2001 Trend Forecasts and Outcomes

1. There will be heightened development of the wireless Internet, but not in ways that had been expected.
   As WAP's failure is confirmed, and the UMTS (Universal Mobile Telephone System, 3rd generation cellular technology) rollout is affected by the gap between the technology and consumers' interests, the demand for wireless Internet connection will be a function of PDA (Palm, Handspring, Windows CE) and portable mini-computer use. This development will be especially important in the North American context, where cellular phone use is less widespread than in Europe and Asia, and where using the Internet is increasingly important to the professional class.
   
   Outcome: No one (including Nokia and Ericsson) any longer doubts the failure of WAP; and as time goes on, 3G mobile telephone network implementation (supporting high speed Internet access) seems to be further and further away. In contrast, several studies, such as by Cahners In-Stat Group or Telephia confirm that users want wireless browsing via their PDA or PC. This has, in fact, led to the bankruptcy of more than one wireless ISP. Promoters of services need to understand that users want equipment to be free of cable clutter more than they want additional functionality to such an unsuitable tool as the telephone. And this is the reason for the success of the 802.11b (wireless ethernet networking) technology that allows for wireless connections among PCs at low cost and without the user needing an advanced degree in telecommunications.
2. Personalized marketing will take the lead in advertising techniques.
   Up until now the Internet has been considered as just another media outlet, and dealt with as such by advertising agencies and copy editors who have been vainly trying just about any kind of advertising on it. Their limited success shows that the Internet is first and foremost an interpersonal communications network more suited to personalized, direct marketing (e-mail advertising, targeted offers etc.) than to mass-market publicity (banners, pop-up or interstitial ads and other such features).
   
   Outcome: The large number of promotional e-mails we all receive daily clearly indicates the growing importance of Internet-mediated personalized marketing. It has been estimated that each Internet user received an average of 36 "opt-in" e-mails per week, double the previous year's average. Some ad networks such as 24/7 and DoubleClick seem to have put aside electronic newsletter advertising to concentrate their efforts on sending personalized messages to targeted internauts. Meanwhile, faced with the growing phenomenon, Europe has been trying to reinforce its anti-spam legislation while not limiting the potential of personalized marketing.
3. Internet publishing will have to finally come up with a business plan on which to base itself.
   Other than in its form, there is currently little innovation in Internet publishing; business plans are often merely based on a transposing of the traditional model, namely, that based on advertising and subscriptions. With limitless budgets now a thing of the past, those involved will have to learn to do a lot more with much less-supposedly technology's saving grace-and not try to apply mass-media revenue models (see Forecast #2). What's to be expected: a lot of layoffs, a questioning of the need for expensive software, and, especially, a need to acquire knowledge of personalized advertising in order to design products for sale to "announcers."
   
   Outcome: Three years ago the future of content providers' sites lay in advertising; two years ago it was in e-commerce; last year there was no longer a future :. Now, as we had predicted, many sites are experimenting with new revenue modalities. Thus, many dailies have adopted differing fee-for-access models: a fee for access to archives at The New York Times or Le Monde, to a complete version of Le Devoir or Les Echos, or to an electronic version of the paper edition of the The Globe and Mail, Le Monde, or The New York Times. Alternatively, some independent sites have begun to offer paid-for services or value-added content: Salon with its exclusive, ad-free premium site, or Yahoo and its multiplication of value-added services. In the US and in France, actual operations and studies of for-payment models are proliferating; although in Quebec we still are in the gestation stage, with for example, RDS and its VIP Club, or MonCourrier.com, whose shutdown was cause for much commentary, and whose resuscitation as a paid-for service remains possible.
4. Convergence will not gain acceptance.
   Even though by combining the content offerings of the Internet with those of television, "telenauts" can benefit from the synergy and complementary features of both worlds, projects that propose one-box access to everything are doomed to failure. Whether using an interactive TV terminal or an advanced gaming console, the viewer-surfer-gamer will continue to prefer using complementary tools (remote control, computer and game console) that are adapted to his or her particular user-habits. This means that interactive functions-guide to interactive programming, notification of special programs, extra news summaries-to complement television offerings will be most appreciated by TV viewers; while the computer will remain the tool of choice for information research, e-commerce, and, especially, interpersonal communications, which is what the Internet is mostly used for.
   Finally, as much as serious gamers may be happy to use their consoles for contests over the Internet, they just as equally will prefer to use the computer for exchanging notes and strategies with others in appropriate discussion groups.
   
   Outcome: The lack of any progress in this dossier is probably a confirmation of this forecasted trend. In fact, digital television's attractiveness is mainly due to the canal selection range and the TV programs available. Videotron's Internet service via digital TV is almost certain to fail, and don't be surprised to soon not have any relevant statistics available:. As far as game consoles are concerned, it turns out that the only real development thus far has been in network gaming, while other Internet-based services have been unsuccessful despite the emphasis on them in the latest consoles.
5. Company convergence will be unsuccessful.
   Empire mergers such as AOL-Time Warner and Vivendi-Universal will quickly be confronted with the limitations of their convergent approach. Firstly, they will come to realize that what makes for corporate strength in the delivery pipeline may be a weakness from the point of view of content creation. This fact is borne out by the failure of all previous attempts to combine the two capabilities in one company, AOL being the only exception to the rule thus far.
   Secondly, the "bloc" phenomenon will result in a fatal sense of isolation in the new economy environment. For example, an inability to establish a synergy between certain projects of one empire and the complementary ones of the other will adversely affect both; this will provide room for lesser players to acquire important market share.
   
   Outcome: The only tangible result of the first year of the converged empire (AOLTW) has been... the resignation of CEO Gerald Levin! For all such instances of corporate convergence the results have been much less rosy than expected; but it won't be until next year when the economic landscape becomes clearer that the true outcomes will be identifiable. And they will probably be hard to swallow for those who put too much faith in a strategy whose worth had yet to be proven.
6. The ASP (Application Service Provider - online software leasing) approach will begin to be accepted by companies, but it will be at least five to ten years before wide-scale deployment is seen.
   The industry consensus is that this is the wave of the future. And given that businesses tend to follow a consensus, this approach will take root and significantly revolutionize company operations as well as the technology industry and related services.
   However, the importance of the issues at stake, the impact on businesses, together with the anarchy-like conditions-lack of standards, multiplicity of models etc.-created by the excessive competition will together moderate the rhythm of deployment; this will have an impact on the development of pioneers in the field.
   
   Outcome: While the development of Microsoft's .Net approach has clearly motivated businesses to take a close look at the ASP approach, firms are nevertheless not rushing to implement a technological architecture that is still only fully mastered by Microsoft groupies. Security concerns exacerbated after September 11th as well as the repeatedly exposed weaknesses of Microsoft technology (notably XP, which was to have become a reference in security matters) will probably further slow the adoption rate of these technologies.
7. After years of feeling powerless to manage the Internet, governments and regulatory bodies will want to recover control of the medium by instituting new regulations and adapted taxation tools.
   The movement to a "Lex Internet" will be of a short duration, to be followed by the reflex of challenging the basis itself of such regulation. For example, implementing a tax on digital support media to benefit associations of authors may well result in the associations themselves being challenged by a significant number of the very authors they are meant to protect. In the same vein, regulations meant to accomplish completely laudable objectives will have undesirable secondary results that will likely call into question the reaction of regulating in order to manage issues unique to the network.
   
   Outcome: Rarely has a prediction been so dead on, as the year saw a flood of related jurisprudence. In the European Union there was the law governing database protection and spam and a directive concerning copyright and the information technology society; and in France no fewer than 10 codes, laws and regulations were issued regarding the Internet, especially in the area of consumers', workers' and privacy rights. In the US, activity of the judiciary regarding Internet concerns centered on legal applications such as the first court proceedings stemming from the Digital Millennium Copyright Act (DMCA), the notorious all-purpose law that has been the bane of Internet pioneers and freedom of expression defenders. Note that rulings resulting from these proceedings won't be applied. First of all, Adobe has withdrawn its suit against the young Russian programmer it accused of having pirated Adobe software; and the suit to prohibit links to the DeCSS source code (which enables DVD decoding and copying) has run up against an Appeal Court ruling that authorizes the publication of the source code. And lastly, the legal victories of the RIAA over Napster and the like have done little to solve the problem of music file sharing over the Internet, one whose seriousness increases daily. A year ago Canada's Personal Information Protection and Electronics Document Act (C6) came into effect; and in Quebec, the Law Respecting the Judicial Framework for Information Technologies places Quebec in the lead in such matters. Needless to say, the infringements on rights occurring since autumn due to laws issued in the name of the war on terrorism have not spared the Internet and electronic communications.
8. High speed access development will impel site operators and developers to make use of "heavy" content (streaming video, complex animation, etc.)
   This approach will come up against regular users' expectations for more comprehensive content and faster access especially to content that interests them.
   
   Outcome: We were completely off base with this trend. While we were expecting unprecedented initiatives by content producers and site editors-developers, it's become clearly obvious that they totally underestimated the popularity of High Speed Internet in Quebec and Canada-nearly 50 percent of connected households use high-speed access. This, together with a drastic reduction in production budgets has resulted in a relatively "lightweight" Internet. Thus it is that Net surfers themselves are now the main providers of high-speed content in the form of the billions of songs and hundreds of films constantly being exchanged using available software such as Napster, Kazaa, Galaxy, etc. This phenomenon is what has justified the growth of high-speed access. From another perspective, whereas in the US and Europe the High Speed Internet is still growing, the Canadian market may become saturated if more content is not produced for users not involved in online music file sharing. This is a challenge that High Speed Internet operators seem barely in the process of confronting, as is the case of Bell with its high-speed content promotions and its GamesMania project.