2012: a year of tipping points

The world may not have ended as the Mayans predicted on 21 December 2012 but the year delivered heavily on tipping points. When we look back in a decade or two, 2012 might be seen as the beginning of the end for some established forces in the world.


tip·ping point

tipping points, plural

  1. The point at which a series of small ineffective changes acquires enough pressure or importance to cause a larger, more significant change
  2. The point at which the buildup of minor incidents reaches a level that causes someone to do something they had formerly resisted

Politics and Religion

This blog isn’t really about P&R but we might kick off with it anyway

After the recent massacre in Connecticut, US politicians finally seem to have found the courage to progress gun control. We will see whether they follow through on their convictions, but the deaths of 20 children might finally have tipped the power balance away from the lobbyists.

Established religion seemed to tip itself into the role of a collection of niche lobby groups. The public in Australia and the UK lost faith in the catholic church’s ability to divorce itself from paedophilia, and the Anglican church voted to make itself irrelevant from today’s world by rejecting women as bishops.

Digital business

Back on topic now, 2012 was a year of digital tipping points, when traditional business models in most sectors buckled under digital disruption, no longer able to fend it off as a distraction. Those businesses which had the foresight to invest ahead of the curve have been proved right, those that have ignored digital or were still testing the water have seen their business shrink.

Digital Newspaper MontagePrint media, a sector long under attack from digital, underwent the most dramatic tip. Circulation volumes of printed newspapers and magazines dropped 15-25% leaving businesses exposed to their large fixed cost bases. At the same time advertising income was crippled as printed classified advertising volumes switched to majority digital. At News, Fairfax Australia and The Guardian journalists were retrenched, editorial offices merged and even the size and reach of titles cut. Before 2012 we had newspapers that supported online versions; post 2012 we have news organisations that are multi-channel and often uneconomic.

Owners of retail property discovered that the days of ever increasing space and rents ended in 2011 as the proportion of sales through online channels reached critical mass. Landlords are now faced with the prospect of large reductions in retail real estate (in the UK, 20% of retail space is expected to disappear in the next few years) which has tipped the bargaining power in favour of the tenant for the long term.

Universities the world over will tearing up their strategic plans in 2013 after a tidal wave of MOOCs (massive online open courses) were launched in 2012. Stanford triggered the change in Autumn 2011 by putting 3 courses online for free and unis from across the spectrum followed in 2012. MOOCs will likely flip the revenue model for universities in the way that online has done for other content and the whole subject is definitely worth a post on its own, but suffice to say that from now on, prestigious real estate is no longer the bedrock of a university.

Once reliable markets such as children’s toys have also tipped. Hasbro and Mattel have been caught off guard by the sudden switch towards tablet games and toys.  Forward thinking toys producers like Lego on the other hand have never had it so good with sales increasing during 2012 by 24%; the first virtual Lego toys appeared in computer games in 1997.

Digital Content earns its keep

2012 will be seen as the year when consumers bought into digital content, accepting the need to pay for quality through the large scale adoption of digital subscriptions and streaming services.

The ipod dancersMusic streaming services like Spotify and Deezer are believed to have doubled their revenue base in 2012  and may now boast 20m+ paying subscribers globally (stats are due out from IFPI late January ). This would mean streaming services could now be delivering a third of music industry digital revenues.


Digital Newspapers with the right offering are also starting to thrive. The New York Times recently hit 0.5 million online subscribers and digital now generates 12% of the newspaper’s subscription income. The Guardian is managing to maintain its revenue by replacing print income with digital – around a quarter of revenue is now digital based and it is the third most read news site in the world. Its digital platform means it can cost effectively focus on markets other than the UK. A US version was launched in 2011 and rumours are circulating that an Australian version will be launched in 2013.

And of course, there’s Apple…

Apple Fifth Avenue2012 may be the year when Apple started to fall or at least become just yet another corporate. In the year after the death of Steve Jobs, Apple’s innovations were limited to either increasing the screen size of the iPhone (an extra row of apps) and reducing the screen size of the iPad (more pocket sized). Hardly legendary break throughs. Further, Apple Maps was voted worse tech flop of 2012 by Wired.

Most telling perhaps was the conversation i heard at a Christmas barbecue from a teenager talking to his Dad, “You can get me something Apple this year but no more next year, its just not that cool anymore“.

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