The digital era of fragmentation
The world, or at least the industry, tends to swing between two poles. It seems that we are seeing a shift away from the direction of the past 10–20 years.
Those poles are between fragmentation and centralisation, globalisation and localisation. The past 10–20 years have been largely characterised by centralisation and globalisation.
An initial burst of innovation aroundm the earlier days of digital saw an explosion of innovators and smallerm companies. From the early explosion of the dotcom-bubble, to the Silicon Valley start-up culture that saw the birth of a vast array of new technologies and services.
But since then, we have been on a journey of centralisation. Big companies have bought smaller companies. The ‘winner-takes-all’ nature of The Network Effect has meant that the more connected, the bigger, the more feature heavy something is, the better.
Facebook had an insurmountable lead. Google could flex its muscles as the dominant force in search (and many other things). Amazon continued to eat everything.
The main hope of smaller technologies and innovators was to grow to be enough of a threat, or inspiration, that they get bought by an incumbent. We saw this with many emerging new technologies – Facebook buys Instagram and Google buys Nest are quick-search examples of this.
Instead of all of our entertainment budget going to a couple of big companies, it is spread acros creators we love across various platforms
At a certain point, size wins out. However, the network effect also has a downside. One-size-fitsall experiences, bloated apps, monopolies, a lack of innovation. The nimble innovators have become complacent incumbents. Size brings risk and scrutiny.
Enter the era of fragmentation. This lack of innovation and scrutiny is bringing about a new shift. We are seeing more and more fragmentation of audiences and experiences. Rather than living our lives out on one open feed social media network, doing all our shopping in Amazon and watching all our content through one streaming platform, we are seeing a proliferation and diversification of platforms and places.
This patchwork quilt of tools and services mean jumping from Twitch, to TikTok, to Discord, to WhatsApp. It means rather than channel hopping, we are now platform hopping trying to find something to watch. We are starting to buy direct from businesses, cutting out marketplaces. Instead of all of our entertainment budget going to a couple of big companies, it is spread across creators we love across various platforms.
The good thing about this, is that we could be seeing more innovation and experimentation. We could get a more equitable and balanced distribution of wealth and control for creators and more rewarding experience for consumers.
The notion of fragmentation for MTC can be translated as simply thinking lifestyle. It’s no longer just a matter of selling consumers airtime but going on a journey with subscribers. Hopping from platform to platform to live out various digital experiences. It means various (fragmented) offerings that are specialised in understanding and meeting the demands of subscribers.