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InContext / An inside look at the business of digital content

Platforms, politics, people and sharks

November 20, 2019 | By Jason Kint, CEO – DCN @jason_kint

Last week at the 2019 World Media Congress in Las Vegas I had the privilege of being asked to address the weighty topic of “Platforms, Politics, and People.”  At this moment in time, it presents a remarkable challenge to cover the confluence of these topics before a global audience.

I found myself trying illuminate a perilous intersection between the growing distrust of tech platforms (which continue to register record usage) and the growing divisiveness in politics. And, to make things even more challenging, my speaking slot was at 5 p.m. just before cocktails in Las Vegas, of all places.

And so, facing challenges both topical and logistical, I decided to do what had to be done: I cued up “Baby Shark.”

Jumping the shark

As much as this dreaded video is guaranteed to intractably embed itself in the mind of any hapless listener, it also represents the good of these topics. This song impossibly united all of Washington, regardless of politics, as the Nationals won their first ever World Series. It has racked up close to four billion views on Google’s YouTube making it one of the most watched videos of all time. If there is good in the world of platforms and politics, it’s represented in Baby Shark.

Yet, despite the tenaciously peppy and persistent beat of Baby Shark, my mind turned to the bigger, badder sort. After consulting DCN member National Geographic and the Merriam-Webster dictionary, I found the term I was looking for: feeding frenzy.

This wildly aggressive attack of prey by an animal or group of animals provides an accurate description of policy makers’ and the press’ relationship to tech companies right now. Their frenetic scrutiny of tech has been driven primarily by Facebook’s woes over the past 18 months. It took some time but there are already signs of Google’s blood in the water. The alpha predators are under attack.

Boiling the ocean

Tech platforms currently face two issues that are making big waves. The first is a slew of antitrust investigations, which are underway in the Germany, UK, Israel, Australia, and France. Oh, and also in the offices of nearly every one of the United States’ Attorneys General, not to mention by the Department of Justice, the Federal Trade Commission, and Congress. For perspective, recall the antitrust investigation of Microsoft two decades ago, which many argue provided the oxygen for Facebook and Google to launch. That investigation (which resulted on certain limitations being imposed on the company) involved a mere 20 states as compared with this bipartisan group of nearly 50.

On its own, an antitrust review might not cut too deeply. Significantly, however, this one takes place at the same time as new laws around privacy and data protection are being enacted globally. The business model of devouring personal data to micro-target advertising is at risk. It’s this intersection of data and competition policy which presents significant challenges to this mighty Duopoly.

Google and Facebook would prefer to keep antitrust scrutiny focused on the price of their products. That’s because most of their services are free to the end consumer. But price is not the only factor in an antitrust investigation. And, in an increasingly complex profit-driven data economy, new issues have arisen that raise the stakes. For one, there’s the obvious question of whether Facebook’s dominance allowed it to look the other way while users’ data was abused, and its post-IPO profits soared. 

Shark tank

Significantly, today’s political concerns – and these investigations – are bipartisan. Republicans and Democrats alike are increasingly worried about data privacy and the ability for market entrants to innovate in a world where two companies dominate through data-based surveillance advertising. At the same time, everyone is getting more educated on the issues as we can see in the hearings. And we’re seeing an increasing flow of press coverage and research.

I find no better examples of these two developments – bipartisan concerns and savvy scrutiny – than in the actions of some of our youngest politicians:

The youngest member of the House is the media-friendly Democratic US Representative, Alexandria Ocasio-Cortez. Ahead of Mark Zuckerberg testifying two weeks ago, she went to Twitter to learn more about the issues and asked the public for good lines of questioning. Her engaged constituents dutifully replied with more than 12,000 responses.

With this input, her questions of Zuckerberg captured significant attention and highlights spread through Twitter receiving millions of views. We witnessed a representative using Twitter to gather input to question one of the most powerful people in the world and then to move the discussion further along after the hearing. Simply put, she came of age with the Internet and social media and knows how to use it.

The youngest member of the Senate is Missouri’s Republican Senator, Josh Hawley. I played his grilling of a Google policy executive for attendees of the World Media Congress. The audience was clearly pleased to see a Google executive being expertly questioned about concerns ranging from antitrust to child safety and privacy.

Chumming the water

These matters continue to drive down consumer trust in Facebook and Google. Unfortunately, this is where we confront an uncomfortable dichotomy between the interests of advertisers and the public. To date, advertisers are still drunk on the precision targeting, efficiency, and scale that Facebook brings to the table. 

As such, they’ve been willing to avert their attention from the growing body of research that shows that the perception of environment seeps into advertisements presented there. In the right context, that’s a good thing. In the wrong context, irreparable brand damage can occur.

Shark tale

The sailing is not smooth for publishers right now. While digital offers incredible opportunities for consumer engagement, audience interaction, and innovation, the market is reacting having been driven to the brink by the dominance of a few predatory players.

But it’s time to take the offensive and go on the hunt. There’s blood in the water and a frenzy of scrutiny buoyed along on a tide of changing consumer perspective. We need to focus on the opportunities emerging amidst this political and public scrutiny of the way in which information is being distributed and data is being collected and deployed.

DCN member research shows considerable growth in non-advertising revenues driven primarily by subscriptions and direct-consumer revenues. DCN’s public research, further confirmed by recent News Media Alliance research, also shows that most digital subscribers are happy with the value they’re receiving and at the same time are not concerned about how much they’re spending in any given month. These are two very good things: Consumers are happy with the value and not closely tracking what they’re spending. I smell opportunity in the water. The launch of Disney+ last week for $6.99 per month saw more than 10 million customers sign on in the first 24 hours. That’s a clear testament to this dynamic. 

Open water

With all of this in mind, there are four things I encourage everyone to focus on as we continue to build safe and sustainable businesses. First, know that trust is the currency our industry must capitalize on. Publishers can take their uniquely trust-based consumer relationships and brand safe environments to the bank. Second, premium publisher brands add considerable value to any platform. This is evident in the $100 million Facebook spent to entice publishers to participate into its latest foray into news. Third, media’s revenue mix is changing. Publishers are doubling down on consumer revenues and it’s paying off. And fourth, direct relationships win, and data is very much a part of this equation.

Above all, publishers need to maintain their trust-based relationships with consumers. They must protect their data and ensure that under emerging privacy laws, Facebook and Google don’t find ways to circumvent these protections and continue to vacuum up consumer data outside of their expectations. We must continue to illuminate these behaviors when we see them, and to build the next wave of digital innovation as the tide turns against the Duopoly.

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