Horizons newsletter – Week 29 // 2017
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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At the dawn of the Internet, it was widely believed that no one would want to pay for online services. The $18 billion video-on-demand market and the 112 million paying music streamers, however, have falsified this belief. Paid subscription for online news is another online service market that is on the rise. Interestingly, consumers’ willingness to pay for online news is correlated with their willingness to pay for online video and music streaming services. However, younger people spend more money on online news services, just like they do on online video and music services, compared to older consumers. Mobile-first services from for instance the New York Times attracts a large Millennial audience, despite operating a paywall. In addition to using mobile devices and voice-activated assistants (like Alexa), younger people increasingly prefer algorithms to filter their content, compared to older generations who go for human professionals. With online news consumption becoming an integral part of Millennials digital ecosystem, the news industry should adapt to ‘news-as-a-service’ and address the ‘digital divide’ within the population of online news consumers.
Smile for some beats
Recently some Facebook patents were approved concerning the use of the typing speed of smartphone users, the pressure on the typing pad, and the location and images of the user which are captured by the smartphone’s camera to determine the user’s emotional state. In turn, the algorithm recommends message formats and emoji’s matching this state. We have been familiar with services using AI to recommend content or products that fit our taste. Spotify, for instance, recommends songs based on our previous music choice: its tailored playlists from Discovery Weekly reached 40m users within its first year. These recommendations, however, are based on demographics and usage data that users give away more or less consciously. Data derived from our facial expressions and typing behavior are of a much more unconscious origin, showing us that technology and the human body are moving closer. Using our unconscious data as input, services investing in AI will be able to show us content and products that we didn’t know we wanted or needed yet.
An open door to innovation
The competitiveness of nations depends largely on their power to innovate. The top rankings of competitive nations have not changed remarkably over the years, but shifts are emerging. Protectionism reduces innovation capacity because it limits exposure to competition; new ideas and technology transfer from imports and foreign investment. The recent G20 did little to ease fears of rising protectionism. The U.S., which is among the world’s most competitive and innovative countries, pressed on adding a sentence to recognize the right of members to apply “legitimate trade defence instruments” to face “unfair trade practices”. For smaller countries, taking a protectionist course was never an option. The top 10 competitive and innovative countries are mostly smaller countries that function as hubs in the global economy of capital and ideas, e.g. the Netherlands and Denmark rose on both lists. Current frontrunners have to stay innovative in order to stay ahead; a strong business environment – like efficient regulation, low corruption, economic stability – alone is no guarantee to a high position in the future, whereas openness to the world’s ideas and trade is a necessity.