How The Internet Will Wallop Radio Shack, Comcast And A Few Other Giants in 2015
(This post originally appeared on Forbes)
I was in New Orleans to give a presentation a month or so ago when tragedy struck: I had forgotten my laptop’s power cord at home. As you can imagine, I’m dead without my laptop and 6 hours of battery life was not going to cut it for me the next couple of days. Fortunately, in a shopping mall not too far from the airport I located a Radio Shack. And, of course, they had a power cord for me. For the one or two times a year that Radio Shack becomes part of my life, it’s always a good experience. But that experience will soon significantly change…even possibly go away entirely.
That’s because Radio Shack has been walloped by the Internet. But they’re not alone. Some other household names are getting walloped this year too.
Radio Shack announced its filing for bankruptcy in 2015. They have too many stores. They have a name with the word “Radio” in it. They sell the kinds of stuff that most people, unless it’s an emergency like mine, can just buy online. And the stuff they sell is for machines that have not only become disposable as their prices have significantly dropped (I bought my last laptop for $200) but are being built well enough to usually last for years without repairs. My college-aged kids have never been to a Radio Shack. And because of the Internet, it’s likely their kids will never know the stores even existed.
Comcast. To be clear, Comcast (and Verizon, and other cable providers) will not go away anytime soon like Radio Shack. But the Internet will wallop them too in 2015. Major content providers from ESPN to HBO to CBS will all start streaming their shows online this year, breaking apart their cable model. Meanwhile, services like Netflix, Hulu and Amazon are offering free or inexpensive content online and they’re evenwinning awards for it too (psst: besides “Transparent” also check out “Mozart in the Jungle” – it’s excellent). “Smart” TVs stream this stuff without the need for “cable.” Comcast has lots of ways to make more money in the years to come, but cable TV, their backbone for so long, will likely not be one of them and that’s because of the Internet.
VISA. Two things are happening in 2015 that will wallop VISA (and MasterCard and other credit card providers). First, new rules will take effect on October 1 which will put the liability of credit card fraud on the heads of retailers if they don’t implement updated systems that will accept soon-to-be issued cards with EMV (Europay, Visa, Mastercard) chips. EMV-compliant cards, which require costs to implement and slow down the check-out process (a PIN will be required) will likely be unpopular with both consumers and retailers will just as likely drive them more towards mobile apps (which of course rely on the web). Which means that in 2015 we’ll continue to see a significant growth of mobile payment services like ApplePay, Google Wallet and PayPal. VISA and its competitors will certainly be involved, particularly in payment processing. But the credit card business this year will be walloped to its core and change – all thanks to the Internet.
Sony Pictures. Sure, the company lost a boatload during “The Interview” debacle and will likely face years of repairing relationships with its employees, executives and partners. But there was a silver lining to the whole affair: the Internet. I’m sure more than a few eyebrows were raised at studios all around Hollywood when they saw just how easy it was for a major motion picture to be immediately distributed, purchased and viewed by millions of people around the country thanks to online services like YouTube, Xbox, and iTunes. No doubt it’s fun to watch movies in a theatre but let’s also admit that if we can watch a two-star film like “The Interview” on the day it’s released on our big, flat screen, HD TV from our sofa, and for half the price, well…sign me up. Thanks Internet.
Marriott. I’m a frequent Marriott guest for business and have no problems with the chain. But hotels and cab companies will continue to be seriously walloped in 2015 thanks to the indisputable value of AirBnB, Uber and other sharing services that have exploded because of the Internet. Now, when I go for a city break with my wife I’m looking to rent a place on AirBnb instead of staying at Marriott which is generally more expensive, more impersonal and usually located in a non-residential neighborhood, which we both prefer. And as Uber continues to gain market share in cities around the world, cab companies are being forced to completely re-think how they’re serving customers and paying their drivers. The Internet is walloping companies in the travel industry that refuse to adapt to the new world.
Bank of America. Just a few years ago, we went to places called “branches” where we filled out “deposit slips” and said hello to “tellers.” And all between the hours of 9 and 3. Who under the age of 50 does that anymore? “Checks” (another relic of the past which will soon be in the past) can now be photographed with your smart phone and sent via (of course) the Internet to your bank. Everyone I know, both personally and professionally, pays online. New cloud based accounting applications easily transfer data with banks. And getting loans? Microlenders are extending easier-to-get loans to small businesses because they can use the Internet to connect and monitor their clients real time. Like Comcast, VISA and Marriott, banks will not be going away. But their entire model will continue to be walloped by the Internet in 2015.
The Internet is just beginning to wallop the world. And 2015 will be a year of change for many household brands. In just the next decade it will be relied upon to provide mashed-up data so that companies can deliver more personalized services, download instructions to print out equipment and body parts, navigate cars around busy highways without the need for a driver and connect information to machines and appliances so that our lives are easier to live. Some companies, like Radio Shack, will likely not survive this change. Others will adapt, but not without cost. Where will your business be through all of this? Will it also be walloped?