Monday, February 04, 2013

When Does A Tipping Point Become A Topple Point?

I finally did it.  I am now officially a cord cutter.  I am not the first one in my family.  I was preceded by my daughter, my niece and my sister and brother-in-law but I am clearly a very early adopter among those of us approaching eligibility for Medicare this year.

Pay-TV subscriptions peaked two years ago at 100.9 million households and within the next give years they will fall to 94.6 million, when online advertising revenues are projected to pass advertising revenues for television.

However, as commentator Jeff John Roberts notes, this is a “tipping point, not a revolution.”  To me it seems to be tipping very rapidly.

The metric for for ratio of speed at which firms within an industry lose leadership positions is called the “topple rate.”  Between 1965 when I was mid-way through my last year in high school and 2010 when I retired, the topple rate for all companies in the economy increased 40%.

A just released survey of nine global nation/markets by KPMG reveals that in just two and a half years after Apple’s launch of the iPad, more than 1 in 4 US consumers have or plan to get a tablet this year, more than half already have smartphones.KPMG Report 2013

One in seven prefer those devices for watching television.  More than half use them in a given month to access maps and directions, hastening the obsolescence of roadside billboards.

Some 42% of those who watch television are also accessing the internet via pc or laptop for purposes other than social networking.  Another 17% are doing so via a smartphone and 22% are social networking while watching television.

Most telling about the future of television as we know it is that smartphone adoption has already crested the 70% level for the generation of consumers 24-32 years old and the generation behind them is set to pass them.  Any projection of the topple rate for television as we have known it should focus there.

It isn’t easy for television-oriented businesses.  Most seem stunned and somewhat in denial.  But remember that Apple came dangerously close to extinction in the 1990s until reinventing itself with a revolutionary paradigm.  Borders was the second-largest retailer in the world in 2005 and bankrupt by 2011.

The topple rate is not only increasing but accelerating.  Just look at what hybrids have done to the automobile industry.

The first photograph was taken in 1826 but it took another 75 years for point and shoot photography to be mass-marketed with the introduction of the Brownie camera in 1900.

The Instamatic was introduced in 1963 but digital photography was invented six years prior, about the time patents also emerged that would eventually lead to convergence of photography with other technologies.

Photography was revolutionized again in the year 2000 when the first digital SLR was introduced and by 2003 more camera phones were sold than stand-alone digital cameras.

Sometimes a new technologies extend the life of another.  The tablet is doing that for the much maligned software PowerPoint.  According to Rick Enrico of SlideGenius, partly due to tablet adoption, worldwide there are 30 million presentations given daily by 500 million PowerPoint users.

A report by Forrester projects that almost as many tablets will be in business use by 2016 as The Diffusion Group (TDG) projects there will be households still using pay-TV services that year.

That seems like a revolution to me.

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