2017 (and beyond) Internet Trends That Impact Consumers

The annual Kleiner Perkins Internet Trends report has been released and it’s a doozy.    This report has been feeding Silicon Valley investors for over two decades with complicated data points and fact-heavy graphs.  The investment community relies upon it to justify investments in emerging businesses and technologies.  But it has meaning for individual consumers as well.

  • Expect Smartphone To Get More Expensive:   Smartphone sales and Internet penetration growth are both slowing BUT the number of hours that we spend on mobile devices has gone up.
  • Mobile is Definitely a Big Thing:  We aren’t experiencing a “shift to mobile” as much as “the addition of mobile”, since desktop usage hasn’t declined much while mobile usage has skyrocketed to over three hours per day per person in the US
  • Expect More Mobile Ads:  There’s still more time spent on mobile than consumer ad spending on mobile devices, indicating a whole lot more advertising when you access websites via mobile.
  • Expect More Ads, In General:   Google and Facebook control 85% of online ad growth – these two companies pretty much own the digital ad market.  They literally have no competition right now, meaning they will dictate terms of how many ads and what they look like.  Ugh!   Plus, you’ll be subjected to ads everywhere you go:  location-targeted ads from Google, Nextdoor and Uber’s in-app ads are examples of how ad delivery and the ability to track outcomes are merging your location and advertising.
  • Kiss Keyboards Goodbye:   It’s not so much if, as when.   20% of mobile searches were issued by voice in 2016 and the accuracy rate of voice interpretation by machines is up around 95%.
  • Kiss Telephones Goodbye?   Customer service conversations are rapidly moving to online chat from telephones. 400 million customer service conversations happened in chat during December, 2016, twice as many as in July.
  • Kiss Your Local Stores Goodbye?   Perhaps not yet, but things are changing rapidly in the retail space. The report predicts that more than 8,600 brick-and-mortar stores may close in 2017. E-commerce is booming, having increased by 15  in the last year. The downside is that store closings are rampant, breaking a 20-year record. At least, FedEx, UPS and the postal service are smiling:  they delivered over 10 BILLION packages in 2016.
  • Streaming Music Prices may Drop.  Streaming music led by Spotify surpassed physical music sales, giving recorded music its first revenue growth in 16 years.  The Internet may be on the verge of figuring how to sell music profitably again.  That should result in more competition and lower prices.
  • You Will View More Sports on the Internet:  eSports are exploding,  with viewing time up 40% year over year, and an equal number of millennials strongly preferring eSports vs traditional sports.
  • You Will View More of EVERYTHING on the Internet:   Netflix went from near zero to 30% of the U.S. home entertainment market in 10 years.  Spotify, Amazon Prime and Google Play experienced comparable growth.   Meanwhile, fewer people are watching over-the-air or cable TV.
  • Email Will Get More Dangerous:   Email spam with malicious attachments is exploding as cloud usage increases, so be careful what you click.  This disturbing trend has led to more corporate data breaches, which exposed 100 million identities in 2016, so your privacy will continue to be compromised.
  • The Sharing Economy Is Still Expanding.   Tech companies drive wealth creation in China, where people pay for livestreaming, and bike sharing usage is skyrocketing.  Expect similar developments in the U.S.
  • Sorry Trump – Immigrants Are Leading The Way to Tech Prosperity:   60% of the most-highly valued tech companies in America were founded by first or second generation Americans while 50% of the top private startups were founded by first-gen immigrants.  Of the  25 of the most highly valued public companies in Silicon Valley, 15 of them were founded by first- or second-generation immigrants. Those companies employ 1.6 million people.
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