We can look to the patterns of the past few years to define the likely digital media trends for 2013, from the unprecedented audiences of – and challenges facing – Facebook and Twitter, to the seeds of promise in the most ambitious and timely startups.
Facebook swung into a different era in 2012, reaching its billion-user milestone but also demonstrating unreliability and immaturity in a shambolic public flotation. The company will continue to endure peripheral user disgruntlement because it's a price worth paying to stay developer-led and remains quick to deploy new features.
But under pressure to increase revenues, the introduction of paid-for posts early in 2012 cut the reach of organic posts by as much as 80%. Hacking back core information sharing is a big risk. It's a trend that has upset advertisers, points out social technologist Suw Charman-Anderson. "Some advertisers have already pulled their whole budget from Facebook because they are being more analytical about their returns," she says. "We'll see Facebook page rot, because if you're only reaching 5-10% of the people you were reaching it's just not worth doing. Facebook has become cynical in the way it treats its users."
Toby Barnes, director of product strategy at digital ad agency AKQA, says Facebook users will drift away to niche community sites and brand destinations. "It will grow in new markets and make more money, but not in Europe and the US. Kids don't want to be where their mums are, and parents don't want people to sell things to their kids. I look at it like malls – there will be some massive Westfield-like destinations, but also a resurgence of the independent, creative part of the city."
Charman-Anderson expects the platform wars between Facebook and Twitter – most recently played out in feature-cutting between the latter and Facebook-owned Instagram – to intensify, with Twitter inadvisably cutting yet more support for third-party clients. "The ecosystem is going to begin to crumble, yet without that ecosystem Twitter doesn't have a business."
Developers despair about this closing off of some of the most active parts of the web. We will see fewer symbiotic Egyptian plover/crocodile-style business strategies, and more legal challenges such as the PeopleBrowsr case in November, a data analysis firm that sued Twitter for changing its terms and extinguishing its business after blocking access to its "firehose" of tweets. Even social games giant Zynga, with nearly 300 million monthly users and its dependency on Facebook to publish most of its games, is "struggling to evolve", according to analysts.
On a more positive note, Paul Fisher of venture capital firm Forward Ventures points to some positive Twitter advertising experiments at dropwines.com, one of their portfolio companies. A combination of promoted tweets and organic conversations generated more revenue than an established Google AdWords campaign. "We are starting to see data now that we can derive a positive return [from]," says Fisher. "That's always been really difficult on Facebook, though more experimentation is needed and the Twitter platform needs to mature. At the moment they keep experimenting and optimising how they are charging."
Spotify has had a strong year and a successful revamp with new social features, and some analysis puts the music streaming service on track for $1bn in revenue next year – but that could all be undermined if Apple finally launches its much anticipated streaming service. Apple is still a formidable corporate machine on track for tablet domination, but with the late Steve Jobs's legacy receding, there's a feeling that its mojo will noticeably fade during 2013.
Amazon will face continued political – though not life-threatening – pressure over its UK tax arrangements, but could also see challenges from startups. "Amazon is ripe for disintermediation itself, having done that to bookstores, publishers and distributors, so some plucky publishing startups will start to push Amazon to the sidelines," says Charman-Anderson. "As soon as consumers feel they have a sensible choice, they will go for it."
Two interesting content trends have emerged in spite of, or perhaps because of, the relentless fast pace of the internet. In publishing, Charman-Anderson points to the trend for long-form, "slow media" content projects, with Kickstarter-funded Matter– co-founded by former Guardian tech journalist Bobbie Johnson – and music magazine Uncool both publishing digitally, and Delayed Gratification in print. Fisher also expects to see more businesses that blur the lines between ecommerce and media, with Net-a-Porter about to release a new magazine and Asos still thriving. "It's harder for a media company to move towards ecommerce and they will continue to struggle with that, but the ones who succeed will be the ones who add transactions."
The second, says Fisher, is in ecommerce, where local, handmade and the craft communities have become mainstream, from farmers' markets to knitting groups. Online, that will continue to be expressed through niche services and communities FolksyCraftsy , Graze and Lovefre.sh.The growth of the nascent 4G network will support UK web users' needs and the public appetite for consuming and making video on mobile. Around 40% of Skype minutes are on video, while this year has seen a 60% increase in mobile data consumption generated by social networks and multimedia content. Though the UK is an advanced market, smartphones only account for 17% of handsets, so there is massive room for growth. To quote venture capitalist and legendary internet analyst Mary Meeker, the combined trends of mobile devices, connectivity and user-interface design pave the way for "a complete reimagining" of every industry and service.
And it would be a delicious irony if, this time next year, we were celebrating a triumphant revival of the new, de-Murdoched MySpace, finally given new life as the music site it should have been all along, and a back-from-the-brink Yahoo, equally reinvigorated by energetic and focused chief executive Marissa Meyer. In with the new old, out with the old new.
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