Interview, Webinar, Conference Presentation
"The Battle for Our Screens," Part 3: Social Media in the Social Distancing Age
Goldman SachsHeather Bellini, Piyush Mubayi, Jane Dunlevie, Jake Siewert, Heath Terry, Jane Dunleavy
- Social media engagement is projected to sustain growth across major platforms including Facebook, Instagram, YouTube, Snap, and Twitter following a significant 2020 increase, with gaming and streaming services like Twitch, Peloton, and Houseparty filling voids created by social distancing.
- Major platforms plan to continue heavy R&D investment to maintain services and prioritize the removal of bullying and hate speech, while Zoom is expected to remain a primary communication tool as virtual meeting habits persist.
- Advertising is forecast to accelerate its shift from traditional to digital models due to small businesses adopting digital storefronts, and AR/VR adoption is predicted to surge despite current hardware limitations, with mobile phones potentially replaced by wearable glasses.
- AR/VR applications are anticipated for precise surgical incisions, remote repair assistance, virtual collaboration, and consumer virtual travel experiences like viewing the Great Barrier Reef or attending virtual college tours.
- The current environment is viewed as a "sweet spot" for venture capital to accelerate AR/VR applications, and live streaming is expected to maintain popularity post-pandemic provided data consumption costs are managed.
- Social media time spent growth in Asia is expected to normalize and decline to mid-to-late 2019 levels as the pandemic subsides, excluding short-form video which remains a structural winner with continued dominance by TikTok and WeChat Channels.
- User behavior in Asia is predicted to revert to pre-pandemic norms with crowds returning to physical locations, while general smartphone time spent may decrease slightly leading to slower overall social media growth rates.
- Monetization models in social media are expected to increasingly rely on tipping and high-value transactions rather than subscriptions, with tipping culture spreading from China to the US and other Asian regions, potentially increasing revenue from tens to hundreds of dollars.
- Revenue expectations for large public and private social media companies in 2020 are forecast to decline between 5% and 20%, yet stock prices for these large public entities are expected to rise by 30% to 100%.
- Strategic M&A activity is anticipated to intensify as acquirers add cash to balance sheets, focusing on best-in-class properties with traction in video products and social selling capabilities.
- The IPO market for tech and internet companies is expected to see an incredibly busy fall, with a healthy pipeline of high-growth social media companies preparing to go public early next year.
- Content appropriateness and hate speech removal are identified as key priorities for platform evolution, while risks associated with hardware limitations in AR/VR and data price points for live streaming are noted.
- All price references and market forecasts in the statements correspond to the recording dates of August and September 2020, implying these figures are context-specific to that period.