RonBloom.com

OUCH!!! I heard yesterday from an economic pundit that:

“it always gets darker just before it gets pitch black”

Welcome to the downturn. To listen to the talking heads, its definitely dark and getting darker. There is no reason to doubt the prognosticators other than that they are almost always wrong. However, for those of you who are trying to understand our current economic doldrums/castatrophies, let me add my bit, and maybe even shed a little light.

WHA’ HAPPENED?

We are experiencing the the implosion of a credit bubble, which is completely different than an equity bubble. Although it is a cycle, it will last longer and touch more people than any financial cycle in our lifetime. The primary impact of this meltdown will be a global reset of debt, equity and finance. It will be a global whipping, with the consumer feeling the brunt end of the stick.

But what does this mean for you? You will have to adjust your personal lifestyle to live in a less credit-dependent world. Sound easy? Don’t bet on it. Your personal economics will fundamentally change, and those economics will dramatically change your behavior. We are a nation of consumers, and consumption is driven by social interaction, our economic DNA. I think of it as a “social economy”, driven by personal lifestyle choices that and “display-based” consumption. Think of the dramatic impact on the economy as we shift from “look at what I have” to “look at what I saved”. From the lowly consumer, straight up the economic foodchain, things will constrict, or even collapse. Make no mistake about it, as a result of this credit debacle, your spending habits will invert and your lifestyle will change dramatically. And therein lies the opportunity.

OPPORTUNITY! Am I crazy?

Let’s look at some assumptions that I have made. Our current economic spiral will have these four effects:
1. More people will travel less
2. More people will spend less
3. More people will spend more time at home
4. More people will spend more time online

In some ways, the technology boom-bust-boom of the late 90’s has prepared us for this effect. In many ways it will feel like sacrifice, in some others it may be an opportunity. I believe we will begin to see a transition into a “Stay At Home Economy” and this change will create an incredible opportunity for online entertainment.

With the rise of web cams will be the rise of web conferences. Businesses will take on an entirely new shape as they move into the modern world of Telepresence (sen Ken Rutkowski’s article) . Business and personal lives will increasingly co-mingle (Ray Lane and the “Human Enterprise”). “At-Homers” will redefine the nature of online entertainment and begin to consume media in different ways. Producers will begin to seize the market and create new entertainment formats to reach this new audience on their computers, TV’s and phones. Entertainment socialization will rise from 2.0 social networks, creating living reality programming. New entertainment networks (PLUG: like MEVIO) will begin to package and deliver this new type of programming to an ever-increasing audience. Brands will realize this is the single greatest ground-floor branding opportunity since TV. New revenue models will materialize. This process will begin to multiply and proliferate and voila, The micro economics of broadband entertainment will go macro.

The Perfect Platform for the Crumbling Economy

So here is the big opportunity. We have spent 10 years and billions of investment dollars creating the platform for the crumbling economy (not a great positioning statement). Now is the time to put it to use. Will it lead the economic recovery? No. Will it change the world? Maybe. Who will win? We are about to find out.

More on this coming.