A leveling playing field
Antitrust measures for the platforms and mergers for the publishers leave the 2021 media landscape looking a lot more competitive.
|Mark Stenberg||Dec 16, 2020||2||1|
A song to read by: “I Tried to Tell Myself,” by Al Green
What I’m reading: “A People’s History of the United States,” by Howard Zinn
The circle of platforms
In Europe, after years of slap-on-the-wrist fines, the European Union is starting to get serious about curtailing the privacy violations perpetrated by major internet platforms, a move that dovetails with increasing calls in the U.S. to reevaluate the scope of Section 230 of the Communications Decency Act, which grants indemnity to websites for the content they publish.
Casey Newton details it best in his newsletter Platformer, but here’s the short and long. The executive arm of the EU has proposed two bills that will give teeth to regulation that aims to rein in the supposed abuses of privacy being committed by major web platforms. These bills give the agency the ability to fine “6% or 10% of annual world-wide revenue” of tech firms, a massive escalation in their approach.
Meanwhile, in the U.S., president-elect Joe Biden has hinted at his plans to revisit the protections afforded to tech companies by Section 230, which essentially says that platforms are not liable for the content they host.
For a vision of what a post-Section 230 world might look like, look at the recent political upheaval rocking PornHub. After a scathing piece by The New York Times’ Nicholas Kristof criticizing the platform for allowing untold amounts of illegal and abusive content, the platform responded by wiping all videos not uploaded by verified users.
Instead of choosing the Facebook workaround, i.e. hiring thousands of content moderators to sort through troublesome content piece-by-piece, PornHub has opted to remove all content it can’t vouch for.
On an internet absent the protections of Section 230, platforms will likely adopt a similar approach, drastically shrinking the amount of material they publish, insisting that everything be vetted first to protect themselves from potential blowback. Whether this is good or bad for the web, however, remains a topic of much debate.
These developments, which threaten the hegemony of major tech firms, coincide with a rise in mergers amongst web publishers, who are banding together to combine their respective reaches into something resembling competition for social media. I wrote three weeks ago about what these consolidations mean for smaller, local media, but in light of the recent clampdowns on big tech, these Voltron-assemblages take on a decidedly more combative nature.
If media companies can consolidate into large conglomerates, while tech firms face censure, shrinkage, and legal action, the two events pave the way for a much more competitive media landscape.
Much has been made, including by yours truly, about the negative effects that Facebook and Google have had on the publishing industry. By dominating digital advertising, the two tech behemoths have robbed publishers of their historical birthright: ad-based revenue. Much of what has followed in the media world — the decline of local news, the rise of newsletters, the partisanship of journalism — stems from this evaporation of income.
For the last several years, publishers have responded by introducing new products, streamlining their websites, targeting niche audiences, etc., but nothing has filled the hole that was formerly filled by gobs of advertising revenue.
But in the last year, in a bid to reverse their failing fortunes in this department, publications have begun buddying up, combining audiences and data insights to make themselves more appealing to advertisers. Larger audiences mean more data and broader reach, both of which allow publishers to charge more for hosting digital audiences.
Just last month, HuffPost and BuzzFeed joined forces. Before that, Vice and Refinery29 got hitched, Vox bought New York Magazine, and private equity vultures hoovered up every local news institution with a pulse they could find. According to The Wall Street Journal’s Ben Mullin, another acquisition might also be in the works; Group Nine Media, the owner of websites such as The Dodo and NowThis, is considering using a blank-check company to acquire some of its competitors.
If the new world of digital advertising requires massive scale just to survive, these media firms have accepted the challenge, adjusting their targets from sustainable to too big to fail.
What they could not have imagined, though they might have hoped, was the changing fortunes of their tech brethren.
Neither Joe Biden nor Donald Trump has been incredibly kind to Silicon Valley, but Biden has vocally promised to whip those malarky-slinging tech whipper-snappers into shape. In the planks of his presidency, sharp regulations for the tech industry have long loomed. Now that he is a mere month away from assuming the Oval Office, those developments have been expedited.
In the last week, the Federal Trade Commission slapped Facebook with an antitrust suit, alleging that Zuckerberg’s Frankenstein acted anti-competitively in several of its acquisitions and business maneuvers. This, combined with the new spasms of tech restriction reverberating through the European Union, prefigure a new chapter in the world of 21st-century tech: its decline.
For better or for worse, the internet landscape appears overdue for a change, and Biden seems like the man to bring it to fruition. Facebook, Google, Amazon and others might soon be facing government action designed to clip their wings, slow their growth, and protect consumers. Many parties stand to benefit from this change in the status quo, especially publishers.
Most publications ceded digital advertising to the tech firms years ago, devising new formulae that could run on the scraps of revenue left behind after FAANG had already eaten their fill. Now, with the platforms under the gun and publishers banding together, the new year looks more like an equal playing field than ever before.
Smaller publishers will still have to target niche audiences, use email strategies, avoid algorithms, and rely on direct revenue, but the larger players might actually stand a chance in rebuffing the dominance of the platforms. Sure, they’ll never command an audience of billions in the same way Facebook does, but they can stand a better chance of sustainability than they did even a year ago.
Sometimes, it seems, the best end-game is just survival. Maybe all publishers actually had to do was wait out the apocalypse?
Some good readin’
— On Fanhouse, creators are putting their selfies and jokes behind a paywall and making thousands in subscriptions. (Business Insider)
— The best memes from the worst year. A must-read. (BuzzFeed)
— This piece, about the provenance and purpose of op-ed pages, was eye-opening to me. (Columbia Journalism Review)
— Why nothing in 2020 made sense unless you were on the internet. (Vulture)
— Walmart is building an army of employee-influencers. Not great! (Modern Retail)
Cover image: “Irises,” by Vincent Van Gogh