Learn to pick tech stocks just by watching TV (and movies)


In 1962 Everett M. Rogers pinned the adoption of innovation in society to an S curve. The innovators, about 2.5% of the population, pick it up first. 13.5% follow suit as the early adopters, and then the early and late majorities, 34% apiece, pick up an idea. The rest of us, the laggards, wind up buying mini-disc players around the same time the iPod comes out.

Although it has its detractors, analysts use the model, along with a lot of complicated math and sociology, to predict the future. The really gung-ho then use that research to buy stocks.

There’s an easier way, though. Just watch TV.

Case in point: By 2011, Gartner Research predicts that 80% of all Internet users will be involved in virtual worlds. As a target number, that’s about 1.2 billion people.

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If you haven’t experienced them, virtual worlds can be fairly nebulous to pin down. My favorite definition is simply an online medium that gives users a sense of place. Worlds like Second Life are completely open-ended. They’re virtual sandboxes where users can create everything from magic wands that obey typed commands to conference centers for companies like IBM. Other worlds, like World of Warcraft, focus on their own gameplay-based stories. Users still create the moment-to-moment narrative, but the game developer puts together the overall experience.

screenshot / Text 100 In Second Life, metro is the new retro 

Right now, they’re a little bit scary and a whole lot geeky. Second Life is by no means the only virtual world, but it’s received most of the media attention. It was hailed as a new utopia in the early days. In the last few months it’s become more known as the place where public events are disrupted by flying penises.

Not all virtual worlds have that Wild West feel, but by and large, they’re a place where almost anything goes. That makes them frightening. And the television execs seem to get that.

Prime time this month is all about virtual worlds. Second Life is popping up on CSI: NY on October 24 and on The Office a day later. “Another Youniverse,” a fictionalized version of what looks a hell of a lot like Second Life, was the scene of a crime on Law & Order: SVU on October 2.

Based on last week’s Nielsen numbers, those appearances will combine for 34.602 million viewers. That’s not even including Toyota’s new World of Warcraft spot (video below) for the Tacoma that’s been making the rounds during Sunday football. Not too shabby for a technology that’s currently being lampooned by much of the national press.

In Law & Order, a woman innovator was kidnapped, of course, but the hook was that the only clue left behind was her avatar. In CSI, a woman is murdered, just to up the ante, and Gary Sinise must track the killer down in Second Life. In The Office, no one is murdered, I’m guessing, but nerdy Dwight becomes fixated on the virtual world. They’re all early adopters and innovators.

2011 is still a long ways off. Right now, the virtual world population is comparatively minuscule. Christian Renaud, Cisco’s virtual worlds expert, puts the total population of the top virtual worlds at about 40 million – or slightly more than their October television audience.

In the early ’90s, the peak population of the Internet sat just above 36 million. It was still pretty frightening then, which lead us to 1995’s “The Net” where another female innovator was stalked, lost her identity, and sent on the run. Sound familiar?

screenshot / Tanzen80 Looks like somebody didn’t cast a spell of protection – n00b 

The Net grossed $110.6 million worldwide. Let’s say tickets were about five dollars then, putting The Net at about 22 million viewers.

Now the only time you’d notice the Internet on the small or big screens is by its absence. With about 1.2 billion users worldwide – the same number as virtual worlds users in 2011 – it’s quotidian. Its population is also about 56.5 times as a large as the number of people that went to see The Net.

That puts virtual world adoption at about 2 billion by 2019. If Internet adoption continues to slow as it comes down the other side of the Rogers curve and virtual worlds do the same, that number doesn’t sound too far off.

If you wish you’d bought Google stock in 2004, it might be time to start looking for that virtual worlds purchase now.

Of course, 1999 brought two outliers in the television adaptation of The Net and The Matrix. So if you’re actually looking to buy stocks, you might want to trust the analysts’ complicated math, sociology, and S curves. Otherwise, just keep watching TV.

Toyota’s World of Warcraft ad

Teaser photo by Gelato Girl