Alphabet’s growth slowed in Q1, but search remains the premier advertising product: protected against privacy changes, and poised to grow on a return to travel.
Investors focused on YouTube’s disappointing growth. Its exposure to brand advertising has slowed it relative to search, and it now has to compete with an increasingly formidable TikTok. User subscriptions could be a hidden strength.
The US remains the core of Alphabet’s business as uncertainty and energy price jumps hit Europe.
The UK government is on the cusp of introducing legislation that will force online platforms to monitor and mitigate the presence and spread of harmful and illegal content, in a regulatory first for big tech.
Affected companies should take note: they will need to prepare for a higher level of transparency and communication with regulators, and larger service providers will require expanded moderation, user verification and research capabilities.
Users should be protected as platforms balance complex competing duties. News publisher content has a carveout, but publishers may experience butterfly effects as the online environment is reshaped.
The UK mobile operators are increasingly vocal about their concerns regarding the tech giants, namely Apple and Google, encroaching on the mobile connectivity market.
eSIMs enhance the case for the tech giants launching their own MVNOs (such as Google Fi in the US) or, perhaps more realistically and concerningly, becoming gatekeepers to mobile airtime subscriptions.
Many things would need to line up for the tech giants to effect this and the MNOs need to stand as one to ensure that they are not successful. Policy makers should be equally reticent.
TikTok has reached a billion users worldwide just four years after its global launch, much quicker than social media rivals, though its ban in India is a drag on growth.
TikTok’s popularity with under-25s has contributed to a hollowing-out of Meta’s active userbase. During the pandemic, TikTok also expanded its reach among older demographics, cementing its position within the mainstream and posing a further threat to Meta.
TikTok could earn twice as much revenue as Snap in 2022, making it the first app to break out of the mid-league in years, with a huge runway for growth backed up by ByteDance’s remarkable success in China.
Alphabet's stunning growth reflects a shift online that has outlasted pandemic restrictions. Google search is at the heart of online commercial activity
YouTube's slower growth is not yet cause for concern: it is still the biggest website in the world, with growth potential through subscriptions and transactable ads, as well as more brand spend
Alphabet might struggle to balance privacy concerns in the context of the online advertising ecosystem. The future of personalisation in ads is uncertain as Alphabet cancels one of its cookie-replacement technologies
Ongoing supply difficulties for PlayStation and Xbox through 2022 and beyond will result in the install base for the generation being permanently impacted. It raises the question: if you can’t buy a console are they even relevant?
VR will stage a comeback this year, as Quest 2 has its highest sales ever, the category will find new appeal from game (and metaverse) developers. If a rumoured Apple VR/AR headset eventuates, expect white-hot interest
Netflix will make strides in its games service―but mostly behind the scenes to deliver a once in a decade transformation of the industry. Don’t rule out a critical and exclusive mobile hit
The UK net neutrality rules are up for review; as usual, the operators are pressuring for relaxation, and there are strong arguments that the competitiveness of UK telecoms markets make such rules innovation-quashing with no consumer benefit.
The chances of mainstream video content providers producing a windfall for telcos are slim, but there are a host of more intensely commercial content providers which have far greater potential to pay extra money for higher quality content delivery.
Future services such as virtual and augmented reality will stretch even FTTP/5G networks; allowing the telcos to develop custom business models to facilitate their delivery may well speed up the development and implementation of the metaverse in the UK.
Amazon is finding women’s fashion, a missing piece of its household-centric model, a tougher nut to crack than downmarket apparel.
Higher-end US department stores are pushing back with an omnichannel model, emphasising long-term partnerships, a clever full-price/outlet model, and experiences which cross the online-offline divide.
In apparel, Amazon and big box retailers have already triumphed over lower-tier American department stores, and even prestigious fashion brands are finding it harder and harder to refuse cooperation with the giants.
With a carefully priced, strong line-up of iPhones, Apple will consolidate its main revenue line and core user base in the near term
The latter feeds into a services business showing impressive growth, but which is also marked by missed opportunities and mounting negative consequences on the rest of the online ecosystem
For media businesses, Apple’s impact is larger than ever, inevitably leading to new kinds of friction around commercial terms, App store policies and browser features
Video-sharing platforms, such as YouTube and Facebook video, enjoy a light-touch regulatory regime for harmful content and advertising. As video viewing of non-broadcaster content grows, the regulatory gap between TV broadcasters and video-sharing platforms widens, part of a broader uneven playing field for publishers and platforms.
However, there is momentum against this: the “platforms vs publishers” divide looks set to weaken in EU law, and the platforms themselves are investing more in combatting harmful content within a self-regulatory regime, though their internal policies and outcomes are still opaque.
Effective and fair regulation of video-sharing platforms would involve the balancing of national freedom of speech conventions and the public utility of user-generated video hosting with concerned stakeholder views: something approaching a co-regulatory system for online video-sharing platforms.