IBM’s take on this week in news

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Aug 18, 2017 · 6 min read

This week in brief

• Facebook’s next big bet: a video platform
• Global market for smart homes will keep growing
• Can roads that pay for themselves help the infrastructure crisis?
• Ticketmaster and Amazon battle may not happen
• The happiest countries pay high taxes

Numbers of the week

Can Facebook’s new video platform challenge YouTube?

With the launch of Watch, its platform for shows, Facebook hopes to become the next big platform for viral social videos. Facebook describes Watch as a “home to a wide range of shows, from reality to comedy to live sports,” and a place for content creators and publishers to make episodic video series that “connect with their fans and community.”

So how can Watch not only succeed, but also dethrone YouTube and other competitors? First, Facebook believes that interacting with communities and seeing people’s comments and reactions to a video are often as important as watching the video itself — and that a seamless blend of both will foster an engaging and complete experience.

Facebook’s betting that if a friend shares a video, you’re more likely to watch and interact. Watch is personalized to help you discover new shows, organized around what your friends and communities are watching. YouTube can’t match this mix of video content and intimate interactions with friends, family, and communities.

Second, Facebook offers some positive numbers for publishers, who can access Facebook’s two billion monthly users to extend their reach, and receive 55% of the proceeds from ad breaks in the videos. According to the Financial Times, the platform can “help publishers escape the tyranny of the news feed… Now users will be able to add a series to their Watch list, so it is shown consistently.”

And perhaps what’s most interesting: Facebook is perfectly primed to reap the benefits of years of technological, creative, and production advancements in video, as well as audience targeting and content personalization. Today, everyone — from brands and agencies to teens and small production companies — can, and do, create high quality video content.

THE ANGLE:

• With Watch, Facebook hopes to further expand the amount of time people spend in the app — and the number of higher priced video ads it can serve them.
• In 2018, mobile video ad spending is expected to grow 49% to nearly $18 billion — because people around the world will watch 25% more video on phones and tablets next year.
• Video will make up 82% of all internet traffic by 2021, up from 73% in 2016. Facebook says that 90% of the social network’s content will be video-based by 2018.
• Consumers seek personalized, convenient, and consistent experiences across multiple channels and devices. However, only ~30% of media and entertainment industry executives surveyed by IBM said they are effectively leveraging customer profile data to contextualize customer experiences or provide personalized service and proactive recommendations.
• Artificial intelligence can generate metadata from video, and help companies deliver customized content to viewers.

Global market for smart homes likely to reach $137.9 billion by 2023

According to a report by Research and Reports, the global market for smart homes was valued at US$54.97 billion in 2016, and is likely to grow 13.61% between 2017 and 2023. Significant advancements in the IoT market, increasing needs for convenience, safety and security, and rising demand for energy saving and low carbon emission-oriented solutions are some of the major factors driving the growth of the smart home market.

The true power of IoT is realized when we connect and manage all these devices and pull data across not just our homes, but also commercial buildings, streets, cars, etc. Companies will need to think about the infrastructure they build around IoT devices to ensure they’re not creating islands of data or unconnected sensors. Considerations will include capturing, managing, and acting upon the information they receive; insights gleaned from massive amounts of data can become very powerful predictors for all kinds of behavior, and present new opportunities across ecosystems. Artificial intelligence as IoT’s foundation will continue to learn so that homes can become more energy efficient, safer, and precisely attuned to how we live our lives.

Roads that pay for themselves? Say hello to smart pavement.

A start-up called Integrated Roadways wants to embed technology in roads, and is developing high-tech roads for the future. Connectivity backbones could help telecommunications firms deploy 5G networks, or give cities a place to put fiber-optic cable and spread high-speed Internet. Sensors could gather data on vehicle counts, speeds, and weights, thus giving cities better access to information. In the future, other built-in hardware could support the communications needs of connected and self-driving vehicles. Electromagnetic coils could, for example, charge electric vehicles’ batteries as they drive.

All that tech is valuable enough to be sold to various buyers, boosting transportation budgets to help pay for maintenance.

A third of major urban roads in the US are in poor condition and in dire need of improvement, according to a 2016 report by Trip. Main commuter and commerce routes carry 70% of the approximately 3.1 trillion miles driven annually in America. Poorly maintained roads cost the individual driver an average of $523 annually due to the costs associated with driving on roads that need repairs.

Taxes have not kept up with inflation, resulting in a huge maintenance backlog for infrastructure update payments. The US Department of Transportation estimates that it will take $836 billion just to improve the highways, Interstate system, and bridges across the US. And as the infrastructure continues to deteriorate without repair, the problem will continue to grow more expensive.

While there’s been a back and forth about using taxes and tolls to pay for roads, governments can use technology and real data to evaluate and distribute where funding should go. According to the IBM blog, Three ways IoT will change your commute for the better: “Governments are also beginning to transform their roads by using IoT sensors combined with advanced analytics to optimize road management. The Sao Paolo State Transport Agency uses IoT to monitor traffic in real-time, ensure road conditions are safe and efficient, and then prioritize maintenance based on data to not only reduce costs but also to reduce the impact of work on traffic.”

Amazon’s battle with Ticketmaster may be derailed by data

It may have generated a lot of buzz in the past week, but the Amazon-Ticketmaster competition may fizzle before it even starts. While consumers have long complained that Ticketmaster’s ticket fees are too high, venue owners love that Ticketmaster often pays them for the right to sell tickets and manage their box office.

But Amazon has so far refused to budge on sharing its data, which would enable owners to tailor their marketing, audience targeting, and social media campaigns — and truly understand their audience to be able to book the right acts in the right places. As companies have frequently learned and will continue to learn, whoever owns the data owns the customer experience. Accessing the insights buried in this data can make all the difference and make or break a company.

Don’t underestimate Amazon, though. With Ticketmaster generating $1.6bn (£1.2bn) in revenue from initial ticket event sales in 2016, according to estimates by research firm BTIG, the industry is a moneymaker.

The happiest countries in the world also pay a lot in taxes

What makes you happy? Eating chocolate? Watching a great movie? Paying taxes? Higher taxes typically mean that governments have stronger funding sources for a greater ability to deliver better services. If the happiest countries pay the highest taxes, can this imply that better government services drive their citizens’ happiness? A recent report indicates citizen satisfaction is related to what they get for their tax dollars. That’s a key distinction, as nobody is happy paying taxes if the government services they receive are poor.

According to the United Nations’ latest World Happiness Report, as covered by CBS News, the top 10 happiest countries typically pay the highest in taxes, and also have “strong social foundations.” In exchange for their taxes, citizens receive social benefits like universal health care, access to education, and subsidized parental leave.

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