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2012 Technology and Media Predictions

by Anthony Bontrager on January 2, 2012

Expectations for 2012 in the technology and digital media spaces have never been higher – even with the backdrop of global economic uncertainty and the less than stellar IPO showings of the industry’s best and brightest.

Personally, I believe 2012 will be a great year for technology and media companies – especially those focusing on mobility and enterprise-level social platforms.  However, if asked to provide my top 5 predictions for 2012, this would have to be it.

1.  Social engagement will swing back to on-deck solutions

For those millions of brands that have flocked to Facebook, Twitter and other mediums in order to draft off their large user communities and target distinct customer sets, the gains in tonnage of “likes” or “follows” were not met with a correspondingly high amount of brand engagement (see my earlier post on this issue – Boomerang).  Further, these very same social networking sites share very little in the way of user data with the brands that use their platforms, making it very difficult to measure their true effectiveness or determine an ROI on the social media spend.  As a result, a number of companies are moving their social spend back to their own websites or portals – which were largely ignored in favor of outbound social efforts – and are leveraging third-party social sites as feeders.  This pendulum swing of bringing social engagement back “on-deck” for companies and brands has already started to power a new breed of platforms and service providers focused on bringing robust social functionality and deep analytics directly to the enterprise.  Companies such as iQ Technologies have been successful in demonstrating both the functionality and efficacy for companies large and small and I expect this trend will continue to grow.

2.  Feature phones will continue to maintain relevancy

Contrary to the many reports, graphs and analyses that have been published on this issue, feature phones still hold dominant market share globally – travel anywhere outside the US and observe the device usage and you will see what I mean.  While this industry is admittedly a melting ice cube due to the prolific growth of smartphone adoption – economic and carrier issues will continue to keep this market segment afloat (globally) in the near term.  This spells opportunity for companies such as Velti and Motricity who have historically dominated the carrier market for feature phone solutions but were extremely late to the smartphone game.  Approached wisely, these two companies still have an opportunity to shape the mobile conversation as the world moves increasingly to smart devices.

3.  Apple will largely disappoint on TV

This will be not for a lack of trying I might add but candidly the market expectations for an Apple uber-TV device will simply outpace reality.  Further, given Apple’s need for complete control, and the programmer’s fear of harming the cash cow that cable represents tells me that we are still a ways from Apple disrupting the TV business as it did the music business.  This is one prediction I hope I completely get wrong.

4.  Online video will see more consolidation

The continued fragmentation in online video tells me that consolidation is on the menu for 2012.  A number of companies have done exceedingly well in the space over the past 3 to 5 years, yet are stalled in terms of growth and need a catalyst to drive increased scale (users, revenue, profitability).  Expect to see situations in which production-focused companies tie-up with video syndication entities, where little user overlap and the increased amount of available content fuel significant growth and re-shape the market.  This should be good for investors who have been looking for ways to unlock their investment in content companies.

5.  Tech IPO’s will continue to disappoint

Aside from LinkedIn, the hugely anticipated IPO’s of 2011 failed to live up to investor expectations or market hype.  Groupon’s business model and accounting practices were under attack well before the company went public. Pandora, which has stood the test of time, enjoys a fantastic product and continues to improve its customer numbers, is still beholden to the record labels for licensing rights and advantageous windowing.  The rise of Spotify and newcomer Senzari could put more pressure on this stock.  Finally Zynga, who’s investor roadshow was exceptional and who’s operating metrics clearly demonstrate a company worthy of launching an IPO, remains entirely beholden to Facebook.  This significant, single point of risk could keep this stock from reaching its potential.  Expect more of the same in 2012 as investors look to public markets for liquidity.  While not circa-2000 by any means, we would be well advised to heed the lessons of the past.

There you have it, my prognostications for the upcoming year.  Whether you feel I’m right, wrong or are indifferent, you can’t deny 2012 holds a lot of promise.

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