Next year is happening. Here’s what to look forward to.
Get ready for something … interesting in 2017. The Donald Trump presidency, launching Jan. 20, has the potential to change the global technology and media industries in unexpected ways, from mergers and tax holidays to hacker wars and censorship.
Here’s what the Recode editors and reporters — and special guest Bill Gates, because we already had him on the phone — are looking forward to in the new year.
Media in the Trump era is already getting messy
The internet is a great way to get news, because it lets you pick and choose the stories you care about and the outlets you trust. The internet is a terrible way to get news, because it lets you pick and choose the stories you care about and the outlets you trust.
The narrowcasting of news, and media in general, has been going on for decades: Three TV channels turned into hundreds, which turned into an unlimited number of digital publishers.
What’s new now is the rise of Facebook as a global news distributor, designed to make sure you only see stuff you want to see, and the rise of Donald Trump, a president who either doesn’t know the difference between fact and fiction or doesn’t care.
Combine those two factors and we’re looking at a world where large swaths of the American public (and the rest of the world) will have very bad information about crucial news, because they’ve created their own very bad newspaper. It’s a problem technology has helped create, but it’s hard to see how technology will fix it.
— Peter Kafka
Snapchat is going public
Snap — parent company to Snapchat — may be selling goofy video sunglasses out of vending machines, but the company’s business is growing up quickly. Snap has confidentially filed IPO paperwork with the U.S. Securities and Exchange Commission, and could go public as early as March 2017.
It’s an IPO that the tech industry — especially other overgrown startups with IPO ambitions, like Uber and Airbnb — will be watching closely. A solid debut on the public markets could mean more tech companies will follow in Snap’s footsteps in 2017. A flop could have the opposite outcome.
It’ll be interesting to pull back the curtain a bit on Snapchat’s business. Founder/CEO Evan Spiegel is notoriously tight-lipped and secretive about his company. We’ll know a lot more when Snap reveals its stats and starts reporting quarterly earnings.
So, what will the IPO look like? Snap is targeting a valuation of $20 billion to $25 billion, a relatively modest jump from its latest valuation, which was near $17 billion. Sources say Snapchat is on pace to beat its $350 million revenue goal this year, and some investors believe it will be a $1 billion business in 2017. That’s a big jump for Snapchat, one Wall Street will be watching closely.
— Kurt Wagner
Uber’s inevitable IPO will widen its focus
Expect to see Uber investing more in other businesses beyond its core on-demand transportation service. It has already doubled down on its delivery service, building its own app and expanding outside the U.S. And it has now devoted resources to all kinds of self-driving vehicles including cars and trucks, and even flying cars as well as the business of on-demand freight transportation.
They’re all expensive, ambitious endeavors, but they’re also necessary as Uber begins to ponder the prospect of going public. That’s because ride-hail on its own is an incredibly competitive business where market share can be easily gamed by things like subsidies.
But Uber will have to do more than simply lay the groundwork for its new services — it’ll have to show actual progress. We’re seeing some of that happen already. In a matter of weeks, the company has expanded its self-driving pilot from one to two markets and its self-driving truck went on a beer run. Expect to see significant strides.
— Johana Bhuiyan
A million drones will fly in U.S. skies
The U.S. Federal Aviation Administration was expected to open the policy-making process to determine how drones will be allowed to fly over cities and other densely populated areas by the end of this year, but clearly that hasn’t happened.
This decision — as well as others that will outline how drones will be permitted to operate beyond a pilot’s line of sight — will be critical to shaping how soon and how exactly the technology will be used in broader commercial operations, such as package delivery. You can expect big players like Amazon, UPS, Alphabet and DJI to continue to be very involved in this regulatory process.
Even though drone rules are still in the making, that isn’t stopping hobbyists and professionals from sending flying cameras into the air. As of August, the FAA reported that more than half a million drones were registered in the U.S. (Registration only opened at the end of 2015.) At that rate, by next summer, there could be more than a million.
— April Glaser
Amazon’s Echo and Alexa must defend their lead
For two years running, the Amazon Echo speaker and its accompanying Alexa voice assistant have been the surprise darlings of the tech world. Their success has underscored the continued disappointment of Apple’s Siri while sending a message to Google that the future of search may not be firmly in its grasp.
Now, however, the Echo and Alexa are being challenged. In November, Google launched Home — its answer to Echo — and undercut Amazon by $50. Apple and Microsoft are both reportedly working on competing services, too.
One big advantage Amazon has is the more than 6,000 “skills” that developers have already built on top of Alexa. The problem is that it’s still too hard and too time-consuming to find the right skills for you. (Amazon’s mediocre Alexa app doesn’t help much.) If Amazon is going to maintain its unlikely lead in this category in 2017, it’s going to have to solve this discovery problem. The competition is coming.
— Jason Del Rey
Apple’s iPhone is turning 10 years old
With an all-glass display, breakthrough software sophistication and multi-touch user interface, it instantly became the device that competitors needed to copy. Since then, Apple has sold more than a billion iPhones, and it propelled the company to become the biggest in the world by market value.
What’s next? You’re probably going to hear speculation about some sort of special tenth-anniversary iPhone. But if one exists, it’s probably nothing as surprising as that first one, which not only changed the way phones looked and worked, but the power structure of the mobile industry.
Yes, future iPhones will obviously get slicker and more powerful — surely the 2017 update will be nicer in many ways than the 2016 version. But there will only ever be one iPhone moment.
— Dan Frommer
Get ready for more media deals
It’ll be a merger soup next year. Time Warner will complete its sale to AT&T, potentially igniting other media deals. To start, since CBS will no longer tie up with Viacom, the broadcaster could still seek a merger elsewhere. Disney could spin off ESPN and ABC, and a tech or telecom company could buy any of these TV businesses.
Why all the merger fuss? Two big reasons:
TV companies have relied too heavily on lucrative license fees from the distributors (AT&T and Comcast* and Verizon), and the next time they discuss renewals, the distributors will insist on lower rates. Why? Fewer people are paying for traditional TV, hence the full-fledged emergence of web TV (see Peter below).
Second, sports rights for all the major pro leagues — the one thing that (mostly) keeps people glued to traditional broadcasts — will start coming up for grabs in 2021. Google, Amazon and Facebook will likely make bids in the next cycle, in addition to the big TV networks, which means prices could go up more than usual.
Simply put: CBS and Time Warner and Fox and even ESPN will have a much harder time winning those deals and thus growing their viewership (a.k.a., hello, the internet.) Tying up with other media companies could deepen pockets and add leverage. But also look for a tech giant like Amazon or a telecom provider like Verizon to consider making a bid for a media player.
— Edmund Lee
Web TV is here, for real. Now what?
For years, buying TV over the internet seemed like a pipe dream. But now it’s no big deal. Sling, Sony and AT&T/DirecTV have already launched digital TV subscription services in the U.S., and next year Hulu will join them. Google/YouTube will likely join the party in 2017 too, and Amazon is also kicking around the idea.
Next question: Will customers care? Digital pay TV is a bit different from regular pay TV: It’s easier to get your shows on your phone, for instance, and you generally pay less, for a smaller selection of TV channels. But it’s not significantly different, by design: The TV guys are still pushing bundles of their networks, because that’s what’s best for them. So far, the design and user experience hasn’t been anything to write home about, either.
Still, by the end of next year you should have at least a half-dozen different ways to get TV. A couple of years ago, you had two or three, max. More choice can’t be a bad thing.
— Peter Kafka
Lyft will have to figure out if it needs to sell itself
Uber’s No. 2 in the U.S. has made significant gains in marketshare and ridership in the past year — and it still has $1.4 billion in the bank — but has yet to catch up.
After General Motors expressed interest in potentially acquiring the company this year, Lyft tried to solicit competing offers at $9 billion. But no bids materialized. And now that Uber has unloaded its China business and begins preparing — however slowly — for an IPO, it’s not just free, but exceptionally motivated to focus on winning the U.S. market.
That tells us two things: First, Lyft’s best bet may be to sell, period. Second, the company may have few options for buyers outside of G.M.
Sources close to the company insist that Lyft is expecting to reach profitability, but there’s no signal that it’ll catch up to Uber, which is pushing ahead in self-driving technology and other new businesses. This all puts increased pressure on Lyft to simply figure out what it’s going to do.
— Johana Bhuiyan
Facebook will try to fix its fake news problem
It turns out fake news has real consequences — and even though Facebook CEO Mark Zuckerberg doesn’t want to admit his massive news distributor may have influenced the U.S. election, he’s still scrambling to find a way to purify your News Feed from what he calls “misinformation.”
There are basically two questions here: Can Facebook weed out fake news? And more importantly, how badly does it want to?
The answer to the first question is yes, Facebook could probably fix this problem. It has some of the smartest machine-learning experts in the world, so building an algorithm to weed out bad stuff seems like a real possibly. Its own head of artificial intelligence believes the tech can be built, it just hasn’t been (or at least it’s not being used). The company is already using third-party fact-checkers to try and weed out fake stories, but having humans fact-check the internet doesn’t feel scalable.
The better question is how aggressive Facebook will be in removing fake news. For now, it will label stories as “disputed” if fact-checkers find inaccuracies, but they won’t be taken down.
As Zuckerberg wrote post-election: “Identifying the ‘truth’ is complicated … I am confident we can find ways for our community to tell us what content is most meaningful, but I believe we must be extremely cautious about becoming arbiters of truth ourselves.”
Facebook has long argued that it is an unbiased platform that shows you things based on computer models. It’s not a media company that makes editorial decisions, and deciding what it true and what is false is very much an editorial job.
— Kurt Wagner
20 questions we’ll be following:
Will Apple’s AirPods be cool? Will Twitter be sold? (Will @jack pick one job? Will the new head of product last the year? Will Marc @pmarca Andreessen tweet again?) Who’s speaking at Code Conference? Will Magic Leap launch? Is Jony Ive going to retire? Will VICE be bought? Can Zuck charm China? When is inflight Wi-Fi going to stop sucking? Which robot will steal my job? Remember wearables? What does Peter Thiel want? Will the Cubs win the World Series again? Will Trump go after Bezos? Will any of Alphabet’s “other bets” hit? Will the first must-watch VR thing happen? Can anyone stop Snapchat? Is everything going to be okay?
— Dan Frommer
* Comcast’s NBCUniversal is a minority investor in Vox Media, which owns Recode.