News Analysis
Technology: The Hysteria of What's Next
By Swanni
Washington, D.C.
(May 1, 2012)
--
"This company (TiVo) is going to change the world of TV forever.
Their product is going to be the hottest launch in history, and
it’s starting this year." --
Josh Bernoff, an analyst at Forrester
Research,
October 1, 1999.
The DVR will "be the end of
network television." -- Bernoff again,
in The New York Times Magazine in July 1999. 10 percent of AOL's subscribers
will buy the new AOL TV set-top within two years; it will add
$300 million in new subscription, ad, and e-commerce revenues
and be the most successful product in Interactive TV history. --
Then Wall Street analyst Henry M. Blodgetin Business Week, May 2000.
"Analysts think one product in particular will stand out (at the
2002 Consumer Electronics Show) -- the Moxi Media Center." --
Associated Press, Jan. 2002.
"If it works, they (Moxi) will own the world." - Bernoff
again in the AP article.
"There's nothing else on the drawing board that even comes close
(to Moxi)." - analyst Richard Doherty in the AP article. Today:
* TiVo today has slightly more than two million subscribers and
is struggling to survive.
* The DVR has not only NOT killed network television, it's
improved it. Networks are using DVR viewing to bump up
advertising rates.
* AOL TV has long gone out of business.
* Moxi has discontinued its retail business after years of
dismal sales and multiple owners. Its new owner says its program
guide service will likely end next year.
Over the years, if you listen to most tech journalists and
analysts, you would think that every new product will soon
change almost everything. Writing in boastful articles and
pricey forecasts, they declare that the new gizmo will be in
everyone's home before you know it. (There are dozens of
examples in addition to the ones listed above in italics.)
But the sad truth is that the analysts and journalists are
almost always wrong. The new product may eventually make its way
into your living room, purse or gym bag, but it usually takes
years and years before it happens. And in many cases, it never
happens. The product or technology goes bust because consumers
simply didn't want it.
So, why does the tech intelligentsia get so worked up over
seemingly every new technology that comes roaring out of Silicon
Valley?
I like to call it, 'The Hysteria of What's Next.'
The tech journalists and analysts live in an echo chamber. They
work and converse with people like themselves, people who love
new technology and are highly susceptible to the idea that every
new product could be the Next Big Thing.
So when a new product is launched -- and it gets the Next Big
Thing marketing push from its manufacturer or manufacturers --
the journalists and analysts literally fall victim to a form of
mass hysteria. There's a rush to be the first to say that the
new product or technology will change the world.
Why the rush? Because if you are among the first to issue a Next
Big Thing declaration, your standing in the tech community rises
and, perhaps, so does your salary and bonus. You're more likely
to be quoted in articles on the subject or appear on important
industry TV shows on networks such as CNBC, Bloomberg and the
Fox Business Channel.
(Now you might ask, why can't the journalists and analysts be
the first to say the product will fail? Won't that get as much
attention from the media and others? No, it won't. The media
loves the 'Next Big Thing' angle and will devote considerable
ink and air time to anything with that label. Products dubbed
likely failures are ignored. Plus, don't forget, the journalists
and analysts are hard-wired to think that the new product will
succeed because they probably love it themselves.)
Once the first group of influential thinkers declare something
as the Next Big Thing, the hysteria doesn't stop there. In fact,
it gets more extreme. More and more analysts and journalists
chime in because they don't want to look like they are behind
the curve. And soon, nearly every tekkie is proclaiming that
such-and-such product is going to be a huge hit.
___________________________________________________________________________
The irony is that the average consumer is blissfully unaware of
this process and does not fall victim to it. When a new product
is launched, he makes up his own mind about whether he likes it
and/or finds it useful. If the new product is lacking (3D TVs)
it stays on the shelf. If it's truly the Next Big Thing (iPhone,
iPad), people line up around the block to buy it.
In today's environment, you see the hysteria influencing opinion
on such new products or services as video streaming, 4K TVs,
watching TV on tablets and the TV Everywhere movement. The
journalists and analysts write stories and forecasts suggesting
that most people are interested in these products and will soon
embrace them.
But, once again, they will be wrong. Sure, some of the products
will succeed, but for every overnight success like the iPad,
dozens of the new gadgets will never succeed or take years to
reach a mass audience. And lost in the hysteria over these new
products is the reality that some old technologies like DVDs are
still used by the majority of Americans.
So, the next time you hear someone say a new product will be,
The Next Big Thing, take a deep breath and tell yourself that it
probably won't.
Postscript: I have certainly made my
share of wrong predictions in the past, but you won't catch me
overhyping a new product or technology. I try to analyze each
product with a sober head and heart, always remembering that
most Americans are confused by new technology. Just
because I like a new product doesn't mean that everyone will.
More analysts need to heed that advice.
