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Friday, 12 December 2014

Google's European battles continue

It is actually pathetic how far European regulators are capable of ruining their economies. The recent decision by Google to shut down its news service in response to the Spanish government's idiotic new law shows the extent to which politicians are captured by the local press. The law actually forces publishers to charge Google for linking to their sites, in other words, publishers are not allowed to let Google report their articles for free. No doubt the law was inspired by the German experience (where powerful national papers were also bullying the government). In Germany many papers opted out of charging Google. Spain forces the publishers to charge Google with a minimum fee, essentially creating a powerful newspaper union. Not only does this protectionism hurt the economy, it also weakens the government that is - evidently - already at the mercy of the national press.

Monday, 8 December 2014

Facebook Ad effectiveness

The past year's media covering Facebook's prospects as an advertising medium have been full of contradicting information. We heard that youngsters are turning their backs to the platform and that people are fed up with Facebook's lax privacy policy. On the positive side, members ended up more than tolerating Facebook's strategy of putting, so-called native advertising in the newsfeed and markets appreciated the smooth transition of ad revenues from desktop to mobile. Overall, Facebook has done really well. A recent study by Kenshoo (however believable) is a good summary of the year-end verdict: while the cost of Facebook ads have grown significantly, ROI has almost doubled. Social advertising is indeed becoming mainstream.

Friday, 28 November 2014

Google under attack in Europe

It is pretty pathetic how violently European politicians, unable to point to national champions in the Internet / media sectors, attack Google threatening it even with a potential breakup (see recent FT article). Not only is the method unfair, it is also massively stupid as it is simply impossible to implement. Surely, even the German economics minister has realized that the Internet doesn't really respect borders. Google can always keep its servers outside the Eurozone and serve customers from other regions depriving European governments from even the little corporate tax that the company pays to them. Will this mean that Europeans won't use Google's search engine? Unlikely. Even in China, people use Google and surely Europe will not go as far in isolating its Internet users from the single best search engine of the world. And let's not forget that even China, although massively poorer than Europe, can actually show a couple of Internet champions (Alibaba, Baidu, Tencent, WeChat, etc. etc.). Rather than listening to their lobbying media friends, Euro ministers should work on creating an economic environment where innovation and investment thrives.

Tuesday, 11 November 2014

Agenda setting

My friend Francesco Marconi at the Associated Press pointed out some nice research conducted at the Pew Research Center. The analysis, pictured right, shows strong evidence of Agenda setting at major U.S. news outlets. Agenda setting is a subtle way to implement media bias by essentially under-reporting on topics that less favorable to the arguments of the core audience. It is clearly the case for this event that definitely seems to divide America. It is also interesting how social media relates to the 'branded' news channels. It seems that, Twitter is actually driving the news rather than reacting to it.

Friday, 7 November 2014

New York City Media Seminar: Net Neutrality

Nicholas Economides, from NYU was the speaker of last week's NYC Media Seminar. He talked about Net neutrality and its regulatory implications. The topic is complex and among the handful of theoretical models, each only captures a somewhat simplified version of the problem. What emerges from their analysis is ambiguous. We had a great debate concluding that some regulation is clearly needed but maybe it shouldn't be too heavy handed (not too clear as a recommendation). It was also evident that the issue of Net neutrality is so critical in the USA because there is generally insufficient competition on the consumer broadband market (in contrast to Europe, for example). A special treat of the seminar was that it took place in the AP's so-called "fishball room", where, every day, the AP decided what news around the world should be published by news outlets. Not quite but almost...

Sunday, 2 November 2014

Political polarization in the news media

A recent project by the Pew Research Center describes the media habits of Americans depending on their political preferences. There isn't that much surprise in the report: Americans are very polarized, more so than a decade or longer ago.... There is one chart that I found quite interesting: it tries to describe the relative stance of different news outlets across media types (newspapers, newsweeklies, cable news channels, etc.).
The chart is quite loaded on the left. It is surprising that The Economist and even the WSJ are considered to be liberal, The Economist quite so actually. More interesting was the result to the question: "Do you trust/distrust a particular media outlet?" Of course, people trust the outlet reflecting their political views and distrust the one with the opposing views. Yet, three news outlets were trusted by everyone: BBC, The Economist and The Wall Street Journal. Everyone mostly distrusted Buzzfeed.

Thursday, 30 October 2014

Is this the end of the TV ecosystem?

A lot happened in the last few weeks suggesting that the TV industry's traditional ecosystem may fall apart much faster than previoulsy thought. Interestingly, it is not really the accelearation in consumers' "cord cutting" that may drive the process (this is relatively mild still) but rather some content providers' nervousness about 'missing out'. As they watch Netflix and other streaming services come to live, some powerful content providers challenge the status quo to tap into the growing OTT market despite potential backlash from their traditional distributors (cable providers). Yesterday's FT article nicely summarizes the events of the last few weeks (HBO's and CBS's decisions to go direct and some similar effort from ESPN). Most importantly, the article reports on regulators' changing attitude: what if all Internet channels were also considered video distributors, so-called MVPDs? The economics are tricky and may not mean the end of traditional cable providers, who are still in the best position to deliver the Internet to people's homes: 4 channels at $10/month each and a good broadband link at $30-40/month amounts to $70-80, not far from a monthly cable subscription (with amuch richer bundle). The difference is that people can build their own bundles and with the number of potential combinations competition may massively increase pushing content access prices down. Ironically, the winners may remain the cable companies whose monopoly power on Internet access will not change much.