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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.

Saturday, 4 October 2014

Comcast and TWC again...

The media mega-merger of the fall is far from being a forgone conclusion. And it will coincide with FCC rulings on net-neutrality, a topic closely related to the debate on whether Comcast should be allowed (or not) to acquire TWC. The core issues are nicely summarized in a recent article by The Economist, that paints a particularly worrying picture of Comcast's lobbying techniques. Yet is this really such a big deal?

Nobody doubts that Comcast will have even more power than before. But, it is not clear how much more. It has too much power already today. But where is this power coming from? Its size? Hard to believe. 40% share is not that large even if it dominates 10 of the largest metropolitan markets. Some content providers have much higher shares (think of ESPN). Moreover, cable providers have always been local monopolies for it doesn't make sense to duplicate infrastructure. Is Comcast's power coming from the fact that it is backward integrated? Again, not clear. While it owns all kind of content assets, there are powerful channels outside Comcast with huge negotiation power. And let's not forget that vertical integration should lead to lower consumer prices as double marginalization is solved. Then, what is the problem? I think that the problem is the lack of competing technology to cable. Telecom firms have terrible infrastructures in the U.S. and this, even in large cities. AT&T, and its (few and large) competitors have failed to invest in broadband as did satellite (although the technical difficulties are bigger here). The real solution to curbing Comcast is to make sure that there are proper incentives to invest in alternative broadband technologies.

Thursday, 2 October 2014

How to use location data for marketing

With the explosive growth of mobile devices and usage, advertising dollars are quickly moving to mobile. However, the return on this ad spend is questionable partly because marketers have a hard time figuring out how to effectively use consumers' location information. "Geofencing", the idea that a consumer can be attracted to a store or service when s/he passes in its proximity is an obvious solution but this may not work for a variety of products (large ticket, high involvement products for example). We explore an alternative use of location data here, that makes use of people's movement patterns and their similarities to infer inherent consumer characteristics. It is exciting to see that so much can be inferred from simple movement paths. There is a lot more to come in the area of geo-location for marketers.

Wednesday, 1 October 2014

NYC Media seminar: Radio mergers

First, an introduction: on the first Wednesday of every month I and Lisa George from Hunter College organize an academic seminar in downtown NYC. The seminar is hosted by the Associated Press. The topic is media broadly defined. We tested the concept last year and it worked so we plan to continue. The line-up of speakers for this year can be seen here.

Today was the first talk by Przemyslaw Jeziorski, from Berkeley, Haas. The topic was the impact of the 1996 deregulation of radio station ownership caps on M&A activity. Fantastic paper, great data and careful methodology! The conclusions are also very interesting. Deregulation seems to have resulted in significant increases of social surplus (mostly reflected in higher radio revenues due to increased market power and presumably lower costs as a result of scale). Moreover, there is convincing evidence that simple rules (e.g. an owenership cap) work better as firm's can 'game' the regulator's more complex intentions.