5+1 PREDICTIONS FOR 2017#roopakism Roopak Saluja • January 6, 2017
You’ve probably read at least one or two of these by now. So if I’m going to write one, a) it had better be halfway decent, and b) I should probably write it now, otherwise there really isn’t much point.
I have no idea how many of these are actually going to happen but I’d be willing to wager I’m right on at least a couple of them if not more. What’s the worst that can happen? None of these actually come true. But at least you’d have had an entertaining read in the bargain. So here goes…
1. Flipkart will cease to be a standalone entity
This has nothing to do with this week’s Quartz piece on the obscene payouts made to their top management in the last fiscal. It’s all been moving in this direction for a while now. Remember the time they raised $1B back in 2014? The very next day, Bezos announced a $2B commitment to Amazon’s India ops just to make it perfectly clear who’s got bigger balls. Then there’s Snapdeal funded by Softbank and Alibaba among others. Horizontal e-comm is a bloodbath. Over-inflated valuations, mark-downs, down rounds, senior exits, bleeding cash, etc, etc. The writing’s on the wall. It’s just a matter of time. And I’m calling it in 2017.
But who’s buying? Amazon? Too obvious? Maybe not. They’ve talked a lot, that’s for sure. It’s a matter of finding equilibrium- Flipkart will keep delaying the inevitable. And beyond a point, Amazon will no longer be interested. Or an Alibaba-backed Paytm maybe? I don’t know enough, so feel free to poke holes in my theories. But Flipkart will be bought or merged in 2017.
2. Twitter will get a second life
It’s kind of, sort of withering away. We can all feel it. Will they turn things around? The jury’s out on this one and I’m getting the feeling as each week passes, that more and more people are starting to lose hope. I, on the other hand, am a believer. I do think they can turn things around if they address their most important issues. Urgently! Yes, the troll and mob thing is out of control and needs to be reined in immediately. That’ll save it from crumbling further. But if they really want another shot at glory, they’ve got to revamp product. And that’s exactly what Jack Dorsey plans to do. Basically, they know what they’ve got to do. Now they’ve just got to do it.
3. Dentsu will buy IPG
IPG (Interpublic Group) owns McCann, Lowe and FCB, IPG Mediabrands and a bunch of standalones like R/GA, Deutsche, etc. Along with WPP, Omnicom and Publicis, they’ve been the Big Four of the advertising & communications world. Then came along Dentsu and Havas to make it the Bix Six. I’m going out on a limb here to say that Dentsu (or Dentsu Aegis Network, as they’re now called) will acquire IPG in 2017. God knows they have the cash. And the burning ambition too to be a bona fide globally dominant group. Naturally, this would bolster scale, and give them a deeper presence in Latin America and MENA, where they seem to be somewhat deficient at present. Again, I haven’t done a deep analysis of this but it’s the general impression I get as someone who’s relatively aware of what’s going on in the industry. There was some talk of this happening back in 2014 but I believe both parties denied it then. And to put things in context, the much talked about Publicis-Omnicom merger (or POG, as Martin Sorrell likes to refer to it) fell apart at the eleventh hour. Ashish Basin, the man who runs DAN (Dentsu Aegis Network) in India aims to make his group the #2 player in India by the end of 2017. If my prediction comes true, his job is already done.
4. Kohli vs Sachin
2017 is the year that a critical mass of people will start to believe that Kohli will achieve a god-like status beyond Sachin. No real supporting evidence, just a hunch based on his evolution as a player and his current form.
5. Airtel will buy a content creator
Cuz that’s what telcos do in this day and age. They need content. With WhatsApp killing voice and text revenue, it’s all about data. The more content they can provide, the more data their users will consume. And what better way to play it than to own the content? In a US context, Verizon did it when they bought AOL and Yahoo. And now AT&T is doing it with Time Warner through the TMT mega-deal of the decade announced in November. Right here, right now, Jio is making Airtel, Vodafone and lot others very nervous. Make no mistake! Jio is a media company disguised as a telco. As the world’s first purely 4G network, it’s built primarily for content consumption. Voice? That’s so 2016!
I suspect Vodafone is too scarred by the randomness of our tax regime to make another Indian acquisition. Ever! But Airtel will want to go shopping. Whom will they buy? YRF? Balaji? Excel? I don’t know. It’s a tough one. These guys likely won’t want to sell. Which means if a deal gets done, it’ll be insanely overpriced. Hmm…maybe I’ll take a side option on my prediction. If they don’t buy someone, they’ll commit an enormous amount of investment towards content. More likely the former than the latter.
6. HBO won’t get spun off. Or will it?
Up until the AT&T-Time Warner merger was announced, I was damn sure the latter was going to spin HBO off as an independent company to unlock maximum value. Given the lack of synergy between HBO and its parent and the high the former has been riding since the unprecedented success of Game of Thrones, among other things, it would be Time Warner CEO, Jeff Bewkes’ fiduciary duty to champion this move. But then the merger got announced, and it’s pretty obvious HBO was the #1 motivation for AT&T to seek out the deal. So let’s just say my prediction’s gone to shit.
But then, as if on cue, I read that Trump is against the deal will possibly oppose it. I don’t know if that means it’s not going to get done but let’s just say my theory may just get resurrected for a second life. Just like Twitter.