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Live Streaming is Replacing Traditional Media

Delian Partners
Jul 21, 2021
2 min read

Even if live streaming has been around for many years, it experienced a tremendous acceleration during the pandemic as people spent on average 30% more time engaging with their smartphones and media devices.

As technology and media consumption remains higher than pre-covid levels, the success of Live Streaming is growing on a global scale. One of the sectors in which it has been more successful is e-commerce: E-commerce consumption accelerated by three years during the pandemic, and the increased competition in the virtual space worked as a catalyst, pushing companies to improve their users’ online experience and catch their attention.

Chinese tech giant Alibaba was the pioneer of Live Streaming in e-commerce. Through the Live Streaming platform Taobao, Alibaba created a new personalized shopping experience, connecting companies with roughly 800 million monthly users who visit Alibaba’s e-commerce site. Taobao’s range of products available in live streaming has been growing massively and the platform is expanding its offer to those categories previously available only offline, such as cars and large appliances.

Live streaming has also become a key feature in the social media landscape. With 2.6 billion downloads, 1.6 billion worldwide users (including Duoyin), and 800 million monthly active users, TikTok is one of the fastest-growing social media platforms ever. What makes TikTok unique is its AI algorithm. Once a video is uploaded on the platform, the AI algorithm uses Natural Language Processing (NLP) to analyze and categorize the video – including audio, hashtag, and images, which allows TikTok to provide users with highly targeted content that they find most interesting. In this way, TikTok’ content can engage its new users for up to 10 minutes, which is three times the capability of Instagram.

Another example is the Amazon-owned platform Twitch, which hosts 91% of all video game streaming and provides the content of more than 4 million broadcasters, monthly. In a high-competitive video games landscape, Twitch differs for the “Just Chatting” category: Streamers can engage with the community and talk to viewers even when they are not playing any game. To understand the impressive growth of the platform, consider that Twitch peaked at around 1.7 billion hours watched in November 2020, versus Facebook’s all-time-high of 250 million in September.

The live streaming market can become the largest entertainment medium. As reported by TechJury, the global live streaming market is surpassing the traditional media ecosystem - such as TV or social media- and it is expected to be worth over $247B by 2027. The growth trajectory is supported by a secular shift in consumer habits, considering that 63% of people aged 18-34 watch live streaming content regularly.

The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.

Technology Innovation is Supporting the Digital Ad World

Delian Partners
Jun 17, 2021
2 min read

2021 so far is showing an acceleration of the strong growth trend in Digital Advertisement. As businesses re-open worldwide and previously canceled campaigns are resumed, advertisement budgets have been increasingly directed towards Digital Ad because the use of social media platforms and streaming services have risen almost everywhere.

Digital vs. Traditional Ad Spending (US)

Source: eMarketer

Not surprisingly, the main beneficiaries in the Digital Ad ecosystem are Alphabet, Facebook, and Amazon, which all reported strong growth in Ad revenue in 2020. Among these, Alphabet continues to dominate the Digital Ad market: In 2020, Google accounted for about 29% of the total Digital Ad revenue in the US, followed by Facebook and Amazon with 25.2% and 10.3% respectively.

US Digital Ad Revenue Share, By Company, 2019 & 2020

% of Total Digital Ad spending

Source: eMarketer

Google built its success in Digital Ad by leveraging AI software to collect and integrate data from users in a more sophisticated and faster way. While Google’s platforms connect businesses with billions of people every day through Search and YouTube, AI helps them to create highly tailored content based on consumers’ needs and preferences of the moment.

With an impressive 1.87 billion daily active users in 1Q21, Facebook can count on one of the largest and most diverse advertising audience ever and collect a huge amount of data for the benefit of advertisers. Facebook also introduced innovative features to its Ad service: The use of Machine Learning helps determine the likelihood that a given user will act as the advertiser wants, such as visiting the advertiser’s website, installing their app, or buy a product. And then, the algorithm will rank the quality of Ad content through an Ad quality score so that the advertiser can fix the campaign following the best way to achieve his goals.

In recent years, Amazon’s Ad business also experienced a tremendous growth, mainly fueled by the acceleration of online shopping: According to EMarketer, Amazon advertising revenue in the US will surpass $20B in 2021. To keep up with the competition, the e-commerce giant also implemented an AI driven algorithm which analyzes real-time data generated by shoppers’ behavior, allowing advertisers to provide specific content to a narrowly targeted audience.

Digitalization is changing consumers’ behavior and companies must be increasingly data-driven to be able to communicate with people who spend more time navigating through the Internet while scrolling social media, checking emails, or reading the news. Digital Ad is becoming mandatory for companies to attract new customers and build a relationship with their brand.

AI is not just a trend, it’s the future

Delian Partners
Dec 7, 2020
3 min read

Unsurprisingly, S&P500 earnings estimate dispersion reached a new record high (100th percentile) in 2Q2020, as the pandemic outbreak has contributed to widening the revenue gap between companies who embraced the digital revolution vs. companies with low exposure to technology solutions.

This situation is pushing business leaders to quickly adapt, rapidly evolving legacy business models: as multi-trillion dollar industries turn to AI to accelerate their digital transformation and enhance their chances of survival, investment flows towards the AI market continued to grow at a CAGR of 43.39% this year, up to $40.7B in 2020 from $28.42B the year before

As reported by a McKinsey global survey, companies and business leaders agree that leveraging AI will drive profit growth by reducing costs, managing risks, increase margins, and fueling innovation. Moreover, the potential of AI technology can be exploited in many ways and in different sectors.

Think about digital payments, where people experienced drastic changes in their payment habits during lockdowns and companies must deal with an increase demand for online transactions, making digital payments more accessible and transparent for their customers.

For example, Chinese Giant Alibaba launched the “smile to pay” service, a facial recognition technology allowing customers to literally pay by smiling in a 3D camera, after having recognized and verified the customer’s identity through AI technology. Customers can save time and enhance their shopping experience by eliminating extra steps in the payment process, like taking out the card and entering the PIN, also reducing the risk of fraud.

Recently, Amazon opened the new era of smart grocery shopping supported by AI technology, by launching its Dash Cart in its Amazon Go stores. Each cart is provided with sensors and cameras which identify all items that shoppers put inside the cart, automatically charging items to the bill and showing all product details on the cart display, eliminating wasted time with traditional check out systems and improving shopping experience. Those carts are powered by an AI software which communicates with hundreds of cameras in the ceiling, supporting the entire system.

Other great innovations come from the healthcare industry: recently Google-owned Deepmind, through its AI service AlphaFold, captured 3D shapes of proteins, answering a big challenge for scientists to finding a treatment for genetic diseases. The 3D model generated by AlphaFold is more accurate than any other generated before: while the average performance of other systems typically scored 75 on a 100-point scale of accuracy, AlphaFold scored around 90 on the same target. That represents a big milestone for the health industry because through AI technology it will be possible to design drugs more accurately and accelerate the understanding of severe human diseases, including cancer.

AI is becoming the new normal for many companies, not only tech giants who were among the first to understand the long-term potential provided by technology innovation. With the ability to analyze more data and a more flexible approach to work, companies can offer better customer experience, more customized services, enhance people's lives, and most importantly they can improve their financial metrics.

The adoption of AI technology started a long time before the pandemic, but the recent breakthrough in AI computing ability and the benefits witnessed by companies who adopted these technology solutions, are a positive signal that we are still in the early stage of a massive wave of innovation and growth for the sector, which will persist after the current crisis.