

Google’s Accelerated Mobile Pages is now out in the open. Alex Bauer profiles what it offers mobile internet users and also what is going on behind the scenes:

AMP isn’t actually new technology. In fact, AMP is what the web could have been all along, if it had been originally designed with nothing but mobile device performance in mind. This “mobile-only” approach is important because one of the ways AMP achieves its blazing-fast performance is by completely ignoring any device that is not small enough to fit in your pocket. AMP is emphatically not about making desktop websites look good on phone screens, but rather a totally separate, alternative presentation of the same content. It’s the web we already know, except stripped back to the bare essentials and then subjected to aggressive validation and rendering controls.

Alex Muir points to Facebook’s Hydra like offering as something any entrepreneur should consider as a competitor before launching a business into the B2C space:

Today, **if you’re building a service for communities or individuals then Facebook is almost certainly your biggest competitor. ** B2B: Excel, B2C: Facebook.

Ben Thompson recently profiled how Amazon is leveraging its scale in ecommerce and cloud computing to gain a near insurmountable competitive advantage. Eugene Kim’s collection of charts profiling Amazon provides a valuable complement to Thompson’s words illustrating what a behemoth the organisation present (at least in the US):

Amazon's long term growth

Bastion of free market economics, The Economist has made a convincing argument that the US economy needs more competition (and regulation) pointing to growing concentration and rising profits among the country’s leading firms:

Even better at making money

Scott Santens joins the chorus of voices raising concerns about the threat automation poses to employment with Google DeepMind’s AlphaGo illustrating the major advances in artificial intelligence capabilities which could upturn society as we know it:

No nation is yet ready for the changes ahead. High rates of labor force nonparticipation leads to social instability, as does a lack of consumers within consumer economies. It turns out, humans are good at designing things, but not so great at picturing a world that their technology will create. What’s the big lesson to learn, in a century when machines can learn? Maybe it is that jobs are for machines, and life is for people.

Ben Sisario and Karl Russell profile the declining fortunes of the music industry over the last ten years with growth streaming services and vinyl sales failing to fill the hole left by declining CD sales. Whilst the figures don’t allow for revenues from other revenue streams such as concerts, sponsorship and branded content initiatives, overall, the picture isn’t particularly healthy: 

Music industry revenues

An interview with Michael Rosenfeld sheds some light on how online dating is (and isn’t) changing the nature of relationships in the 21st century:

I don’t think that that theory, even if it’s true for something like jam, applies to dating. I actually don’t see in my data any negative repercussions for people who meet partners online. In fact, people who meet their partners online are not more likely to break up — they don’t have more transitory relationships. Once you’re in a relationship with somebody, it doesn’t really matter how you met that other person. There are online sites that cater to hookups, sure, but there are also online sites that cater to people looking for long-term relationships. What’s more, many people who meet in the online sites that cater to hookups end up in long-term relationships. This environment, mind you, is just like the one we see in the offline world.

The rise of Donald Trump is one of the more interesting (and scary) phenomenons in the US’s current election cycle. Clare Malone looks at where Trump’s support comes from:

The Upshot’s look at the geography of Trumpism showed a number of variables linked to areas of deep Trump support — counties where a high proportion of the population is white with no high school diploma, where there are large numbers of mobile homes, and where there is a poor labor-force participation rate. Political scientists Michael Tesler and John Sides recently pointed to new research that shows “both white racial identity and beliefs that whites are treated unfairly are powerful predictors of support for Donald Trump in the Republican primaries.”

Whilst playing to race is an important part of Donald Trump’s success, changing demographics point to a strategy of appealing to America’s white population as becoming increasingly untenable in the future according to Pew Research forecasts:

The changing face of America

The recent terrorist attack has led to an inevitable concerns among Europeans about their personal safety. Annalisa Merelli’s analysis of deaths and injuries from terror attacks in Western Europe point to the region being no more dangerous than in the recent past although digital media is no doubt amplifying current fears:

Dead and injured in terror attacks in Western Europe

The featured image shows a Hazul Luzah mural from Underground Paris’ interview with the Portuguese artist.

Thought Starters: TV, messaging, innovation and tension in Israel among other things…

Thought Starters provides me with a chance to review the research and opinions that I’ve read over the last week or so. This edition looks at the evolving worlds of mobile messaging and television, the increasing pace of innovation and profiles of network effects, intergenerational equity, Israel, Denmark and Brazil among other things.

Tomaž Štolfa reports on the evolution of the messaging formats, from IRC through to the movement to richer model we have today which goes well beyond acting as a means of basic peer to peer communication:

Each message has the potential to be a mini application. It might be just an application that displays text, a photo, or alternatively presents an interface for something more complex in the constrained environment of a message cell. There is an unlimited set of opportunities to create bite size applications like a photo carousel, media players, mini games, inventory items, in-messaging payments, and many others.

Snapchat has emerged as one of the break out winners in the mobile messaging space although monetisation has definitely trailed far behind user growth. Mark Suster argues that Snapchat’s reach, immediacy, authenticity, engagement, geography, brand recall and monetisation point to it being a channel you’ll see a whole lot more of in months and years to come.

Matthew Ball and Tal Shachar do some crystal ball gazing for the television and online video sector and positing three different business models (scale feed; social feed; and identity feeds) that are likely to provide significant business models in the future:

The end of traditional television has begun. That much is clear. And even if authentication is figured out, TV Everywhere isn’t the answer. The future of video will look, behave, be valued and interacted with very differently than it has in the past. It won’t just be a digital adaption of linear, and it won’t just be more Netflixes.

CB Insights’ Corporate Innovation Trends provides a window into why there’s so much incessant talk about disruption. Various technologies and business strategies are making it much easier to launch a startup:

Cost to launch a tech startup

At the other end of the scale, companies are finding their moment in the spotlight shrinking with firms on average spending less time in the S&P 500 Index:

Average company lifespan on S&P 500 Index

Before you put all your life savings behind a high growth startup, it’s worth repeating that 92% of tech startups fail. There’s no secret ingredient for successful startups but a recent presentation from Andreessen Horowitz focuses on the role of network effects, contrasting it with economies of scale and virality which it is sometimes confused with:

Network effects versus Virality versus Economies of scale

Ross Baird and Lenny Mendonca call for business models that address the financial and geographical concentrations of wealth typically associated with the startup economy:

We need to figure out how to make the system work for everyone in the face of technological changes. We need policymakers to incentivize regional and industry diversity in our innovation, and entrepreneurs to focus on the larger, thornier questions related to building businesses that share the wealth better among those who create them — not design a system to spread the crumbs a little better.

Doc Searls and David Weinberger  who are among the authors of the Cluetrain Manifesto, have pulled together some new “clues” in their call for a more collaborative open internet:

Sure, apps offer a nice experience. But the Web is about links that constantly reach out, connecting us without end. For lives and ideas, completion is death. Choose life.

The globalisation of the world economy can be clearly seen in a recently released report from McKinsey with growth in interregional data. Among the causes and effects are that startups are finding it easier to tap global markets whilst consumers are increasingly looking to interact with communities of interest rather than proximity:

Global flow of data and communication
Morgane Santos gives a spirited called for Designer Daves to take a less conformist approach to digital design in what should be a still evolving medium:

Certainly, design should follow some basic paradigms to make whatever we’re designing easy to use. All scissors look fundamentally the same because that’s what works.

But digital design—whether it’s for desktop, mobile, VR, games, whatever—is still relatively young. We simply do not know what the best solutions are. At best, we’ve reached a local maximum. And so long as we reward predictable designs, we will never move past this local maximum.

Much of the attention on income inequality has focused on the growing share earned by the very wealthy. Research in The Guardian on the other hand has pointed to the disproportionate share of disposable income held by older age cohorts with younger audiences having to fight increasingly hard to get a foot up on the economic ladder:
Pensioners have seen significantly higher disposable income growth than young people in almost every wealthy country over the last few decades
 The Israeli-Palestinian conflict has always presented something of a conundrum with sympathy for the plight of the Palestinians tempered by concerns for the more moderate Jews looking for a peaceful resolution. Recently released research from the Pew Research Center sheds some light on the Jewish and Arabic populations and points to the growing political divide between the two. Unfortunately a peaceful resolution looks increasingly far off:
Israel's diverse religious landscape
Whilst we’re on the subject of the Middle East, The Economist looks at which countries are (or aren’t) being generous in their welcome towards Syrian refugees:
Syrian refugees by country
 One country that hasn’t welcomed them with open arms is Denmark. Hugh Eakin looks at the increasingly hostile attitude among many Danes and the Danish political system to the plight of refugees which unfortunately is becoming increasingly reflective of many other European countries:
In January, more than 60,000 refugees arrived in Europe, a thirty-five-fold increase from the same month last year; but in Denmark, according to Politiken, the number of asylum-seekers has steadily declined since the start of the year, with only 1,400 seeking to enter the country. In limiting the kind of social turmoil now playing out in Germany, Sweden, and France, the Danes may yet come through the current crisis a more stable, united, and open society than any of their neighbors. But they may also have shown that this openness extends no farther than the Danish frontier.
Many international news reports from Brazil seem to point to a country that has had enough of corruption in the ruling PT party. Glenn Greenwald, Andrew Fishman and David Miranda give a more balanced account, not denying accounts of corruption but also pointing to a ruling elite who would like to see the democratically elected government out of power:
Corruption among Brazil’s political class — including the top levels of the PT — is real and substantial. But Brazil’s plutocrats, their media, and the upper and middle classes are glaringly exploiting this corruption scandal to achieve what they have failed for years to accomplish democratically: the removal of PT from power.
The featured image is an Add Fuel mural from the Memoire Urbane Festival in Gaeta, Italy and published in StreetArtNews.

Thought Starters: mobile internet, adblockers, sexism in the workplace and the developing world

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read over the last week or so, highlighting the more interesting trends, developments and changes in the world we live in. This time we’re looking at the growth of mobile, the role of adblockers, the impacts and origins of sexism in the workplace and the internet in the developing world among other things. Happy reading.

The growth of mobile has seen the emergence of a whole new range of digital channels, but Visual Capitalist’s research points to the largest platforms all being controlled by Microsoft, Google or Facebook. That being said, there are range of platforms (WeChat, Snapchat, Slack, Netflix, Spotify) that fall short of a billion users but dominate within their respective sectors or geographies and could present a challenge to the market incumbents:

Apps or programmes with more than one billion active users

The IAB (US) recently released research which profiles how American consumers are using their PCs and smartphones. What is apparent is the continuing move to mobile  although the same research points to computers still registering a higher volume of internet views pointing to the different ways these devices are used:

Nearly Two-Thirds of All Internet Time is Spent on a Mobile Device

Google and Facebook have responded well to consumers’ growing use of smartphones, taking more than half of the available mobile ad revenues and leaving the remaining players fighting over the scraps in the US. eMarketer’s forecast suggests this isn’t going to change any time soon:

Net US mobile ad revenue share by company forecast

A continuing note of concern for media operators is the growth of adblocking with 22% of Britons using the software with this rising to 47% among 18-24 year olds according to Internet Advertising Bureau (UK) commissioned research.

Dean Dubley’s analysis suggests the introduction of mobile adblocking services won’t decimate the online media sector but is likely to further strengthen the hand of Google and Facebook:

The bottom line is that screaming headlines in stories like those from ZeroHedge (link) about “the risk to Internet companies’ business models” are nonsense. Ironically, it’s Google and Facebook’s approach to advertising that is safe. Small online publications using other advertising channels may not be so lucky. I noticed this tweet referencing mobile advertising growth forecasts from Goldman Sachs (link) which seems to suggest that Wall St is sanguine about the adblocking “threat” and that rapid growth in revenues will continue.

Among the likely responses by media operators to growing adblocker usage is a growing reliance on native advertising which is reflected in Enders Analysis’ recent forecast for Yahoo:

Forecast for the growth of native advertising in Europe

Whilst a few apps such as Facebook are nearly universal in their appeal, others give a clearer indicator as to who the user might be. Researchers have looked to profile the correlation between the ownership of different mobile apps and various demographic characteristics and income to develop profiles of mobile users. You can check out who they think you are in quiz – they got my gender and age wrong (I’m definitely male and over the age of 32) although I’m guessing not being a US resident probably didn’t help the profiling process.

Slack has been touted as the solution to the problem of information overload in the workplace with over 2 million daily active users. Samuel Hulick provides a more sceptical view warning that this “asynchronish” is in many cases compounding rather than addressing the problem:

Maybe you will say I’m afraid of commitment, but I’m just not interested in a relationship that seems to want to swallow up more and more of my time and attention, and demand that more and more of my interactions with other people go through you first.

Jeff Goodell has written an extended feature article on artificial intelligence and machine learning. Worth a read if you’re keen to get up to speed with what’s happening in the sector:

Despite advances like smarter algorithms and more capable robots, the future of superintelligent machines is still more sci-fi than science. Right now, says Yann LeCun, the director of Facebook AI Research, “AIs are nowhere near as smart as a rat.” Yes, with years of programming and millions of dollars, IBM built Watson, the machine that beat the smartest humans at Jeopardy! in 2011 and is now the basis for the company’s “cognitive computing” initiative. It can read 800 million pages a second and can digest the entire corpus of Wikipedia, not to mention decades of law and medical journals. Yet it cannot teach you how to ride a bike because its intelligence is narrow – it knows nothing about how the world actually works

Developments in software technology including artificial intelligence are rapidly expanding the scope of what computers can do. Nathaniel Popper profiles Kensho’s role in automating some of Goldman Sach’s research roles, highlighting how automation is increasingly emerging as a threat to white collar jobs:

The lead author on the Oxford paper, Carl Benedikt Frey, told me that he was aware that new technologies created jobs even as they destroyed them. But, Frey was quick to add, just because the total number of jobs stays the same doesn’t mean there are no disruptions along the way. The automation of textile work may not have driven up the national unemployment rate, but vast swathes of the American South suffered all the same. When it comes to those A.T.M.s, there has, in fact, been a recent steady decline in both the number of bank branches and the number of bank tellers, even as the number of low-paid workers in remote call centers has grown.

This points to a disconcerting possibility: Perhaps this time the machines really are reducing overall employment levels. In a recent survey of futurists and technologists, the Pew Research Institute found that about half foresee a future in which jobs continue to disappear at a faster rate than they are created.

Virtual reality is another technology that’s spilling out of the lab. Whilst it’s great to see the technology in the real world, Daniel Harvey profiles how a lack of diversity is leading to accidental sexism reflecting wider problems in the tech sector:

Based on that pattern it should come as no surprise that VR suffers from much the same. Motion sickness in VR has plagued the format since its inception. Women have shown a greater tendency toward VR-induced nausea than men. But why? It’s all about unconscious bias and technology’s notorious self-selection bias.

Discrimination is certainly not something exclusive to the tech sector. The absence of women in the boardrooms of many FTSE 100 or Fortune 500 companies reflects a range of barriers and will hold back their performance given they’re less able to reflect the needs of half the world’s consumers. It’s worth heading over to The Economist site where you can play with an interactive version of the following:

Facebook recently released its State of Connectivity report which profiles barriers to internet access for the developing world as part of its initiative. The key barriers to access highlighted in the report are the state of connectivity, availability of infrastructure, affordability, relevance and readiness of the population:

Barriers to internet access for developing world consumers

A valuable complement to Facebook’s report is Pew Research Center’s recently released research which looks at smartphone ownership and internet usage around the world including developing countries:

Percent of adults who use the internet at least occasionally or report owning a smartphone

With Britain’s Brexit referendum coming up on the 23rd of June, The Economist has profiled the regions that are europhile and eurosceptic:

UK regions' attitudes to Brexit

Whilst Europe is generally becoming more urbanised, this process (like technology) is unevenly distributed with different cities experiencing significant growth (Istanbul, Brussels, Amsterdam) or decline (Katowice, Ruhr, Katowice, Ostrava, Bucharest):

Europe cities growth and decline

Claire Cain Miller and Quoctrung Bui profile changes in patterns of relationships and marriage in the US, highlighting the role of assortative mating in reinforcing social class and undermining social mobility:

Assortative mating is the idea that people marry people like themselves, with similar education and earnings potential and the values and lifestyle that come with them. It was common in the early 20th century, dipped in the middle of the century and has sharply risen in recent years — a pattern that roughly mirrors income inequality in the United States, according to research by Robert Mare, a sociologist at the University of California, Los Angeles. People are now more likely to marry people with similar educational attainment — even after controlling for differences between men and women, like the fact that women were once less likely to attend college.

The featured image is a mural by ecb / Hendrik Beikirch for the St+Art India event in New Delhi and published in StreetArtNews