EVP, Head of Innovation, Zenith USA /Keynote Speaker/Writer/
I wrote this piece 16 months ago, and it seems every bit as valuable now. You can see it on Forbes by clicking here, but honestly why voluntarily stick forks in your eyes visiting one of the worst websites known to mankind?
We may wistfully remember the 1970’s and 80’s, when advertisers could reach 60 million people on TV who were watching Cheers or M*A*S*H. Equally, we may love to hark back to a period before today’s media fragmentation; in 1984, for example, national newspapers had a circulation of 63.3m in the USA.
Now, the situation is very different. Part of that is due to Facebook. We can’t really overestimate how exceptional Facebook’s impact has been – and is being.
With Facebook, we’re seeing a company that is not only used by 1.6 billion people each month, but used heavily and, often as their gateway to the wider Internet. Three of the five most used apps in the US are owned by Facebook. An average of over 1,000 minutes per month are now spent on it by its users. For many, most notably users in eastern Asia, Facebook is not just the Internet – it’s bigger than the Internet.
After Facebook came perilously close to missing the mobile revolution in 2009, the company has slowly pivoted towards being not just the gateway between you and your friends, but as the primary interface between you and everything online.
In my now globally famous piece Battle for the customer interface, I posited that it was thin, specialist, horizontal companies that were best placed for the success in the future. Uber, Alibaba and Airbnb were just three examples of companies-as-platforms, linking wants with needs without owning any infrastructure in order to rapidly monetize and scale. The other example that I gave was Facebook.
As When Facebook is now a primary means of content access and delivery for 1.6 billion people, it’s hard to see where they can’t succeed.
Facebook as a publisher
Facebook has long been a media owner. It makes money from advertising and, thanks to billions sharing the food, thoughts and data to the network, it is also hosting a vast amount of content. With Instant Articles, it is now wrapping content from anyone inside its own walled garden.
It sometimes feels like Facebook is trying to take the entire published Internet, host it on their servers and by leveraging the power to stop adblocking, making money from access to this content via display media. Even more bold is the “save” button, allowing people to bookmark content anywhere on the web and view it within the Facebook interface.
Facebook as TV company
In 2014, Facebook served 1 billion video views per day. A year later, that number rose to 8 billion daily video views. If that’s not a sign of transformation at work, I don’t know what is.
For those in television, it’s vastly important how different TV is to video: it’s different content, consumed on different screens, monetized and distributed in a vastly different way. To a generation of people who have grown up watching YouTube, swiping tablets, streaming movies on phones, watching Live NFL on Twitter TWTR -1.25%, it’s a distinction that means nothing. The world needs to wake up to the fact that like the difference between Radio and streamed or owned music, we don’t care how the things we love get to us, we don’t care about record labels or channels any more, we just want to consume what we love, when we want.
I’m not for one moment suggesting that Facebook becomes a commissioner of content. They won’t ever be a Netflix NFLX -0.12%, BBC or Amazon Prime, but they can become a storage system to host and monetize content from others. They don’t need to understand how to commission or make shows, they just need storage in vast quantities, algorithms to bubble up content most likely to make people happy and then a way to make money from views.
BuzzFeed showing 2.8m people how to blow up a melon may not have been the future of TV, but deals with TV production companies as well as with publishers like Buzzfeed could easily open an era where Facebook becomes a TV “station”. When most TV’s are Internet connected, anything is possible.
Facebook as a retailer
Alibaba, the world’s most valuable retailer, doesn’t hold stock or fulfill orders: it matches needs and outsources every part of the transaction. Facebook is well-placed to hang onto Alibaba’s coat-tails due to its reach and range of media for advertising and conversational commerce.
Facebook as infrastructure
As Mark Zuckerberg has said, Facebook’s goal to connect the next billion. However, the company’s annual F8 conference held last week gave more details about Facebook’s Terragraph system, connecting urban users with 60GHz fiber.
Historically, we have assumed that telecom operators, with LTE and 5G, were to set the agenda. But, what if efforts like Google Fiber, Terragraph, and mesh networking could leapfrog legacy providers and vertically integrate? Maybe one day, Facebook will own the content, the distribution, the monetization, and the pipe.
It’s hard to see where Facebook can’t go
Facebook payments will soon provide a thin service built on existing payment structures, making buying things more easy and – inevitably – capturing more data.
The company could equally become a big player in ticketing, leveraging our mobile usage, relationships with events, and its payment layer to sell tickets. With its Oculus Rift VR headset, it could also own what some to believe the next screen: VR. Facebook can then move upstream, building and monetizing the developing world thanks to their Internet connectivity drones.
And, thanks to connecting that further billion, Facebook will soon have the largest electronic database ever conceived by mankind. It will be tracking everything about everyone: knowing who they are, how they behave, where they are going, what they’ve bought, and even what their plans and intentions are, and what they need to fulfill them. This, combined with owning the interface for how they consume content could be the greatest opportunity ever known.
That is unless, of course, we all jump ship tomorrow to SnapChat…