We'd like to advise that the following
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This is The Future, This Week on
Sydney Business Insights.
I'm Sandra Peter, and I'm Kai
Riemer.
Every week we get together and look
at the news of the week.
We discuss technology, the future of
business, the weird and the
wonderful, and things that change
the world. Okay, let's start.
Let's start!
Today on The Future, This Week: part
one of a special with Simon Kemp
on the State of Digital.
I'm Sandra Peter, I'm the Director
of Sydney Business Insights.
I'm Kai Riemer, professor at the
Business School and leader of the
Digital Disruption Research Group.
So Sandra, what happened in the
future this week?
Well something special.
I'm not here, I'm away this week.
Well not this week, but the week
that this is going to air.
So we have a treat for you today.
Hi I'm Simon Kemp.
I am the CEO of Kepios,
which is a marketing advisory
service.
In a two-part special we have a
closer look at the state of digital
in 2019.
So in part one we will look
at ways the Internet is still
growing. What role does video play
in this, or translation,
or voice recognition?
We also look at games,
gaming, esports and
Tinder.
So I recently got the chance to sit
down for an interview with Simon
Kemp.
Hello I'm Simon Kemp on the CEO
of Capulet which is a marketing
advisory service.
Our reason for being as a company
is helping companies, organizations
around the world to make sense of
what people do on the Internet.
A big part of that is producing the
Global Digital reports, which we
publish in partnership with We Are
Social and Hootsuite.
Huge collection of data, thousands
of charts, 247 different
countries covering nine year's worth
of data so far, ongoing.
Anything you want to know about how
people use the Internet, social
media, mobile and e-commerce,
and pretty much every country in the
world.
So Simon, welcome to The Future,
This Week. You're a Scotsman in
Singapore who has worked for
Unilever, for Google, for Coca-Cola,
now does his own
thing with over 10 million people
having read your books, having read
your reports, and each year you
produce the Global Digital
overview which brings together tens
of thousands of data points into
over 500 charming slides
that you're going to talk to us
about today.
Yeah I'm going to take you through every
single one of those slides today.
Well Simon's material is quite
extensive so obviously we will not
hear about every single bit that he
has to offer, but we've used Simon's
material on the podcast
quite often, so he's really a
treasure trove of
information when it comes to
all aspects of digital, the
Internet, and what people do with
mobile apps.
So first thing to know with Simon
every year, and the first thing
we're curious about every time, is
what is the state of digital that
year, and what are some of the more
interesting things that come up
every year.
So first can you tell me a little
bit about the state of digital in
2019.
Yes. So I think no surprises
here. It's pervasive.
So we've got to the stage now two
thirds of the world, from newborn
babies to people over the age of
100, already have a phone.
So that's the, sort of, the key
driver that's going on here.
58 percent of the world's population
connected to the Internet and almost
half of the world's population using
social media. So we've kind of got
to the stage now where most people
are using digital connectivity
stuff in pretty much every aspect
of everyday life.
So this is no longer new media.
We can probably park that expression
forever. The Internet is just a
straightforward part of everybody's
life.
So you've been doing this report for
quite a few years now.
What have you learned this year
where you went, that's actually
really surprising.
It's weird, the biggest finding this
year came on one of the very first
slides in the report the fact that
the growth in Internet users around
the world actually accelerated in
2018. This was a real surprise
for me. Every year I'm slightly
terrified that I'm going to produce
the report, and collect all this
data and then get to these sort of
end of the collection period and go
'Oh there's nothing interesting to
say this year'.
But looking at the growth in
Internet users is the very first
thing that we check.
And that growth accelerated, more
people came online in 2018 than
came online in 2017, for the first
time.
It just blows my mind.
So there was more than a million
people that came online for the
first time every single day
during 2018, on average.
So just mind blowing stuff
how quickly that's growing,
especially with what happened last
year. So you look at things like
Cambridge Analytica, you look at all
of the congressional hearings, and
the privacy concerns that people
have got.
We were really expecting to see
those numbers slow down.
We were expecting to see some people
step back from digital, but actually
the opposite was true.
People are spending as much time,
if not more time, doing all of the
various things that they were doing
before. They're also starting to do
new stuff, and there's more of
them as well. So we're up to the
stage now, the latest numbers that
we've got 4.437
billion people around
the world using the Internet.
It's just incredible.
So it's not slowing down, it's
getting bigger. That was a surprise.
Why do we think this is, is it just
economic development, more people
having access to that technology, or
is it maybe better reporting in
ertain parts of the world?
Yeah, it's definitely both of those
things. So I think the better access
to data certainly one part of it.
And we're seeing increasingly
governments taking proactive steps
to understand connectivity
in their country, whether it's from
economic empowerment, through to
education. There's all sorts of
reasons why it's important for
governments to know how many
people in the country are using the
Internet, whereas previously I don't
think that there was that level of
interest perhaps, in collecting.
And it is hard work, there's no
single source of information for
governments on how many people in
their country use the Internet.
So they need to go out and survey,
they need to speak to telcos, they
need to do all sorts of different
stuff.
But increasingly there's a very
clear motive to do that.
So I think you know, you're right,
better reporting is definitely a
part of it, but the financial
element of this is critical
and I think it's predominantly
being driven by the market
economies. So you're seeing cheaper
devices, especially in the
smartphone world, you can get a
functioning smartphone
for 25 dollars in some markets,
admittedly it's not going to be the
world's most powerful, but it does
what it needs to, it connect to the
Internet.
You can now get data incredibly
cheaply around the world, it's still
not necessarily cheap from the
perspective of the person in those
countries that needs to buy it.
So the example here: in India
today it is possible to buy a
gigabyte of mobile data for two
cents.
So if you think about that, 50
gigabytes for a dollar that's
pretty good by most international
standards.
And yet, you know, from the
day-to-day living standards of
certain families in India that's
still something that they need to
consciously make decisions around.
Is there a compromise between that
versus doing something else?
So it's not like you and I being
able to afford data at that price,
it's obviously priced for the market
it's in. But nonetheless, that's
considerably cheaper than it was
even just a few months ago.
So cheaper devices, cheaper data,
and then I think another key driver
that goes along with that is access
to content.
So one of the most interesting
barriers if you like to increased
adoption of the Internet around the
world is finding content that you
can make sense of as an individual.
Whether it is a language that you
can understand, or more importantly
the vast majority of stuff on the
Internet today is still text-based.
And obviously there's a rise of
YouTube and video and all these
other things. But if you look at the
Internet in its entirety, the
worldwide web, are we still have to
call it that? It feels very
antiquated.
But the vast majority of content on
the Web is still text-based and most
of that is in English as well.
So you can see how automatically you
start to shrink down the pool
of people who can understand and
make sense of that.
Do they speak English?
Do they have sufficient levels of
literacy to be able to make sense of
the written word?
Increasingly, things like social
media and user-generated content,
you're finding that that
spread, if you like, of reach
is coming into new vernacular,
languages, it's coming into new
cultural contexts.
we're looking at new formats of
content that are more accessible to
different kinds of people.
So it's not just that it's
more affordable, the content
that people get when they get onto
the Internet is now more accessible
as well. Because previously, if you
look at a lot of countries like
India for example, where there's so
many different languages, if you
don't speak a language that's on the
Internet then there's no real
benefit to being on the Internet.
What are you gonna do? You can't
understand any of it.
So yeah, I mean all of these things
are coming together in the perfect
storm, if you like.
It's driving that growth, it's
making it more appealing and it's
more affordable at the same time.
I recently came back from Shanghai
and I was chatting on WeChat to one
of my colleagues, and they were
writing in Chinese and I was
responding in English and WeChat was
translating, and you could translate
in real time. So we were having a
conversation without either
of us knowing each other's
languages.
That kind of stuff I find absolutely
amazing. So I just I studied
languages at university, as well as
studying marketing.
So anything that involves a foreign
language I've got a particular sort
of love for, and I was recently up
in Tokyo. So similar experience to
yours. We're sitting in this tiny
little bar in the middle of Tokyo
speaking to this Sake
guy. So he's like, he's behind the
bar, he's 75, 76, speaks
not a word of English, he speaks a
dialect of Japanese.
And we're using Google Translate,
and we're speaking into it, he's
speaking into it, and we're having a
full-on conversation, admittedly
after a couple of drinks it gets
easier. But it's just the wonder
of the Internet from my perspective,
making suddenly the ability to find
people with similar interests and to
communicate with them wherever they
are in the world.
We talk a lot about the dangers of
privacy and stuff, but I'm such an
optimistic person when it comes to
the Internet I see the amazing
opportunities in there instead.
So to me this is really interesting
because in the West we have this
experience of the Internet as a
collection of websites, it's
text-based.
We read, we do e-commerce.
But according to Simon that's not
the experience that many other parts
of the world have.
Yes, and indeed if you think about
it in many other parts of the world
people might not speak English, or
might not even be literate,
or it might be regions of the world
where you have a number of different
dialects, and people can't engage
with dialects other than their own.
And indeed where people interact
differently with the content.
And I was recently in Taipei, the
driver had about five screens in
his car, all of them playing various
types of video content, and indeed a
big iPad with a video, and
he was changing videos on YouTube
via voice.
So that makes sense then that while
in the West Internet growth
is pretty much saturated, the
rise of affordable mobile
devices that we see around the world
leads to easy recording
and upload to video, which then in
turn drives engagement and uptake
of the Internet.
And at the same time the advances
in machine learning and deep
learning that, you know, drives
translation algorithms gives
people really good access
to English language
content, even though they don't
necessarily speak English or can
read English.
So there's one more piece to this
puzzle. There's actually one more
thing that Simon told me about that
actually the media quite often
misses, and that is voice.
One of the ones that frustrates me
most at the moment is the way that
voice control gets
portrayed in the media, especially
the marketing media.
If you read anything about voice
control at the moment there's this
massive overfocus
on Amazon's Alexa, or
Apple Homepod, Google Home, all
these great devices.
Those are really interesting.
There's definitely a massive
opportunity within that, but that's
not the be all and end all of voice.
There is so much more to it than
that. And the trouble is it's
completely skewing the conversation
and it's unfortunately distracting,
especially business people, from the
opportunities that are inherent
within voice.
So let me rewind, we're going to
nerd out a bit on data here.
Globally, the latest data we've got
from GlobalWebIndex who do a massive
study of Internet users around the
world, so we're talking millions of
people every quarter that they
survey and the sample they have is
representative of like 93, 94
percent of the Internet users around
the world, so it's huge.
Forty percent of the people they
speak to already use voice
every month today, but in Western
countries that figure is a lot
lower.
And in developing markets,
especially in India, Indonesia, if
you want to call China a developing
market (depends a little bit on your
perspective), but those three
countries China, India, Indonesia,
already more than half of the
Internet users in those countries
using voice control on
devices like their smartphones every
month already.
So voice is already a
very big thing in those markets,
and yet the weird thing is that's
almost non-existent in terms of the
media coverage of it, especially in
the Western world.
If you're a global marketer, if
you're a global business, which
increasingly we all are because even
if you're a small mom and pop shop
you can reach customers write them
around the world using e-commerce,
you kind of need to understand that
the behaviours and the way that
people access the Internet and
use their devices is very different
once you start using things
like voice.
Can you give us a few examples of
how people use voice in places like
India or China?
Yeah, so in the Wall Street Journal
a few months back there was this
fantastic article about
a station porter in Delhi.
So you know, he's actually at a
train station, his main job is
carrying cases for people that get
off of trains. But obviously there's
gaps between when the trains arrive,
and he's got some downtime.
So the journalist was speaking to
this chap, and he
said so just show me what you do on
your phone. He takes his smartphone
out. So you know, he's a station
porter, fairly of average guy on
the street. Takes his smartphone
out, goes straight into YouTube, and
then he speaks into the YouTube
engine and says find me this
following song.
And he wants to watch a music video
on his smartphone while he's waiting
for his next customer.
For you and I, that seems relatively
straightforward. It's like something
that we might do as well, perhaps
without using the voice element of
it. But what's really interesting
about that situation is the chap
that was being interviewed, this
porter, he admitted himself that he
wasn't particularly literate.
So he hadn't finished school
didn't really understand how to read
and write most languages, the
language that he spoke at home
didn't even have a keypad that you
could enter into characters on your
smartphone. So, if you think about
all the barriers to him actually
being able to use the Internet,
realistically he shouldn't be doing
that. And yet he's found this
brilliant way of, 'I'm going to use
voice control to find this song',
and sure enough YouTube being the
magic that it is with its algorithm
understands what he's asked in his
local language, finds this piece of
music, and then he's there,
listening to his music within a
matter of seconds.
Now I think, you listen to the
Western media talking about this and
they're like 'oh Amazon, buy me
batteries', and it's just like,
yeah I can see why that is
interesting, but woah, there's so
much more here.
The people that don't speak English
that can now, I mean we talked about
this earlier, the ability to
translate these languages, now
that's automatically opening up new
stuff. Whether it is because
I can't read and write because I've
got sight problems, I might be
blind, or I can't use a keypad
because I've got arthritis, suddenly
voice opens those worlds
up to people as well.
So this is so much more
than just I'm going to shop on my
nice little smart speaker device.
Voice is also quite big in China.
Yeah. Slight understatement there.
So various different aspects of
voice in China, I think one of the
interesting bits if you look at the
way that the average user of
WeChat uses it, they're recording
snippets of audio, I'm recording
a little voice message for you and
I'm sending it, and you're sending
it back. It's almost like a phone
conversation but there's gaps,
because you know, you read it in the
same way you'd read a text message
on WhatsApp, for example.
So that already was a very
obvious demonstration of the fact
the voice was not
just shopping. But why did that
happen specifically on WeChat, what
was the motivation?
If you look at the way that the
Chinese language works, Chinese
as a spoken language is actually
relatively straightforward.
You've got some different tonal
structure in the way you say certain
syllables.
But actually it's a relatively
straightforward language to learn to
speak.
But to type that language
you need a minimum of a thousand
different characters to get through
everyday life.
The standard set that you get taught
in school in China is more than 8000
characters.
That's a pretty big keyboard.
Right, exactly, and obviously
they've developed ways of doing this
where you sort of type in different
syllables and that helps you define
the character you're looking for,
but God it's a faff.
The average Chinese person, you're
not going to spend six days crafting
this perfect sort of thing.
Why not just record exactly
what you wanted to say, which takes
way less time?
So Chinese people went straight into
that whole 'this is a much more
efficient and effective way of
communicating with people'.
And as a result of that they're very
happy speaking into the device, so
when it comes along that they can
search on Baidu using voice as well,
obviously because it's
exactly the same benefit.
So you look at different languages,
whether it's because the keypad
doesn't exist, so a language like
Burmese for example, it's really
difficult to get a decent
functioning keypad on most phones,
you've got to download it separately
when you buy the device because it
doesn't come as standard.
Then you've got places like China
where the keypad exists but it's
just not very easy to use.
So all sorts of places, especially
in Africa and Asia where the
languages are not standardized in
terms of the alphabets, if you like,
that they use, voice becomes a much
bigger deal because it just helps
overcome so many of the different
barriers.
So yeah this isn't just a sort of
fancy new piece of technology and
let's use it because it's cool, for
most people this is addressing an
awful lot of the big barriers that
stop them getting full value from
the Internet, and that's why it's
accelerating.
So do you think there'll be an
uptake of voice in the West?
Oh totally, yeah, yeah.
We spoke a lot about why it's
prevalent in the East.
We spoke about the fact that we've
got things like Amazon and Alexa,
and yes they'll be there but they're
there for a limited set of 'turn on
the TV and tell me what the weather
is like', which in Australia is it's
going to be nice except for, you
know, the day the Scottish guy comes
to do a talk.
Yes. So it's a really good challenge
actually. I completely forgot to dig
into that part. Why is it important
to people in the West? So
increasingly, like I've mentioned,
you've got India, China Indonesia,
already half of the populations
there using the Internet, or using
voice today.
As that overall body
of voice users grows around
the world, and the latest data that
we've got from GlobalWebIndex
suggests that by this time next
year, so the middle of 2020,
most Internet users will use voice
every month. So you've passed the
majority, that's the tipping point,
here we are.
The reason that's important from a
Western perspective is because
of the economies of scale associated
with developing the technologies and
the services that are powered by
these interfaces.
So let's take Amazon, Google,
Facebook as our examples.
As you get to the stage where more
than half of the world's Internet
users use voice as their default
choice,
you've then got a choice as the
developer of those apps.
Do I still have the keyboard and
prioritize that, or do I use the
voice interface and prioritize that?
And the reality is that most people
in the West can type and they can
use voice, whereas most people
that are coming online today where
they've got challenges whether it's
linguistic or literary or whatever
else, they can only use voice.
So because we can do both, guess
what? The easy option is to use
voice as a priority.
If I only want to build one
interface, that's the one I'm going
to focus on because it reaches the
greatest audience.
If you load the Google app up
on your smartphone today you're
presented with that little sort of
search box, right, you know that you
type into it.
Suppose that tomorrow you open that
up and it just has a little
microphone symbol and you had to
press it. Like you'd look at it the
first time and go 'what's this?' And
you'd press it and you'd say 'Ok
Google find me...'  whatever it is
you're looking to.
I'd go 'okay Siri'.
Right, or whatever it may be.
The first couple of times that you
use that, you might be a little bit
like 'ooh this is a little bit
uncomfortable', but if it's the
first option that you're given and
you've got to click through a few
different layers to get back to the
original search box, sooner or later
you just train yourself to use the
microphone.
Sandra, isn't that exactly what you
said when you came back from Taipei
just recently?
Yes, I had a very interesting
experience in a taxi.
We were going from the city centre,
from Taipei 101, to a lovely park
and halfway through it started to
rain and the taxi
driver just enabled the
Google Translate interface on his
iPad, which he had up next to
him and told us 'well it seems it's
raining, would you not rather go to
the museum instead?'.
Obviously translated immediately
into, and spoken in, English to us,
and gave us another phone to
talk back to him.
And for the next 10 minutes on
the drive we had a coherent
conversation where he said 'oh you
know the palace is one of our best
attractions, you might want to see
this and this there', we said 'no
we'll still try the park'.
We had a fluent conversation.
But I was surprised not just by how
easily he used it, but how easily
we took up and use the interface.
It seemed perfectly natural, I have
no idea why we haven't done this
before.
So Simon is very bullish
about the role of voice,
and obviously he thinks that it's
not just Siri, Alexa in
these kinds of smart speakers, which
is how we discuss voice
interfaces in the West, but actually
on the mobile.
And you can see why it's a big deal
in Asian countries.
Most mobile interfaces are
based on the Latin characters
that we use, so you know for
Westerners it's easy to just type a
text message. But for example with
Chinese characters it's much harder
to type so it's much easier to just
use the voice interface to
either send each other voice
messages, and then use translate
on top of that, or indeed
to just ask Google or YouTube
a question and then request the
search results with your voice
rather than, you know, typing.
So to recap, the surprising things
for us in the state of digital
where voice translation and
video that came together in very
interesting ways and with some very
novel insights for us especially in
the West.
So these are the converging trends
that are driving growth on
the Internet,.
And then the next question is what
do people do on the Internet,
given this growth?
What do people actually spend their
time on?
A lot of stuff surprising enough.
So yeah, social media continues to
be one of the biggest sort of
drivers of the time we spend online,
and it's definitely one of the most
appealing things that we do as well.
But there's a huge amount more
stuff.
Let's start with the websites.
I think we should talk about apps
later as well. But if you look at
the websites, so worldwide,
as of the date that we published in
April, the number one most visited
website, surprise surprise is
Google.
Then it's YouTube and Facebook.
And then we get into a few other
ones. So really interesting
stuff in the top ranking.
So the biggest surprise from my
perspective, coming in at number six
is Yahoo.
Right, so most people...
Number six?
Number six worldwide most visited
website, Yahoo.
Craziness.
Yahoo is still very popular in terms
of older folks that have an email
address at yahoo.com, remember
those?
Ah, it's still very popular for...
Yahoo.com.au.
Said with absolute majesty.
People still use it for the weather,
they still go and check stock
valuations, it still does an awful
lot of news stuff.
So much as it's not sexy to talk
about Yahoo anymore, and most of the
marketing communities completely
discounted it, in reality,
in terms of the total traffic that
it gets on the Internet, number six
worldwide. Just behind Wikipedia,
would you believe?
Coming in at number seven, another
massive surprise is Twitter.com,
especially important considering
that most people that use Twitter
use it through the app.
So the really interesting insight
from the Twitter perspective here is
that an awful lot of people are
going to Twitter, not signing in,
just so that they can read the rants
of random politicians around the
world, or keep up to date with
relatively influential people,
whether it's journalists,
celebrities whatever else it may be.
They're not interested in
participating in the conversation,
they just want to know what's being
said. And the funny thing is,
Twitter doesn't stop you from
reading that if you've not signed
in.
In fact, right now,
so as of the latest data that we've
got, there are twice as many
people using Twitter, as
there are people logging in to use
Twitter. So the data that we've got,
roughly 330 million people signing
into Twitter each month, that
includes business accounts as well
as individuals.
But there are close to 700
million unique visitors to
twitter.com every month.
Is this because of the orange
gentleman, or
has this been a, has this been a
trend for...?
Respect to our listeners in the
United States, I shall refrain from
making any political assessments
of this, but yeah exactly.
I think there is the, the impact
of politicians using this,
whether it's, you know, Trump
says an awful lot of stuff on
Twitter before he says it even to
his own team half the time.
It's just fascinating the role
that this platform has taken in
popular culture.
But I think the really important
distinction here is Twitter is no
longer a social medium.
It has a social element to it, but
it's a news platform.
The first motivation for most
users to go to Twitter is to find
out what's going on.
Weirdly, Twitter itself acknowledges
this. It's where you go to find out
what's happening right now, it's
part of their marketing pitch.
And yet for some bizarre reason they
still talk about themselves as a
social platform, no this is a news
platform that allows commenting.
Isn't Twitter an advertising
company?
Oh, it's all sorts of confused.
I wish that Twitter would sort its
business model out, because it's one
of my favourite platforms, it's how
I've built various numbers of
businesses and I've found a lot of
joy through it, but they're very
confused internally.
If anybody at Twitter wants to have
a chat about their business model,
I'd love to have that conversation.
So please, you'll find my contact
details in the shownotes, right?
So number six Yahoo, number seven
Twitter, do you want to have a guess
at what's number eight?
We've already had Wikipedia at 5,
didn't we?
Guess, come on, it's the Internet,
what are people doing online?
Ah, it's not cats.
It's not, it's worse than cats, it's
porn.
So, are we allowed to go there on
this show? Can we talk about adult
content?
Yes.
Absolutely.
We've had smart condoms on the,
um...
On the microphones?
On the microphones.
I'll move slightly away
at this point.
So yeah, Pornhub coming in at number
eight. That is the world's most
visited. I'm not here to advertise
these individual companies, but
here's another really interesting
surprise. Remember this is on the
web, this is websites.
Instagram.com comes in
at number nine, which is weird
because again like Twitter most
people use that within the app.
The rest of the top 20 is
a sort of mishmash of portals
and shopping sites.
So you've got things like Amazon,
obviously, you've got a lot of the
local dominant sites,
so you've got VK, which is
the Russian sort of social platform,
VKontakte.
My pronunciation of that is probably
terrible.
So yeah, you've got a lot of
different things, and the
interesting thing, this is data from
SimilarWeb, by the way.
You've also got data from Alexa,
which confusingly is also Amazon's
data arm, it's not just the voice
assistant that they use, but they
also publish great data about top
websites around the world.
Their classification's slightly
different.
They don't seem to have a lot of the
adult content in their top 20, I
think they've cleansed that out,
shall we say.
So you know, this is depending on
how you classify top 20, the
result differ depending on which one
of the slides in our report you look
at. That's the website stuff.
When you start looking at top apps
though this is where stuff gets
really, really interesting.
So the amount of
downloads.
Let's start with that, we'll talk
about time spent in just a minute.
If you look at downloads,
by far the biggest category
is games, that maybe isn't a
surprise. But the sheer volume,
games are three times bigger
than social networking
downloads, which are the next,
sort of, category after that.
And that's consistent across both
Android and iOS.
The big gaming companies are now
Chinese companies, and that's
amazing.
You're absolutely right, the biggest
manufacturers globally
of games are often Chinese
companies. Now the interesting thing
is when you look at the companies
behind a lot of these big games, a
lot of them are partnerships between
lots of different companies.
So you'll have an American and a
Chinese company collaborating on
the big, big titles, and these games
are huge and they're churning
these things out every month.
I just cannot get my head round the
sheer level of
commitment to developing these
things at the speed that they're
developing them at.
And you look at the quality of the graphics
on these things on your mobile
device, it just blows my mind
how far we've come.
I can still remember playing pong.
Yeah.
It's like, wow, you look at it now
and it's like, yeah, these are
apparently both video games and yet
they're completely universes apart.
So Tencent, one of the bigger
companies, so obviously Tencent's
behind WeChat as well.
But it is also one of the companies
behind PUBG, PUBG whatever
you want to call it.
I'll embarrass myself by getting
that wrong.
But yeah, the gaming ecosystem
is one that once again marketers
don't understand well enough.
And that is embarrassing as an
industry, considering just how
important it is in our audiences
lives.
So, just to give you some context
here, like I said already the app
categories on both
iPhone and Android
games dominate massively the
biggest category by a long way.
If you look at the number of people
watching other people playing
games on the Internet, which is a
massive thing, you've got things
like Twitch, it's a platform where I
can go and watch you playing a game.
Yep.
A billion people every
month around the world are watching
other people playing games, that
just give you a sense of the scale
of this.
There's only six social media apps
in the world that have six billion
total active users.
And then all of a sudden you've got
all these people watching other
people playing games.
It just blows my mind how important
gaming is, this is a massive
opportunity.
Esports, 400 million people every
month watching these tournaments of
people playing, in the way at the
moment that you've got sports like
the World Cup for soccer, or
whatever else it may be.
Sure enough, three billion people
tuned into the World Cup.
But if you look at American sports,
you've got Major League Baseball
that reaches 200 million people.
And yet you've got 400 million
people watching an esports
tournament.
StarCraft tournaments.
Right! Random games that most of the
people that are making these
statements have never heard of.
The amount of money that goes into
Major League Baseball which is only
relevant to three countries in the
world, realistically, we're talking
America, Japan, Korea.
The rest of the world really does
not care.
And yet the amount of money that
goes into that is incredible.
Then you look at the gaming
opportunity, and you realize that
that touches people in every corner
of the world, and a lot of these are
relatively affluent consumers.
You know, they may be younger but
they spend a lot of money on this
stuff. The opportunity is not just
'I'm going to sell you a new gaming
mouse'. This is much bigger.
Also the prizes in these games if
you look at what prizes are getting
paid out for a tennis tournament
where it's a couple of million
dollars, and Fortnite is paying out
100 million dollars.
So I think the business community in
general hasn't got its head around
gaming and I think It's been
massively inflated in some
instances because we've got these
crazy valuations of specific
elements of the industry.
But step away from the business bit
for a moment and look at the
audience size of things.
It's just so much opportunity to
engage people around things that
they care about.
The opportunity here is not to
advertise and interrupt, just so
that we're clear. The opportunity
here is to engage people on their
terms, around things that they care
about. But nonetheless, gaming,
probably the biggest
underappreciated opportunity on the
Internet today.
Other than games, what do people
download?
Just about everything in life has
an app, the Apple advertising
of 'there's an app for that' was
weirdly prophetic.
It's actually come true.
You've got apps now that track your
sleep, it just blows my mind that
I'm asleep and my app's doing stuff
in the background.
When you look at the top categories,
the obvious contenders, so we talked
about games, social media is
obviously big, you've got photos and
videos and all these great things.
I think some of the ones that
interest me most, things that track
your health, and there's obviously a
privacy concern issue around some of
that, but when you start looking at
apps that help people with
conditions like diabetes, to track
that condition and to live a
healthier life.
That is very clear how that's
adding value.
But when we, let, let's use value as
a really interesting reference
point. The app that
generated the greatest amount
of revenue, from an App Store
perspective, in Q1,
was Tinder, globally.
Now previous to that it's always
been Netflix, one of the reasons why
Netflix is not the number one
anymore is that Netflix has stopped
offering subscriptions within the
App Store. You have to do it
directly with Netflix now, so
obviously they're trying to protect...
That's that whole battle between
Netflix and Apple about the...
Yeah, and also the not losing 30
percent of the revenue to the App
Store, but let's park that one.
But the fact that Tinder,
globally, has become such
a big revenue generator, and
almost all of that revenue is coming
from SuperSwipes.
I do not use Tinder, so I'm not
an expert on this, but I've been
reading up into this.
So SuperSwipes.
Of course you don't.
Of course not.
The weirdness is that my wife and I
work together we have to study this
stuff together and both of us are
sort of giving each other the
side-eye when we talk about Tinder.
But so Tinder allows you to buy a
SuperSwipe for a dollar a day.
So the way it normally works is
if both of you swipe right
separately on each other then you
get notified.
But suppose I swipe right on you,
you will only know if I swipe right
on you if you swipe right on me as
well, if I buy a SuperSwipe, you
know before that I've swiped
on you. So you'll know in advance
that I've swiped.
You can buy these for a dollar a
day, you can only do one a day, but
you can do one every day.
So 365 dollar opportunities
every year for every user for Tinder
right the way around the world.
It seems like an awful lot of people
are buying these, because if you're
getting to the top of the revenue
generated in the App Store, that's
an awful lot of money, that is
against all sorts of other very
high value..
This could be the Western loneliness
epidemic.
So overall there's a few surprises
here in what Simon has to say.
I, for one, didn't know that Yahoo
was still a thing, so that's
interesting.
That makes two of us.
Yeah, exactly.
I mean we knew that gaming
is a thing, and that it's big and it
drives apps.
But it is quite extraordinary
the money that is now involved
in esports.
And while I remember an article that
said it might not be as big as
it's often discussed in terms of
user number, Simon certainly has
good data here, and
it is certainly something that has
grown very much outside
of the eye of the mainstream media.
And it is remarkable how
some of these esports events attract
more visitors than traditional
sports events.
And also the money involved is quite
extraordinary.
And probably just as surprising
is the size of Tinder,
and the way in which they monetise
Tinder, the fact that it's the
number one app in the App Store,
and that they have found a way to
make money, actually very good
money, out of people dating.
By gamifying dating, pretty
much.
So there's a lot of insights that
Simon finds in his data.
Which is why there's a part two
to this, so stay tuned for
next week.
We're discussing the
adult entertainment industry.
But that's all we have time for this
week.
See you soon.
On the Future..
Next week.
This week?
Yes, but next week.
On The Future This Week.
Next week. Thanks for listening.
Thanks for listening.
This was The Future, This Week made
possible by the Sydney Business
Insights Team and members of the
Digital Disruption Research Group.
And every week, right here with us,
our sound editor Megan Wedge who
makes us sound good, and keeps us
honest. Our theme music was composed
and played live on a set of garden
hoses by Linsey Pollak.
You can subscribe to this podcast on
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If you have any news that you want
us to discuss, please send them to
sbi.sydney.edu.au.
Well, clearly there is something
missing from the podcast.
We were hoping he was going to say
it.
Well he's a Scotsman.
Yes he used the f-word,
but he didn't say shit.
No no, he swears a lot but...
No bullshit.
No, he did not say shit.
