Perhaps no single statistic sums up the enormous change wrought upon global society more than this: In October 2020, the market capitalization of Zoom Video Communications reached $151 billion – equaling the combined market capitalization of the top 15 airlines in the world, as ranked by the number of passengers carried in 2019. Yes, that’s right. A humble video conferencing company, whose HQ is on the sixth floor of an office building in downtown San Jose, California, now has a valuation that dwarfs the market cap of Southwest Airlines, Ryan Air, Air China, ANA, Lufthansa, and ten other household names from the world of air travel, combined.
Digital lessons learned: Accessibility and adaptability
There’s a lot to unpack here. On the surface, the rise of Zoom and the fall of air travel is, of course, one of the most significant changes we’ve all met with during 2020, as we’ve protected ourselves and our families by staying home and learning how to meet and transact through a screen instead of in person. It’s also a story of a 20th-century industry being supplanted by one from the 21st century. Given ecological sustainability and continuing health concerns, it’s a fair question to ask if travel will ever return to its pre-Covid peak, or if this year has signaled a sea change similar to that of trucking overtaking the dominance of the railroads, as occurred when the 19th century became the 20th.
An even more profound significance of this shift is that it shows how easily we’ve all adopted a digital reality as an acceptable replacement for a physical reality. In the realm of work, there are actual advantages to meeting in the digital world – you can conduct substantive discussions with customers in Buenos Aires in the morning, and customers in Zagreb in the afternoon, with near-zero setup cost in both time or money. Conferences have also become far more accessible. With no physical limits on the number of attendees, entry fees have plummeted, increasing direct access for many of us to thinkers and speakers we’ve only read about second-hand before.
Out of necessity, our children now attend schools online, led by heroic teachers who have figured out how to engage and educate the next generation entirely via the screen. There are still some bumps in the road, and not everything’s perfect (especially considering those who still lack adequate connectivity). Still, on the whole, we’ve moved quite smoothly into a world where what happens in the digital realm is understood to be just as meaningful as the same activity in the physical world.
The drive for us to find ways to connect when we’ve been physically kept apart has even led us to move what would have been significant events in the physical world into digital platforms that, unlike Zoom for work or Google Meet for education, were not originally designed for these kinds of activities. We’ve seen graduations in Minecraft, weddings in Animal Crossing, and work meetings in Red Dead Redemption. We’ve seen a virtual Tour de France conducted on Zwift and NASCAR matchups happen in iRacing.com. And, as we move what would have been physical world activities into digital spaces, we’ve started to realize that we’re no longer bound by reality in those new worlds.
When the original Kentucky Derby was postponed, broadcaster NBC filled the time slot that they’d already paid for with a digitized matchup of all thirteen Triple Crown winners from history, so that for the first time, we could see Sir Barton, the 1919 winner, racing Secretariat from 1973 and American Pharoah from 2015. Not possible in the physical world, but gloriously, thrillingly possible in the digital one.
New digital spaces
As we become increasingly comfortable in these new digital spaces that we all inhabit, creativity and production are flourishing in addition to consumption. To get credit in their online gym classes, my sons need to make videos of themselves doing the week’s assigned workouts, speed it up so the whole 30-minute session takes only a few seconds to view, then submit it to their teacher. This regular activity is turning my kids into fluid video producers, with my 13-year old telling me, “I spend much more time figuring out how to add cool effects to my videos than I spend doing the actual exercises.”
The market for digital goods such as skins and fashion accessories has continued to explode on platforms like Roblox and Fortnite, designed both by known brands (Gucci, Nike), who are simply meeting their customers where they spend the most time, and by amateurs who amass millions of followers with their skills. As observed by noted tech futurist Cathy Hackl, “The world’s next Coco Chanel is probably a 10-year old girl that’s currently designing avatar skins in Roblox.”
For those of us in the telecommunications industry, this moment offers us both a rebuke and opportunity. The rebuke is in connecting everyone. Why isn’t every schoolchild in every country in the world already connected? Well, it’s time to connect them now, and operators, governments, and new entrants like SpaceX’s Starlink are rolling up their sleeves and filling the void.
Realizing new opportunities in 5G
The opportunity is in realizing that digital presence is just as significant as a physical presence. And there just might be new revenues to be found there. Taiwan’s Chunghwa and Deutsche Telekom are both bringing the 5G Manova Virtual Reality headset to their markets, which does not run apps but rather allows users to enter its digital universe where their avatars can interact, play, transact, and create. KDDI’s five-day Halloween event in its Virtual Shibuya, a digitized version of a popular neighborhood in Tokyo, was visited by 400,000 people, who chose to show off their costumes in an online version of the city rather than risk their health by going to the physical location.
A vaccine is finally just around the corner, which should eventually return us to some level of pre-pandemic activity. But the genie is out of the bottle. Will any company return to its previous level of travel or real estate spend, now that it has found that working and meeting from home works so well? Will the avatars who sported gloriously outlandish costumes in Virtual Shibuya stop attending concerts online? Is the Tour de France likely to drop its online presence, or more likely to evolve towards “ride along with the pros” offerings in the future, where fan avatars can attempt to keep up on digital versions of those tough mountain stages?
The real legacy of 2020 is not that it’s the year we all stayed at home. It’s the year that our physical selves stayed at home while discovering the freedom and power that our digital selves possess. The successful companies of 2021 will be the ones who see this shift and lean into it, providing access, goods, and services that have meaning for both their customers’ physical and digital realities.
Follow along with Leslie Shannon and Monica Paolini in our podcast episode, “An Unprecedented Year in Telecom.”