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Advertising | Diversity, Equity & Inclusion | Featured Post | Innovation | Policy

Amid AI, ads and antitrust, press power holds the spotlight at DCN Summit

At the 2024 DCN Next:Summit, held February 7th – 9th in Charleston, SC, senior executives from DCN’s member companies discussed the biggest issues and opportunities impacting the future of media. It was fitting that CEO Jason Kint opened the event by reflecting on the human agency, energy and collaboration that drive the industry forward.

“Let’s face it, algorithms can’t write a Pulitzer Prize winning exposé. They can’t tap out a heart-wrenching screenplay or build a company culture that thrives on innovation, inclusion and empathy,” he said. “We all understand that algorithms crunch data. Tech is very much part of our future. But it’s the human creativity spark that ignites us all.”

As the industry navigates the ever-changing media landscape–which continues to be shaped by technology–Kint reminded attendees that it’s not machines, but humans, who will write the next chapter of our collective story. While he pointed out that media organizations must be positioned to best-leverage and benefit from emerging technologies, Kint emphasized the critical role of those gathered at the Summit, particularly as they guide the teams they lead.

The impact of generative AI

Unsurprisingly, a broad theme of the event was the many ways publishers are approaching, using, experimenting with and challenged by generative AI. On that note, Todd Krizelman, CEO and co-founder of advertising intelligence platform MediaRadar, said his company approaches AI from two directions: the business and editorial sides of media. For him, AI is the most exciting part of his business, and the media business, right now. “Many companies will be testing the kind of stuff we are, but I do think it is a genuine opportunity,” he said.

Rafael Urbina-Quintero, the chief operating officer of ViX at TelevisaUnivision Inc. told Axios media reporter Sara Fischer that his company is starting to experiment with short form content using AI to do translation. “We have certain properties that travel really well.” 

Kedar Prabhu, vice president of ad product and technology at Dow Jones, explained that Dow Jones uses AI for audience lookalike models and contextual targeting in ad tech. The company is also looking at use cases for AI including translation, voice transcription, personalization and video production.

POLITICO is focused on using AI to improve its subscriber experience. Goli Sheikholeslami, CEO of POLITICO Media Group explained that, while POLITICO has tens of thousands of legislative bills on their platform, only about 40% of them had summaries. However, “over the last three months, we’ve now taken all of our bills and through AI, now provide summaries for every single bill that’s on the platform,” Sheikholeslami said. POLITICO is also looking into how to use AI tools to help journalists do their jobs better and improve workflows that allow them to do more value-added work.

Andrea Brimmer, chief marketing and public relations officer at Ally Financial said that they are not only testing the Ally.ai platform, a large language model for campaign development, they’re also using AI to keep up with consumers’ “insatiable” demand for content on their Conversationally blog. 

However, as many echoed throughout the event, AI is a powerful tool, best employed wisely by people. “We’ve used AI to make our writers more proficient to accelerate the amount of content that we’re able to put out into the atmosphere,” Brimmer said. “But, the difference at Ally is everything’s got to have a human touch. So, everything that we do has a human in the center of the transaction.”

In general, both speakers and attendees made it clear that despite AI’s huge potential value and use cases, they have concerns. “There’s a gap between tech capability and business value that is yet to be crossed, in particular when it comes to generative AI. I expect that, given what we’ve seen, we will eventually cross that gap, but we’re not there yet,” Prabhu said.

AI can be a powerful tool for making decisions, predictions or completing tasks. However, it is critical to keep in mind that it is not immune to problems like racism, sexism, ableism, explained author of More Than a Glitch, Meredith Broussard, who is an associate professor at the Arthur L. Carter Journalism Institute of New York University. 

Problematic platform partnerships

From Apple, to Samsung, Facebook, Google or Amazon, publishers and brands seek partnerships with platforms because it helps drive revenue, build audience and market share. However, these days everyone is approaching platform partnerships with caution.

The Weather Company is very selective in the partners that they’ll partner with, explained CEO Sheri Bachstein. She added that they have partnered with Apple, Samsung, Facebook and Google, which helps extend their brand. Platforms add value, drive revenue and add the ability to create more segmentation, Bachstein said. “So, you make a decision strategically, ‘I’m going to partner with this person versus for this data’ to drive your business.”

Brimmer explained that Ally Financial has been somewhat tepid on platforms. “We use platforms episodically. Until we feel comfortable that all brand safety measures are in place, there are platforms that we will just stay away from,” she said. 

Indeed, as Paramount COO Steve Ellis put it, in many ways “it is not an even playing field when we talk about platforms because we have to abide by a whole different set of standards as a premium company.”

Marketing and advertising to culture

While coping with cookie depreciation was a recurring theme, the subject of equitable and diverse advertising was also a topic of much discussion. As Axios’ Sara Fischer pointed out, the media industry still lacks systems and processes to support marketing and advertising to culture.

TelevisaUnivision COO Rafael Urbina-Quintero, whose over-the-top streaming service ViX targets the 600 million Spanish-speaking market, agreed. It’s a huge opportunity for the company, which has a large share of the broadcast market in Mexico and about 60% of the Spanish-speaking market in the US. 

Urbina-Quintero explained that the company has developed an entire creative services unit to help advertisers create pieces that allow them to effectively market to these audiences. “It’s a massive opportunity where you’re talking about over a trillion dollars in purchasing power, and one of the fastest growing parts of the population.”

Ally Financial’s Brimmer said that, over the past several years, the company has been focused on ensuring that women’s sports get a fair deal. While women’s sports have grown in popularity, they still received a fraction of the marketing investment and sports media coverage. With this in mind, in May 2022 the company committed to spend equally on men’s and women’s sports within five years, and is poised to reach its 50-50 goal ahead of schedule–by the end of this year. 

Becoming a champion of women’s sports has been more than a feel-good project for Ally, according to Brimmer. She pointed out that it takes a lot of effort, funding and differentiation to break through in sports. So, leaning into women’s sports gave Ally Financial the opportunity for disruption. 

She said that the company could see that “the moment for women’s sports was really coming [and asked] ‘how can we naturally and authentically integrate into that to be one of the brands that can punch above our weight, especially in this highly complex media ecosystem?” The decision has paid off. Brimmer says that the company “finished last year with the highest level of all of our KPIs in the history of our company, highest level of awareness ever in the history of our company, highest level of positive brand sentiment ever in the history of our company…the earned media impressions alone have been staggering.”

As Paramount COO Ellis described, there’s an opportunity being missed in which marketers can align their messaging and actions with underrepresented communities. “It speaks to how entrenched processes and systems are,” he said. “We have to change processes to change the outcomes and I don’t think we’ve done nearly enough as an industry to change how we market to culture.” 

Antitrust action

Platforms are coming under heavy scrutiny in 2024. Just last month, the Federal Trade Commission (FTC) launched an inquiry into big tech companies including Alphabet, Amazon.com, Microsoft Corp, and their investments in AI companies OpenAI and Anthropic PBC.

The inquiry will examine the relationship between some of these big tech companies and newer AI firms that they’ve been investing in, explained FTC Chair Lina Khan in a live-streamed interview with Axios’ Fischer. Khan says the agency is asking “Are there certain expectations of exclusivity? Are there certain rights to board seats, or other mechanisms influencing business strategy or direction of innovation?”

Historically, at technological inflection points, you have potential paradigm shifts in the technologies that are available can be enormously important for opening up markets and injecting competition and disrupting existing incumbents, Khan said. “We just want to make sure that these relationships and partnerships are not being misused to undermine competition.”

In a session recorded for The Verge editor Nilay Patel’s podcast “Decoder,” Jonathan Kanter, Assistant Attorney General for Antitrust at the department of justice, set the stakes even higher. “News and journalism is the raw material of our democracy and the marketplace of ideas is vital to a thriving… democratic free society.” Therefore, his work examines whether monopolies have arisen, or are poised to, which threaten the health and survival of the news media.

As Kanter described it, “if monopolization and harm to competition is harming journalism, it means that companies can’t invest in original journalism in the kind of reporting and infrastructure that is necessary, not just on a national level but on a local level, to keep our country free of corruption, to make sure that our political discourse is well-informed, to make sure that people can learn about exciting new things, to make sure that we can vote in an informed way. It’s hard to imagine something that’s more important, more critical to the fabric of our nation.”

Press freedom, democracy and the human cost of doing journalism

Throughout the program, storytellers from around the world discussed the human cost of journalism, and the need to unify as an industry to protect journalists and the right and responsibility of the media to speak truth to power. 

Paul Beckett, assistant editor at The Wall Street Journal, detailed the work he and a wide team from the WSJ and others are doing to release his reporter Evan Gershkovich, who is being detained in Russia. He emphasized that it is up to the entire industry to protect journalists from forces that would stifle the free press. “It has ripple effects and, at its broadest, it is an attack on one of the great freedoms,” Beckett said. 

Rappler CEO and 2021 Nobel laureate Maria Ressa discussed her ongoing efforts to hold the line on press freedom with Pivot podcast co-host Kara Swisher. She also explored her 10 point plan to support journalism. “In 2021, I compared what tech did to an atom bomb exploding in our information ecosystem… because it’s changing the cellular level of democracy. It’s only gotten worse since 2021,” Ressa said.

In 2024, at least 64 countries (including the European Union) will hold national elections. That’s almost 50% of the world’s population.  “Since we don’t have integrity of facts, how are we going to have integrity of elections?” Ressa pointed out. 

She called for publishers to stop competing with each other when it comes to larger issues of misinformation, disinformation, and the impact of dominant platforms on the media industry and society as a whole. While she recognizes that news organizations vie for audiences, Ressa believes there are areas where collaboration is critical. “I know that we cannot continue competing against each other because we’re on the same side of facts,” said Ressa. “We’re on the same side of a shared reality, right? Collaborate, collaborate, collaborate.”

Amid the attacks on the press by those in power, it’s important that the press behave as professionals, not combatants, former Washington Post Executive Editor Marty Baron explained to the audience. “I think one of the critical things for us is to actually persuade the public that we’re giving them information… that we’re not just participating in ideological or partisan warfare,” Baron said. 

People shape the future

As digital media progresses with artificial intelligence, navigates platform partnerships, protects democracy, and markets to new cultural opportunities into 2024, it’s clear that the future of the industry lies in its people. As DCN CEO Jason Kint remarked, “it’s in the hearts and minds of extraordinary individuals who make up our membership, it’s the humans who uncover the truths, who amplify silenced voices and who hold the powerful accountable.”

Policy

The future of journalism – defining copyright in the age of AI

On January 10, 2024, the Senate Judiciary Committee’s Subcommittee on Privacy, Technology, and the Law held a hearing titled “Oversight of A.I.: The Future of Journalism,” kickstarting legislative activity on AI for 2024. The central question of this hearing wasn’t whether copyright law covers AI, most witnesses and members of Congress seemed to agree that it does, it was whether existing law properly and effectively protects AI’s infringement on the intellectual property of journalists. As Subcommittee Chairman Senator Richard Blumenthal (D-CT) stated, rights need remedies, and for these remedies to be effective, they must be enforceable. It was that effectiveness and enforceability that was the true centerpiece of this Congressional discussion.

The witnesses at the hearing were: Danielle Coffey, President and Chief Executive Officer of the News Media Alliance, Jeff Jarvis, Tow Professor of Journalism Innovation at the CUNY Graduate School of Journalism, Curtis LeGeyt, President and Chief Executive Officer of the National Association of Broadcasters and Roger Lynch, Chief Executive Officer of Condé Nast.

For senators, a sense of urgency

During his opening statement, Senator Blumenthal (D-CT) highlighted the importance of this subject and this hearing, touting it as critical to democracy. Careful not to vilify the possibilities awarded by AI, Senator Blumenthal argued it is essential for reporters and readers to be able to reap the benefits of AI while avoiding its pitfalls. Nonetheless, he clearly called out how the rise of big tech and generative AI has led to the decline of the news industry, with the hard work of authors being utilized without credit or compensation.

Evident in Senator Blumenthal’s remarks was a sense of urgency, as he expressed that it was essential that Congress learn from their mistakes in tackling social media. He also floated several areas of consensus around the topic of AI, such as licensing, transparency, incentive structures for companies to develop trustworthy products, limiting big tech’s monopolistic practices when it comes to advertising, and clarifying that Section 230 does not apply to AI.

As a refresher, Section 230 of the Telecommunications Act of 1996 states that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Since coming into effect, Section 230 has granted websites and social media companies immunity from liability for content posted on their platforms by others.  

It is no surprise that several of these areas of consensus are present in legislative proposals introduced by Senator Blumenthal. In 2023, he, alongside Subcommittee Ranking Member Senator Josh Hawley (R-MO) introduced the “No Section 230 Immunity for AI Act”as well as an AI Legislative Framework which tackled licensing regimes, transparency, and trustworthiness.

In his opening statement, Senator Hawley echoed Senator Blumenthal’s sense of urgency in protecting the work product, data, and information of consumers, at a time when the largest tech companies attempt to monopolize these areas.

For witnesses, a (somewhat) clear solution

Across the board, the hearing’s four witnesses illustrated the invaluable contributions the news industry has made to society. Danielle Coffey, Curtis LeGeyt, and Roger Lynch all agreed that licensing agreements are an essential component in combating the risks AI poses to the industry.

Coffey highlighted that such agreements could help avoid protracted uncertainty in the courts, while LeGeyt and Lynch raised how licensing agreements have become standard practice in the music, radio, and local television industries. Jeff Jarvis was more optimistic about the positive use cases of AI in the industry and advocated for the measured embrace and implementation of AI in journalistic practices.

A fork in the road for the industry

Following witness testimonies, committee members expressed their support of licensing agreements as a solution to some of the copyright issues raised by the interaction between AI and the news industry. Even more so, several committee members expressed their eagerness to tackle the issue directly and immediately.

Senator Mazie Hirono (D-HI) inquired whether Congress needed to enact legislation for these kinds of licensing procedures to be implemented, while Senator Blumenthal stated that when it comes to both licensing and Section 230 issues, Congress has an obligation to clarify current law, ensure that licensing is legally required and reinforce the inapplicability of Section 230. Somewhat surprisingly, it was some of the witnesses who pumped the legislative breaks on these comments. Regarding Senator Hirono’s comments, LeGeyt argued that such Congressional action would be premature while Coffey stated she believed the industry would prevail in addressing these issues through pending litigation.

What is undeniable, is that 2024 is set to be a landmark year for Congressional action on AI, and that copyright issues offer legislators a path to AI “victory” that is targeted, discreet, and not overtly controversial. Because of this, regardless of what was advocated for in this hearing, members of Congress can be expected to at the very least attempt to “clarify” the applicability of existing copyright law to generative AI models. Of course, the distinction between a limited clarification of current law and the outright enforcement of these types of agreements is up to legislators.

While witnesses adamantly made the case that copyright law is on their side, legislators continuously expressed concerns with the efficacy of existing protections. Going back to Senator Blumenthal’s statement, about rights needing remedies that are effective and enforceable, participants agreed that the rights of journalists certainly exist in copyright law, but for legislators, efficacy and enforceability need an extra push from Congress to come to fruition.

Looking towards 2024, with copyright litigation in its nascent stages, the digital content industry may certainly find relief in the legal system but would be wise to hedge some of its bets in the hands of legislators who seem keen on engaging with this industry-defining issue.

Featured Post | Policy

Apple flouts ruling to flex its monopoly power

Big tech monopolies face a regulatory reckoning right now. One area of intense scrutiny is the ability of these companies to exert their market dominance in ways that extract sky-high profits while limiting the ability of other companies to sufficiently monetize their offerings. The four-year legal battle between Epic Games and Apple vividly illustrates these issues. Of course, Epic is far from alone in believing that Apple’s stronghold on the app marketplace is what allows it to extract a 30% cut from every in-app purchase.  

Earlier this month, a federal court ruling officially asserted that Apple had violated California competition law by limiting the ability for app developers to point consumers to alternative payment systems that offer lower prices and fees. But almost immediately, Apple announced a brazen new approach to extend the charging of exorbitant fees on purchases even when those purchases are made outside of Apple’s walled garden – in direct contradiction with the spirit of the court’s ruling.

Once a company known for breathtaking, innovative technological advancements, this is now a company laser-focused on maintaining its stronghold on the app market. While we might see little else to applaud from Apple, we have to marvel at the breathtaking chutzpah of its legal team. At the same time, the ability of one company to manipulate the market – and the legal system – so openly demonstrates the need for a stronger legal framework.

Epic battle

Epic’s battle against Apple (and Google) has come to epitomize app developers’ struggle to sustain their businesses given that the distribution marketplace is so heavily weighted in the favor of big tech. Since 2015, Epic Games’ founder and CEO Tim Sweeney has questioned the need for digital storefronts to take a 30% revenue share cut. He reasoned that this not only unduly affected the ability of developers to monetize their offerings, but that it drove price increases that ultimately impacted consumers.

In 2020, when Epic first filed suit against Apple, Sweeny pointed out that “Apple has locked down and crippled the ecosystem by inventing an absolute monopoly on the distribution of software, on the monetization of software.”

In 2021, US District Judge Yvonne Gonzalez Rogers ruled in favor of Epic that Apple’s policies prevented consumers from getting cheaper prices and, thus, violated the California Unfair Competition Law. Then, in 2023, the Ninth Circuit Court of Appeals affirmed the ruling. When the Supreme Court recently refused to take the case, the ruling became final.

Monopolists gonna monopolize

This legal ruling seems to have done little to dissuade Apple from its monopolistic practices, however.

Last week, Apple announced they would charge a 27% fee on all charges outside of their payment system and 12% on all recurring charges. That’s a 3% reduction from the fee they take on charges within their payment system. Given that third-party payment systems typically charge 3% to 6%, Apple is ensuring that developers will never be able to offer consumers a viable, cheaper option outside of Apple’s walled garden. Perhaps even more appalling is that Apple’s proposal amounts a massive land grab where they could start collecting nearly a third of all consumer web transactions.

It’s important to note that Judge Gonzalez Rogers and the Ninth Circuit called out the shortcomings with current federal competition law when they ruled against Epic’s claims that Apple had violated federal law. In their 2023 ruling, the Ninth Circuit said, “There is a lively and important debate about the role played in our economy and democracy by online transaction platforms with market power. Our job as a federal court of appeals, however, is not to resolve that debate — nor could we even attempt to do so. Instead, in this decision, we faithfully applied existing precedent to the facts.”

The Ninth Circuit ruling clearly underscores the need for new federal law to ensure a level playing field for existing and new market players. The Open App Markets Act, the American Innovation and Choice Online Act, and the AMERICA Act are vital to updating competition law in the US so that true competition can flourish and consumers can benefit from lower prices and continued innovation.

As if there weren’t enough headlines about big tech companies thumbing their noses at anyone who would suggest they need to be held accountable, Apple’s latest move should remind and inspire Congress to finally enact new, stronger guidelines to curb the pattern of abuse by big tech platforms.

Perspectives

What media tech execs are focused on in 2024

The past several years have seen media companies accelerate their revenue diversification, though. We’re also witnessing an increased pace of innovation and spirit of experimentation. That, coupled with crumbling cookies and proliferating privacy regulation means the media marketplace looks much different than it did just a few years ago.

We reached out to some of our supporter partners here at DCN and asked about the biggest trends, challenges, and opportunities they see as we start off the new year. (DCN supporter partners are companies that do business with premium publishers and are aligned with principles of quality and trust.) Below, these media tech leaders offer their perspective and insights on what’s ahead.

Industry trends to watch in 2024

Transformation of the advertising ecosystem

In 2024, we’ll see the rise in importance of premium publishers. Cookie deprecation, fraud, and “reject all” are forcing a rethink of how digital advertising works. This creates a massive opportunity for premium publishers that invest in creating quality content and a quality brand to build closer connections with advertisers. And as more spend goes to premium publishers, they can invest more in quality content, creating a virtuous cycle. The result will be a higher-quality open web.

The industry is coming to the realization that advertising without third-party cookies will be better than advertising with them. The industry will be forced to find an alternative in 2024, so we’ll finally see an advertising ecosystem that works for those who bring value, where publishers remain in control of their data and revenue, advertisers maximize spending and build their brands, user experience improves, and consumer privacy is respected.

—Aly Nurmohamed, COO, Permutive

The ad market has been on shaky ground in 2023, but the New Year brings new opportunities. Cookies finally fading into the sunset will negatively impact third party data signals in Open Auction. This provides tremendous opportunity for publishers that can offer differentiated first party audiences at the scale that advertisers desire.

Buyers will need to go to publishers directly so that they benefit from these trusted audience signals.  As Open Auction revenues dip, publishers will need to invest in direct sales, which takes money and effort. Ultimately this will drive revenue growth beyond previous levels so it’s critical to remember that disruption may be uncomfortable in the short term, but it drives innovation as well.

—Chris Guenther, COO, ArcSpan Technologies

With the increase in media consolidation and ad class types, many media companies now represent multi-faceted and valued inventory. As a result, they find themselves maximizing the value of tried and true blue chip inventory, such as premium CTV, but also emerging platforms and media, such as podcasts and non-linear derivative video.

With unequal market demand around these varied inventory types, one of the biggest opportunities in 2024 will be leveraging the power of data targeting and audience segmentation as a vital equalizer for this mass of supply currently undervalued by the market. 

—George Blue, Head of Publisher Partnerships, Equativ 

The impact of AI innovation

AI is disrupting the media industry in an extremely impactful way. And, due to the many opportunities it continues to present, we can expect it to spawn its own industry in 2024. This new sector will take the form of not only new products, but of bolder innovation brought on by elevating AI specialists to the business’s leadership. Expect to meet plenty of newly elected AI officers, and for dedicated AI consultancies to emerge on every show floor. Additionally, the new AI industry will emerge into two tiers of service: specialist AI tools, trained on an organization’s owned data, and generalist AI tools that are less sophisticated and more user friendly. The former will bring the greatest value to a business, providing them with a competitive edge for the industry at large. 

—Alexandra Theriault, Chief Growth Officer, Lotame

It’s hard to overstate the impact AI will have on society and publishing. Many media companies are experimenting with using AI currently. In 2024, we will see this tech weaving its way into the day-to-day. I am excited to see how our industry’s use of this technology expands. AI introduces opportunities throughout publishing – from content creation to optimization of distribution and advertising.

—Todd Krizelman, CEO, MediaRadar

When it comes to news reporting, the greatest opportunity in 2024 lies in leveraging AI and other technology to streamline processes aimed at discerning user preferences. This involves identifying user needs, pinpointing the optimal timing for news consumption, and determining preferred formats such as mobile-optimized content, short story formats, live blogs, graphs, and video imagery. By harnessing AI, newsrooms can strategically allocate their resources, focusing on creating stories that not only garner increased media attention but also foster increased audience engagement, commitment, and brand loyalty.

—Naomi Owusu. CEO and Co-Founder, Tickaroo

We’ll see AI-driven solutions that can analyze vast amounts of data to deliver more effective and efficient advertising campaigns. This will not only enhance the user experience but increase the ROI for advertisers. With increasing concerns over privacy and data security, developing innovative solutions that balance personalization with privacy will be crucial.

—Simon Klein, Global SVP Supply, Teads

Privacy, please

Moving forward, we’ll see a focus on passing data between buyers and sellers in a way that respects users’ privacy. Programmatic infrastructure has been built today for buyers and sellers to trade on user IDs. As privacy moves front and center, buying and selling ‘cohorts’ of users will become the norm, and innovation will come from making the best use of cohorts to drive advertiser outcomes.

—Aly Nurmohamed, COO, Permutive

AI has the potential to greatly improve efficiency, personalization, and discoverability while expanding the accessible market for publications. However, it will be interesting to see how these tools evolve and are used in practice as we navigate moral and privacy concerns that come with the technology.

—Todd Krizelman, CEO, MediaRadar

I am going to be an unabashed optimist here and say I am most excited for a national privacy law, mostly because our current path is unsustainable. According to the IAPP US State Privacy Tracker, as of Dec. 1, 12 states have passed comprehensive privacy laws, nine states have active bills in committee, 14 states have inactive bills, and 15 states have not introduced a privacy bill. It’s a mess. How are publishers, media buyers and intermediaries supposed to operate in this environment? Let’s stop this madness and introduce a national privacy law that works for all sides of the industry and consumers.

—Richard Murphy, President, Alliance for Audited Media

This year, it’s personal

In 2024, a major innovation set to redefine user engagement with newsrooms is the continued evolution of personalized updates across digital news sites. Following the lead of social media channels and search engines, this advancement allows readers  to receive tailored content based on their preferences and behaviors. Newsrooms have begun to embrace this trend, delivering more precisely curated content, and the sports sector has already demonstrated the power of granular customization.

Looking ahead, we can expect even more sophisticated algorithms and machine learning, enabling platforms to provide an increasingly seamless and enjoyable user experience. This hyper-personalization not only enhances engagement but also opens new possibilities for businesses and content creators to connect with their audiences in unprecedented ways, shaping a more relevant and engaging digital landscape in 2024.

—Naomi Owusu. CEO and Co-Founder of Tickaroo

In 2024, harnessing the power of artificial intelligence and machine learning to offer highly personalized and engaging ad experiences while respecting user privacy will be critical. I’m particularly excited about the potential of CTV. CTV is revolutionizing TV advertising by allowing for personalized and interactive ad experiences, tailored to viewer preferences. This personalization enhances viewer engagement and ad campaign effectiveness.

—Simon Klein, Global SVP Supply, Teads

Experiment to excel

While interest in advertising on streaming platforms is growing, marketing budgets are not expected to increase in 2024. This means intensifying competition. To remain competitive and attract viewers, traditional publishers are likely to feel more pressure to innovate and experiment.

In the broadcasting world, we are already seeing novel ideas and formats from players such as Channel 4 and NBCU’s Peacock. Ad breaks, ad load, and programming are being reshaped and refined. Broadcasters are testing dynamic adverts and are decluttering content to balance campaign impact with quality viewer experience.

The outcomes of these experiments will shape the future of premium video. Thus, today’s challenges may soon give rise to exciting opportunities for both media companies and advertisers — all thanks to the experimentation we will see in 2024.

—Virginie Dremeaux, Vice President, Marketing and Communications, International, FreeWheel

A major innovation that I anticipate in 2024 is the increased integration of augmented reality (AR) and virtual reality (VR) into digital advertising. These technologies are poised to transform the way brands interact with consumers by offering them immersive and interactive experiences. Imagine a world where consumers can virtually try on clothes or test products in a simulated environment before making a purchase. This not only elevates the consumer experience but also opens up new creative avenues for advertisers to engage with their audience.

—Simon Klein, Global SVP Supply, Teads

Ad spending across retail media properties and audiences is expected to reach $45 billion in 2023, creating an opportunity for publishers who can bridge content and commerce to capture a healthy piece of that growing spend. In 2024, we expect to see publishers in a strong position to compete with retail media as they introduce shoppable moments into the user experience and build out libraries of commerce-powered content to fuel full-funneled shopper journeys.

Because media companies have direct – and highly trusted – relationships with their audiences, they make natural merchandisers, having incredible power and editorial insights to curate products and experiences for their customers with the goal to maximize sell-through for advertising sponsors. Sure, retailers may have a lot more experience pushing products but as they build out their advertising offerings, they also build the case for commerce media where publishers will shine.

—Kevin Boyrivent, Director of Product Strategy, Supply Solutions, Criteo

Revenue remains the top priority for 2024. But when it comes to advertising, publishers will need to continue to experiment, innovate, and invest in their infrastructure. Publisher-controlled contextual will be key to unlocking greater monetization opportunities in 2024. These signals will be far more sophisticated than the current contextual signals provided by third parties that are high level and frequently inaccurate. Dynamically created advanced taxonomies that support a publisher’s data strategy will offer more granular and relevant contextual signals.  This will ultimately allow publishers to offer more effective advertising options that can only be accessed via a direct relationship. 

After a challenging year for the industry, conversations have highlighted for us that publishers have a clearer sense of priorities and opportunities for 2024. Publishers are going to invest smartly to enhance their data assets to support use cases across advertising, product experience and content creation. It will be exciting to see how that drives new revenue growth and puts the sector in a better position to help advertisers achieve their KPIs and their users to have great experiences.

—Chris Guenther, COO, ArcSpan Technologies

Featured Post | Perspectives | Policy

Reputation matters. Don’t bend under platform pressure

People are increasingly opting out of the news. According to the Digital News Report 2023 from Oxford University’s Reuters Institute, 36% of people around the world sometimes or often actively avoid news. So it is no surprise that “news avoidance” has emerged as a hot topic among academics who study news media. It’s a growing problem, with major implications for society. 

In fact, this topic was chosen as the main theme of the pre-conference at the 2023 International Communication Association (ICA), the largest conference in the field of communication. The event was packed with speakers and attendees who poured over analysis and future predictions. Presenters cited numerous studies that show that those who don’t read the news are less likely to vote and feel detached from the community. 

Unsurprisingly, there is no simple solution to this crisis. However, there was a general consensus that there’s a need for an increase in public assistance, education, and policies that support news media. 

But ask yourself: If there were public funding available to support news as a public service, would your organization qualify? Are you providing quality news? Or have you fallen prey to algorithmic enticements to chase clicks?

An alarming trend

The news avoidance trend has been underway for a long time, driven by several factors. For one, people are overwhelmed with the sheer volume of information. They also feel worn out by a constant flow of grim news, which is cognitively exhausting. And let’s face it – from TikTok dance challenges to cat memes – there are a ton of entertaining alternatives for people to tune in to online.

But while people are enjoying entertaining content on their social feeds, they are also consuming news on these platforms. Or at least they think they are. 

People have developed a news-finds-me (NFM) mentality, which creates the illusion that they are well-informed about important news even when they are not. Because they have access to news (or a facsimile of it) through social media any time and all the time, people falsely believe important news will find them. 

This becomes particularly alarming as we increasingly see social and search platforms actively back away from news brands. A New York Times article points to actions and announcements by the likes of Meta (parent to Facebook and Instagram), X (aka Twitter), and even Google that make news less visible. 

For news publishers, these converging trends point to a shrinking audience and a fiercely competitive environment for attention. 

Attention-seeking behavior

One temptation is writing for eyeballs. Anyone vying for attention online knows that clickbait, rage-bait, and sensational news perform well in the digital marketplace. Arguably, social platforms incentivize this type of content. 

Sadly, low-quality content typically outperforms high-quality news in terms of today’s measures of ROI. Sensational stories, aggregated news, and gossip are cheap to produce and easy to spread. 

Even more worrisome is the fact that numerous studies (including mine) have found that false information spreads more quickly and widely on social media than true information. Unlike quality news reports, which are bound by facts, fake news and titillating stories can be created solely to capture audience attention, with whatever claims or sensational statements capture the most views. 

So how can genuine news compete in this marketplace of attention? The playing field seems rigged in favor of hyperbolic sludge. 

What we are observing today is a systematic problem that no single innovative business model can break through. It is a combined result of a vicious news cycle, distracted consumers, the dominance of platforms, and more. At least the growing journalism crisis provides a clear call to action. Media scholars even say that fake news is the best thing that’s happened to journalism. It allows high-quality news media to shine.

But while scholars continue to see the value of quality news, the trend of news avoidance among general audiences continues. Not only is it critical that we find a means to support the production of quality news, but we must also figure out how to re-engage audiences with it. 

Solutions for journalism

From growing cries for social platform reform to tax-based and remunerative approaches, there are voices demanding public interventions to support sustainable news. In the U.S., legislation designed to support local news is increasingly popping up in Congress and state legislatures. 

Given their dominance in the consumption of news, platforms should be pressured to incorporate measures of news quality into their ranking algorithms. Currently, several projects such as the Trust Project and NewsGuard provide credibility measures of news sites to elevate quality news. 

Media literacy programs also offer some promise for publishers, as they emphasize the reputation of sources. For example, some university and local libraries keep track of reliable news sources and share the lists with residents. 

In the meantime, news publishers must stick to the core values that are the foundation of journalistic work. Of course that is easier said than done given all the systematic obstacles listed above. The unfortunate reality is that quality news is expensive to produce. And, from the available metrics, this so-called high-quality news is not sufficiently valued in the marketplace.

However, reputation matters in the media business. Therefore, competing on the social platforms’ terms – with eyeball-chasing clickbait – won’t solve the attention deficit and will likely only exacerbate the misinformation problem (as people skim misleading headlines). While publishers may have to pivot to what’s working on social platforms (video, for example), they must not sacrifice core standards. 

In the post-truth era, trust is the most valuable capital. Maintaining journalistic quality is the only way to protect the business in this tumultuous time. News providers are wise to remember that reputation is difficult to build but easy to destroy. 

About the author

Jieun Shin (Ph.D, University of Southern California) is an Assistant Professor in the College of Journalism and Communications at the University of Florida. Her research explores information diffusion on social media focusing on misinformation and news use.

Featured Post | Policy

Publishers and platforms face off over the value of news

Internationally, regulators are increasingly taking measures to address the impact that platforms have on the news business. In response, big tech platforms are trying to make the case that news is not central to their popularity or success, and going so far as to block news and political content in the face of new journalism-funding regulations taking shape around the world.

“This is now a global phenomenon and big tech platforms like Meta and Google can’t keep using bullying scare tactics. They have to show up and be prepared to negotiate meaningfully,” according to Jordan Guiao, research fellow at The Australia Institute’s Center for Responsible Technology.

Lawmakers in many different jurisdictions have begun to respond to the critical damage big tech platforms have inflicted on the funding model of the world’s media business. Those steps include the News Media Bargaining Code in Australia, the Online News Act in Canada and the proposed Journalism Competitive and Preservative Act in the U.S. (which Digital Content Next has endorsed). These laws are designed to mandate these tech companies to compensate publishers for the inclusion of the news content that is shared, or found their platforms. 

To bolster its position, Meta points to a study it commissioned from NERA economic consulting group which concluded that having platforms pay for news content wasn’t justified. However, advocates for the media industry dispute the accuracy of the findings. 

“People who consume news tend to spend a lot of time on a platform,” said Paul Deegan, chief executive of Canadian trade association News Media Canada. “They go there for news. They come back for more. They’re an attractive demographic in terms of skewing higher on educational attainment and income.” 

“Just in terms of value, [big tech platforms] get tremendous value from news,” he said.

Devaluing the news

However, according to Instagram chief Adam Mosseri: “[F]rom a platform’s perspective, any incremental engagement or revenue they might drive is not at all worth the scrutiny, negativity (let’s be honest), or integrity risks that come along with them.”

So, in response to increasing pressure to compensate publishers for news, and their own research findings that it doesn’t provide sufficient value to them, platforms have pulled back on including news content on their services. 

In February of 2022, Facebook dropped the word news from users’ “news feed.” And in June this year, publishers noted a significant drop-off in traffic from the site, suggesting an algorithmic adjustment to devalue news. And, after the launch of Threads earlier this month, Mosseri said that the platform would not take any steps to “encourage [politics and hard news] verticals.”

Tit-for-tat

In a direct response to policy efforts platforms have gone so far as to block news content altogether. In 2021, Meta not only blocked users in Australia from seeing news content on Facebook but prevented them from posting links to any news stories, regardless of where they were published. In less than a month, the company relented and has since signed licensing deals with publishers in Australia. Job postings in the country’s media sector are up 46% as of April this year.

However, with the passage of the Online News Act in June, Meta and Google have taken a harder tack against these regulatory efforts. Already the platforms have canceled previously struck deals with Canadian publishers and have started to block news in the country. 

Reprinted with the permission of Luke LeBrun (@_llebrun) Editor, PressProgress

In February, Google conducted a test to assess the impact of blocking news access for Canadians altogether as it evaluated possible responses to the Act. The company is reportedly holding off on fully implementing its response until the regulations are made by the Canadian Radio-television and Telecommunications Commission. Since the passage of the Act last month, Meta has started to intermittently block Canadian news sources on its various services. 

According to Canadian Prime Minister Justin Trudeau, Canada has no plans to back down. In fact, they’ve taken the fight to a familiar battlefield on this issue: advertising. Publishers and the federal government in Canada have pulled their advertising from Meta’s services. Per regulatory filings, Canada accounts for $3 billion of Meta’s $117 billion in annual revenues. “The company is running the very real risk of losing more in revenue than they would pay news businesses under the Online News Act,” Deegan told the Financial Times.

The battle has escalated to news publishers rejecting Meta’s ads on their sites, which were purportedly intended to inform Canadian audiences about the news blocking initiated by the big tech platforms in Canada. 

Next steps?

Navigating what comes next will be the challenge facing both regulators and publishers. 

As of now, a version of the JCPA in California passed the state assembly in a 55-6 vote in June. Despite this, the bill has been put on hold for two years, with an initial state senate hearing scheduled for July 11 this year pushed back to 2024.

Other commentators in Canada view the contentious moves in response to early attempts to regulate the big platforms as an opportunity to further address the wider problems caused by the big tech companies.

“While the government of Canada certainly does not have the power to go back in time and block the consolidation that has occurred in the digital ad market, it is able to empower our competition and privacy commissioners to conduct an investigation into how Big Tech operates in the Canadian ad tech market,” wrote Taylor Owen, Beaverbrook Chair in media, ethics and communications, and Supriya Dwivedi, director of policy and engagement at the Centre for Media, Technology and Democracy.

As well, there’s skepticism that Meta and Google can survive the reputational risks of continuing to block legitimate news sources on their platforms.

“Essentially, I don’t see blocking of news as a viable action for Meta and Google. From the Australian perspective, the news block was a bluff, and we called them out on it. In Canada I believe this will be much the same. And if they prolong it in any way, their reputation as a platform for misinformation will only be validated,” said the Australia Institute’s Guiao. “Meta and Google need news content to legitimize the accuracy, dependability and truthfulness of the information in their platforms.” 

Featured Post | Policy

Why Lina Khan won’t back down

It’s no small thing to be named Chair of the Federal Trade Commission (FTC). Unsurprisingly, Lina Khan’s path to that position is an impressive one. Significantly, it was characterized by deep study and evaluation of monopolies and antitrust law. Absolutely everyone expected this to be central to her tenure, and she has not disappointed in that regard. With big tech companies in her sights, she’s taken on Meta for antitrust, Google for its ad practices, and Amazon for its consumer practices around Prime.

But there are those questioning Khan’s strategy of aggressively filing cases. The criticism built to a crescendo recently when U.S. District Court Jacqueline Scott Corley declined to block the Microsoft acquisition of Activision, handing a defeat to the FTC which had hoped to snuff out a potential monopoly in its infancy.

The FTC alleged that Microsoft’s acquisition of Activision (and its bevy of popular games such as Call of Duty) could lead to a dominant position for Microsoft in the gaming sector. Microsoft quickly sought to nip the FTC’s concerns in the bud by agreeing to keep popular game titles available on rival platforms. There is, however, some debate around whether or not that was enough to address competition issues.

There’s also some debate about whether Judge Corley correctly interpreted the law. Matt Stoller notes that the Clayton Act guards against mergers that “may substantially lessen competition” while Judge Corley stated in her opinion that FTC had not proven the deal “will substantially lessen competition.” Unfortunately for the FTC, the shift from “may” to “will” sets a substantially higher bar and one that courts have supported in recent history.

Corley’s decision has led numerous groups  (some of which receive an outsized portion of their funding from big tech companies) to loudly question Kahn’s strategy at the FTC. It’s a bit hard to take these Monday morning quarterbacks very seriously, however, because some of these same groups also argue at every turn to limit the FTC’s regulatory authority. Their criticism of the FTC and the Department of Justice Antitrust Division is so routine and frequent that you are left to wonder whether they envision any role for the federal government in ensuring a fair marketplace. Most, however, understand that the FTC plays a critical role in enforcing federal consumer protection laws that prevent fraud, deception, and unfair business practices—including those that are anticompetitive.

As anticipated, Khan is clearly trying to shift the courts’ interpretation of competition and antitrust law. Of her strategy, she’s unabashedly stated that “you lose 100% of the shots you don’t take.” And given her track record so far, a rumored major antitrust suit in the works against Amazon along with newly-released merger guidelines from the FTC and Department of Justice, she’s going to keep taking shots—big ones. On top of these high-profile cases, as Jessica Rich, former Director of the FTC Bureau of Competition, opined earlier this year, the FTC has seemingly shifted its focus from “whack-a-mole” enforcement to broader rulemaking efforts.

Khan’s efforts to move the FTC into a stronger enforcement position is one that reflects a global trend, as regulators around the world ramp up their competition and antitrust efforts. For example, Europe recently enacted the Digital Markets Act and Digital Services Act, which will lead to a new wave of crackdown on dominant companies. This isn’t just Kahn’s concern, or an American concern. Policymakers around the world are trying to level the playing field.

As to Kahn’s efforts to step up the FTC’s position as rule maker and enforcer, it is critical to recognize that the history of the FTC’s authority and posture is characterized by ebbs and flows. Courts and Congress have empowered or restrained the FTC at various points in our history. For most of the last 20 years, FTC Chairs have had to operate with one eye over their shoulder.

Former Chair Jon Leibowitz secured high profile consent decrees with Google and Facebook over consumer privacy violations. These decrees were heralded as landmark agreements and have also provided the FTC with access and leverage with these companies. However, it is important to note that the consent decrees were pursued instead of expensive, more risky lawsuits. Now, with the benefit of hindsight, many have criticized the FTC for not doing enough to protect consumers and prevent monopolization. And this is where Kahn’s leadership comes into play in a big way.

Changing the courts’ interpretation of competition law is not easy. But this change—modernization—happens in every facet of law, and it is necessary to adapt to new factors. Until and unless Congress can break the permanent state of gridlock, we should support Khan’s efforts to establish a more proactive and robust role for the FTC, one that can foster more healthy competition to the benefit of consumers and businesses.

Opener art: Lina Khan, Competition and Regulation in Disrupted Times, Brussels, Belgium
Used under a CC BY-SA 2.0 license. Credit: Cory Doctorow
Policy

DCN stands with global media community as Google and Meta threaten to take down news in Canada

DCN stands with publishers around the globe in reaction to Facebook and Google’s efforts to undermine Canada’s new law to help address the imbalance in market power. Digital Content Next was one of 18 media organizations worldwide that issued a joint statement on July 5, 2023 in response to Google and Meta’s threat to take down news in Canada after Canada’s parliament passed the Online News Act (C-18) in June.

In the words of Canadian Prime Minister Justin Trudeau, “This is not just a dispute over advertising, it is also dispute over democracy. It’s a question of recognizing the role internet giants—like Facebook Meta, Google and others—have in our lives and therefore the responsibility they also wield.  …this goes to the core of a free and informed society that is able to take responsible decisions in a democracy citizens need to have access to quality journalism that is properly paid.

The fact that Facebook doesn’t want to recognize the hard work of professional journalists is something that undermines the very fabric of democracy. So, Canada—and allies around the world—are going to stand strong and demonstrate that we will not flinch in our defense of fundamental foundational principles of democracy like a free, quality, informed press.”

Read the full joint statement here.

Featured Post | Innovation | Perspectives | Policy

DCN’s Principles for Development and Governance of Generative AI

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INTELLECTUAL PROPERTY

1) Developers and deployers of GAI must respect creators’ rights to their content. Developers and deployers of Generative Artificial Intelligence (GAI) systems—as well as legislators, regulators and other parties involved in drafting laws and policies regulating GAI—must respect the value of creators’ proprietary content.

2) Publishers are entitled to negotiate for and receive fair compensation for use of their IP. Use of original content by GAI systems for training, surfacing or synthesizing is not authorized by most publishers’ terms and conditions, or contemplated by existing agreements (for example, for search). GAI system developers and deployers should not be crawling, ingesting or using publishers’ proprietary content for these three stages without express authorization.

3) Copyright laws protect content creators from the unlicensed use of their content. Like all other uses of copyrighted works, use of copyrighted works in AI systems are subject to analysis under copyright and fair use law. Most of the use of publishers’ original content by AI systems for both training and output purposes would likely be found to go far beyond the scope of fair use as set forth in the Copyright Act and established case law. Exceptions to copyright protections for text and data mining (TDM) should be narrowly tailored to not damage content publishers or become pathways for uses that would otherwise require permission. 

TRANSPARENCY

4) GAI systems should be transparent to publishers and users. Strong regulations and policies imposing proportionate transparency requirements are needed to the extent necessary for publishers to enforce their IP rights where publishers’ copyright-protected content is included in training datasets. Generative outputs that use publisher content should include clear and prominent attributions in a way that identifies to users the original sources of the output (not third-party news aggregators) and encourages users to navigate to those sources. Users should also be provided with comprehensible information about how such systems operate to make judgments about system quality and trustworthiness.

ACCOUNTABILITY

5) Deployers of GAI systems should be held accountable for system outputs. GAI systems pose risks for competition and public trust in publishers’ content. This can be compounded by GAI systems generating content that improperly attributes false information to publishers. Deployers of GAI systems should be legally responsible for the output of their systems.

FAIRNESS

6) GAI systems should not create, or risk creating, unfair market or competition outcomes. Regulators should be attuned to ensuring GAI systems are designed, trained, deployed, and used in a way that is compliant with competition laws and principles.

SAFETY

7) GAI systems should be safe and address privacy risks. Collection and use of personal data in GAI system design, training and use should be minimal, disclosed to users in an easily understandable manner and in line with Fair Information Privacy Principles (FIPPS). Systems should not reinforce biases or facilitate discrimination.

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Featured Post | Perspectives | Policy

Generative AI: threats and promise for a new world

At DCN, we’ve been diving deep into Generative AI – trying to understand what it is and what it isn’t and sort through the implications for professional content creators. We have met with hundreds of executives, tech specialists, journalists, artists, and creators who work within our member companies to create and monetize premium original content. We’ve heard first-hand what the content community is excited about and what gives them pause. Based on these conversations and our own research, we see several topics around Generative AI (GAI) that merit a closer look.

Protection for creators

Generative AI systems need to be designed in a way that respects professional content creators and the value of their IP. Perhaps the biggest concern is the loss of control over the content, in which they have heavily invested. GAI systems train by using digital content such as journalism and photos. However, they also scrape that content for reuse in a variety of ways and for a variety of purposes – some of which may undermine the business model of the content creator.

While the scraping of original content for training may seem relatively benign, Generative AI companies will clearly reap huge benefits. The use of premium trusted content helps these systems understand cultural nuances and avoid problems of misinformation and factual inaccuracies. If the old axiom of “garbage in, garbage out” applies, companies profiting from GAI should appropriately value premium trusted content.

That said, scraping of content for reuse seems highly problematic as the creator might lose the ability to distribute and monetize the content as they see fit. We’ve heard stories of Generative AI systems providing subscription content to non-subscribers and amalgamations of general news content without any attribution to the organizations which funded its creation. Stripping content creators of control over their work effectively deprives them of the ability and incentive to invest in new content. It seems like there should be a win-win here where GAI systems fairly compensate and credit professional content creators for their work.

Transparency

Companies that develop GAI systems should be transparent with the public so that we can fully assess the impacts on our society and address the consequences. If Generative AI fulfills its promise, then whole industries and sectors will be radically changed. In particular, consumer experiences with news and entertainment are likely to be upended.

With all that change, intentional and unintentional consequences are likely to occur. Generative AI systems have been shown to be flat out wrong, making up convincing sounding sources or generating “quotes” and articles to back up their responses which may be misattributed to individuals, institutions, or media brands.

There is an open question about the extent that these systems could be manipulated by bad actors looking to flood the public square with misinformation. As anyone can see, the world isn’t a perfect place. And, sadly, the internet is loaded with hateful, harmful speech. More subtly, however, there are conscious and unconscious biases baked into all kinds of reporting and opinion pieces. To the extent that Generative AI systems are training on content they scrape from the web, they may be recycling hate speech or perpetuating biases.

Therefore, allowing these systems to be developed and operate in a black box would invite all kinds of problems without an opportunity to correct mistakes before they run wild. Most of the early legislation around AI calls for transparency so that regulators and researchers can assess the potential impacts and offer solutions before actual harms are committed.

Competition

The tech industry currently has a competition problem – a lack of competition to be exact. While those dominant companies are currently under intense antitrust scrutiny, there is a concern that they may use the hype cycle of Generative AI to wrongly argue that competition exists and that regulators need to back off.

But the reality is that policymakers should be watchful to ensure that major tech companies don’t extend their dominance to the AI market. Generative AI systems are expensive to create and maintain. With such a high barrier to enter this marketplace, there is a danger that the biggest, most powerful tech companies will leverage their position and unrivaled resources to dominate the nascent GAI field.

This same playbook has been used before – Facebook leveraged its dominant position to buy out the competition. Google allocated its search dominance to acquire a monopoly position in the digital advertising infrastructure. And Amazon continues to leverage its position to drive competing ecommerce platforms into irrelevance. We should be careful to ensure that GAI systems aren’t used to maintain or increase dominance in markets and that these systems aren’t self-preferencing services from a handful of major companies to the exclusion of competitors. 

TL:DR

Undoubtedly, Generative AI is an exciting new tool that offers efficiencies for artists, journalists, and other creators along with the promise of a bright new future for industries and consumers alike. And these changes are coming fast. Undoubtedly, the speed and scale of the development and deployment of GAI systems will only accelerate.

In the right hands, these new tools could revolutionize the way we interact, create, problem solve and so much more. However, bad actors also have access to these powerful tools. Therefore, problems with competition, misinformation, election meddling, and sabotage are likely to worsen.

As an industry and society, we should encourage the development of ethical guardrails to minimize the harms and maximize the potential associated with Generative AI technologies. In doing so, we can strengthen our commitment to protect consumers and incentivize new and established voices.

Featured Post | Policy

Content production policy captures the global spotlight

Discoverability, funding, IP ownership, and cultural sovereignty are topics at the forefront of how and to what degree streaming companies should be put under government regulations. As today’s over-the-top streaming platforms continue to navigate emerging domestic rules and regulations, jurisdictions outside the U.S. have started to introduce new content and funding obligations for these services.

The ability to transcend borders has long been a defining characteristic of video streaming platforms: Anyone with an internet connection could view all the content. Initially, incumbent broadcasters and traditional distribution channels faced massive disruption as consumer preference shifted away from linear channels to the choice of what to watch and listen to from hundreds of options. With the wide adoption of digital distribution technology, streaming services became content creators themselves, while traditional content producers launched non-linear platforms to compete.

As is often the case with rapid technological advancements, legislation and regulation are now playing catch up. Local players in global markets have long made the case that the playing field must be leveled against the size of U.S.-based streaming companies, and officials have started to listen. Regulations are evolving to include localized content mandates and participation in domestic industry. Here’s how it’s playing out.

Europeans make early moves

In 2018, the European Union passed the Audiovisual Media Services (AVMS) Directive which included stipulations that the streaming platforms must offer a 30% quota of European content to European consumers. It also built a framework that allowed individual countries to mandate the streamers allocate revenues back into domestic production.

Right now, France is one of the countries with strongest local content rules. Streaming platforms must reinvest 20 to 25% of the domestic revenues back into French production. In France and elsewhere in Europe, since the regulations have been in place, Netflix has reached or exceeded the 30% local content requirements. 

English language markets feel the squeeze

Because of the cultural juggernaut that is the U.S., other English-language regions have long felt compelled to shore up local production with support from their respective governments. This trend continues to be a flash point in debates about government overreach.

At the end of January, the Canadian senate passed Bill C-11 or the “Online Streaming Act,” an updated version of the country’s Broadcasting Act, which will allow the federal regulator to include international streaming services in its powers to levy fees and control how content is displayed. It’s expected to become law within a few weeks. Canadian governments have long sought to counter the influence of the cultural output south of its border, and the legislation attempts to extend those rules into the online space. 

Similarly, Australia announced its own new “National Cultural Policy” around the same time. While it doesn’t outline the exact plans to regulate online streaming services, the Australian government laid out its goals to address the decline in local broadcasting revenues and bolster the creation of domestic productions.

While the report acknowledged the level of quality and popularity of the current slate of Australian content on the platforms, “these services have no requirements to make Australian content available on their platforms. The ready availability of mass content produced in other countries, particularly the United States, risks drowning out the voices of Australian storytellers,” read the Australian government’s cultural policy plan “Revive.”

While no longer part of the AVMS, the UK’s government continues to investigate the creation of rules so that the Office of Communication (Ofcom) will have jurisdiction over overseas streaming services. This recently came to a head when complaints about the Netflix docuseries featuring Prince Harry and Meghan Markle had no official avenues to be heard.

Canada’s new legislation stands out 

The proposed legislation north of the border has faced headwinds from entities both large and small because of the unique nature of the proposed laws. “C-11 is a bit of an outlier. In that it extends to user generated content on platforms like YouTube or Tik Tok. The European example does not,” said the University of Ottawa’s Canada Research Chair in internet and E-commerce law, Michael Geist. 

Major pushback has resulted in the inclusion of user generated content and subsequent amendments have been put forward to avoid some of the issues with attempting to put all online content under the Canadian regulatory umbrella.

In September, Disney and Spotify asked the federal government to be more flexible about what it considered “Canadian content.” The streaming services warned that certain material, while ostensibly produced in Canada with a Canadian cast, wouldn’t count under the current rules, which include Canadian ownership of intellectual properties.

However, it’s worth noting that trade agreements such as the North American Free Trade Agreement (NAFTA) and the Canada-United States-Mexico Agreement (CUSMA) include provisions that protect the ability of companies to trade in audiovisual services across the Canada-U.S. border. Already, the U.S. embassy has expressed reservations about the proposed laws violating non-discrimination terms of the free trade agreements signed by the two countries.

While the bill is slated to pass the legislature, much of the specifics will need to be determined by the arms length content regulator the Canadian Radio-Television and Telecommunication Commission (CRTC). So the final rules and the structure of the regulatory framework remains unclear and will be subject to a public consultation process.

Despite the efforts in international English-language markets to avoid being drowned out, English language markets still generally benefit from the sympatico of shared language with the largest content producing sector in the world. 

“Those English markets have had significant success, attracting investment from large streaming services and large production companies,” said Geist. “To Canada’s case, it’s a thriving sector that’s based in part on tax, [and] part on proximity to the U.S. market. So I don’t know that that necessarily suggests that what you need is more protection.”

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