Progress Partners

Investment Banking

Progress Partners is a boutique investment firm based in Boston and New York City providing financial advisory services to companies in media, marketing, advertising, and software.

Progress Perspective: What's to Come in 2017?

An op-ed by Davis Rosborough, Progress Partners

What’s to come? More saying than knowing.

Much depends on predictability; and, much moves on the ability to see around corners. The eruption of this new administration’s first couple of weeks has sent the predicators back to rethink what’s possible.

Meantime, the organs of the Digital ecosystem are reaching a maturation point after years of getting to know itself. The growing pains have begun to taper, but most sense much digestion, creation and dissolution lies ahead. Depending on which Observer, this will be healthy or harmful – but no mistake, it will be.

We are bearing witness to mega marriages of Content & Distribution: most notably AT&T (NYSE:T), the largest Pay-TV operator, second largest wireless data provider, and third largest broadband provider is amidst a betrothal to Time Warner Inc. (TWX), one of largest producers of premium video content on the planet. This make sense if you consider the roll out of 5G broadband network — AT&T is poised to push as much video through the pipes as it can.

With the ubiquity of delivery, Pay-TV itself will shift to find consumers on every screen, hedging against cable subscriber attrition (which has still been slow to come about), but behavior of the youngest generation indicates the notion that TV is being redefined entirely, rather than delivery modality (set top box, IP TV, or broadband), we will see that what is defined as premium will define these blurring distinctions. The acronym OTT has become somewhat of a crutch phrase, but one that we will lean on less as ATSC 3.0 deploys (in S. Korea for 2018 Winter Olympics, then in the States 12-24 months later). Instead of the concept that ‘Internet Protocols Have Come To Broadcast’, the launch of ATSC 3.0 will enable a world where ‘Broadcast Protocol Can Run On The Internet.'

Design and User Experience are critical to platform exceptionalism, while the race to produce or acquire premium content has accelerated. VOD services will swell with leading media, studio, or branded ‘single genre’ distribution applications until OTT apps are HTML5 enabled or form fit back into the linear EPG (e.g., Comcast’s X1 platform) – at which point the Viewer will not know the difference.

Recommendation & Discovery will improve with neural networks and deep learning applied to the unceasing gathering of understanding about whomever it serves. You may not know you like content that incorporates 'Social Game Theory with protagonists that have partial information’ — but the corpus that informs, or in fact, influences the impressions you consume, will. Far too soon to worry whether your machine has an agenda for you, but you can bet it has a ‘growth mindset.'

Automation will be the great disrupter before Artificial Intelligence. That is, A.I. will be the dominate fixation of the industry journalists, helpfully fueled by billionaire thinkers heaving foreboding augur of 'Killer A.I.' Yet, in these times, we will need help on the ever more important task of telling the difference and relative speed of product development and marketing. What is reality versus another’s alternative?

And how much of what’s to come will be of deliberate action yielding a controlled result, versus the lingering feeling that we will cross an interval that will ignite us past the point of no return? I believe it is a 'both/and'.

I contend that to a degree we may conceptualize in our minds ‘how fast things are moving’, that by an order of magnitude, ‘things' are actually moving much faster. For instance, Google’s project to scan every page of every book on the planet is not an altruistic archival project for humanity — they are doing it to teach the machines.

So, with that I have a few predictions. I believe the TWX-T merger will be approved by anti-regulation FCC, but may be forced to divest or scuttle CNN because of the Chief’s grievances. I would guess that Broadcast station group market cap (of 39%) is lifted, allowing further consolidation of US Station Groups, distracting from the larger and more critical realization that ‘a scaled behemoth’ is not enough for an invitation to the next cycle of technological disruption. It took David just five smooth stones.

I would venture that the maturation of the adtech ecosystem, particularly as it relates to digital, will be a new dawn of viewability, transparency, and efficiency. Digital will overtake TV in spend overall ($92B), but more dollars will shift to performance models (ROAS, visits, sales), while attribution will finally be table stakes for the CMO that wants to extend tenure beyond 18 months.

In the world of Amazon, Coca Cola is now a direct response product. Snapchat will consume over 50% of your wireless data bill (the ephemeral form represents 65% of British Telecom’s subs data plans in the UK). Consider that Snap is changing our language to include forms and color and authenticity — a window into a world of another, which means there will be different inflection on the question ‘What’s TV?’ coming from the ushering in. And If the Congress ever gets to it, corporate tax reform could trigger the repatriation of dollars overseas, flooding coffers for dividends and investments, and more attempts at mega mergers.

So, the smartest will continue to invest in Automation, Data, mobility, and A.I. (or at least market deals as so), to play part in propelling the future, rather than to be shaped by it.

So let us keep up the ‘saying’ – so we may get closer to the ‘knowing’. For every Observer, it will be entirely its own thing.

© 2017 Progress Partners, Inc.

50 Milk St., 16th Floor, Boston, MA 02109  |  245 Park Avenue, 27th Floor, New York, NY 10167  | (617) 401-2700

Securities related transactions are offered through a registered representative of an independent broker/dealer, Applied Capital, LLC. Member FINRA/SIPC. Testimonials contained in this site are not indicative of future results. Learn more by reading our Privacy Policy.