The Western Internet Is Monopolistic
At the Last Futurist, we’ve been writing how the internet goes from a text based web to a video centric consumer experience for years. This, too, is yet another meta trend the pandemic accelerated. The Silicon Valley based internet is destined to be replaced eventually by a Chinese based internet that’s more innovative in a more diverse ecosystem of apps and convenience.
However, until then, there’s a new kind of media that’s disrupting the old. As News publications struggle to survive, the entertainment and ads based video-centric medium is the YouTube, Netflix and Roku internet. Streaming and the pivot to video content means YouTube is indeed a media juggernaut. As Apple gets into Ads and ByteDance scales into Ads and E-commerce, it’s a very different world as well. Along with Disney’s incredible success in streaming in 2020.
The Western Internet is degenerating the ecosystem of eyeballs for western audiences. The winner takes all of this movement is initially Google’s YouTube. YouTube is on pace to bring in annual revenue comparable to Netflix’s. Alphabet’s latest earnings shows a world of a few monopolies taking over the entire internet with YouTube’s astounding year-over-year growth. YouTube ad revenue grew nearly 50% year over year.
The Google-owned video platform is seeing a rise in more traditional television advertisers. In 2006, Google bought YouTube for $1.65 billion. If that wasn’t a monopolistic acquisition, I’m not sure what is. Whereas in China they have dozens of streaming and short-video apps, we only have a few.
Google parent company Alphabet said YouTube brought in $6.01 billion in advertising revenue during the quarter — up from $4 billion from a year ago, for a growth rate of 49%. Roku will certainly become another disrupter along with Amazon and Apple to the future of Ads. While Snapchat has matured, it’s nothing like what ByteDance is becoming.
The majority of digital innovation happening in 2021 is actually occurring in China. YouTube and Netflix are just what you get in a climate of Western monopolies eating up our attention in a manipulated ecosystem of the old internet — the dumb digital advertising based internet of Silicon Valley, the internet of greed and deceit.
Don’t even get me started on Facebook’s legacy. Since real innovation always disrupts aging monopolies in the end, digital ads at the center of America’s internet will be its downfall.
While Netflix’s growth has been shocking to some, YouTube’s growth is an inevitability of America’s love of toxic monopolies. If its current growth trajectory continues, YouTube will book between $29 billion and $30 billion in revenue this year. Netflix is expected to report $29.7 billion in revenue for 2021, according to an average of estimates from analysts polled by Refinitiv.
The problem is of course that sprawling ecosystems of greed like Google and Facebook have done more harm than good to society. They have disrupted media to the point where it’s hard to trust what you see or find online. That may be good for Ad dollars with lazy algorithms doing the heavy lifting, but it’s not good for the user experience, finding quality experiences online or truly providing citizens with uplifting experiences of value as we get even more addicted to screens. Netflix has actually failed hard to drive growth during the pandemic.
In a world of western monopolies, they are losing what it means to be innovative and they are stunting the ecosystems of technology, making startups in their respective industries no longer exist. This is allowing China to drive real consumer and apps innovation in digital experiences and ultimately to be the future of the global internet. It’s not by chance that Chinese IPOs (who are startups) are going to dominate even our stock market.
During the pandemic, YouTube Ads, LinkedIn Ads, Amazon’s assault on Ads and Apple’s entry into Ads show the legacy of the American internet: Advertisements. China’s internet of big data collection, digital currency and more diverse ecosystems of apps actually has many advantages that eventually also allows China to prosper economically and to fuel artificial intelligence faster and better than the American internet we must put up with today.
Ads make companies like Google, Facebook, Amazon and even Microsoft lazy since they are so profitable and cheat the entire system out of real competition. What we are realizing today in 2021 is that Ads literally resulted in the decline of Silicon Valley.
The lack of antitrust regulation in the U.S. basically costs them the AI-race before it’s really even begun. This is hard to understand for someone that doesn’t look in the scope of decades. An internet of Big Data (China) becomes just so much superior to an internet of Ads (America). Sadly nobody else really gets a say on the future of the global internet. It’s really in the 2025 to 2035 decade when this becomes more noticeable and true.
It doesn’t really matter how incredible this week’s Earnings look for Google, Microsoft, Tesla and so forth. Because in the big picture, the American obsession with monopolies has killed their actual ability to innovate. Amazon failing at gaming, Google failing at most of all that it tries and Facebook unable to keep pace with social media trends is proof of this.
Advertising revenue makes it appear as if the American companies are leading the world into the 21st century, until they don’t work anymore in the same way. Apple disrupting Facebook is a moment. LinkedIn leaning even more into the Ads businesses is the end of its failed community. The Silicon Valley model is toxic and too reliant on algorithms to create good consumer user experiences.
At the Last Futurist, 2021 is the point where we realize we have to turn our attention to what China is doing with the future. Because we are more and more convinced China is building the future of the internet. The YouTube-Netflix internet is limited, just as our pandemic attention is saturated with those limitations.
The Silicon Valley monopolies are stale, and their algorithms feel old and their communities redundant. They disrupt media and stunt startups from even forming in North America and Europe. Money and growth at all costs aren’t the end game of the future of the internet. Silicon Valley doesn’t even understand what’s on the horizon, because all they see is Ads-growth. It’s their digital dopamine feedback loop to corporate earnings. Greed and success do corrupt.
American monopolies shouldn’t own the internet. Luckily they will be powerless to stop the fresh innovation out of the East. There are real signs of what this looks like for the attention of younger and nimbler minds. Entire companies dedicated to GenZ and fresh takes on apps and digital experiences. Here are some of the signs on the horizon:
- ByteDance (AI, Gaming, Media experiences and E-commerce)
- China’s digital currency
- Vibrant ecosystem of startups
- The YouTube of China, namely Bilibili