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. Here are some of the highlights (and lowlights) of the most recent report:
- The Internet Really Is Everywhere: Over 50% of the global population can access the Internet. Although, the majority of the 3.8 billion users are located in China and India, two countries that have placed heavy restrictions on Internet data.
- 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: For the first time, Americans spent more time on their mobile devices than they did watching TV. While desktop usage hasn’t declined much, mobile usage has skyrocketed to over 3.5 hours per day per person in the US.
- Multiplayer Video Games Are Getting Big, Too: Over 250 million active users (most under age 17) are being inexorably drawn to Twitch and Discord gaming platforms.
- It’s All About Images: Over 50% of all tweets now include images. Instagram, Facebook & Google are all promoting use of images, rather than text. Advertisers believe that images are superior to text information, as images facilitate better storytelling.
- Transitioning to Digital Payments: Almost 60% of all payment transactions are now being done with digital payments, rather than in-store.
- Encrypted Messaging Platforms are Emerging: Encrypted messaging traffic has jumped from 53% to 87% of all web traffic in just 3 years. Services such as WhatsApp and Telegram are eclipsing non-encrypted messaging like Twitter and WeChat.
- Constant Online Usage: American adults “almost constant” online usage rose to 26%. Among the 18-to-29 demographic, that number jumps to 39%.
- Cyberattacks Will Continue to Rise: …..and they’ll get tougher to defend against. The attackers are largely supported by state/countries who use these operations to better “compete” in the global markets. These attacks are increasingly focused upon consumers’ personal data.
- Internet Bullying Shows No Sign of Subsiding: Melania Trump’s efforts to combat cyberbullying appear to have fallen on deaf fingers? 42 percent of US teens have experienced offensive name-calling online, terrorists are being radicalized on sites like YouTube, and social media has encouraged increased political polarization.
- Healthcare Costs Continue Their Unrelenting Rise: In a very worrying trend, healthcare costs continue their unabated increases. USA’s per capita costs lead — by a lot — other developed nations. American health expenditures dipped briefing with the adoption of Obamacare, but resumed their rise in Obama’s second term.
Previous trends Identified by KleinerPerkins continue to manifest:
- Kiss Keyboards Goodbye: 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? Over 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. (Editor’s Note: the Coronavirus Pandemic will substantially accelerate this trend)
- 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.
- Email Will Get Even 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.