The oscars

And just one day after the results The Economist (see article here) does a wonderful analysis of the Oscars putting into perspective the change that slowly happened over the last 10 years and explaining why the industry has become more "open minded" in its praise. The highlights: less risk taken by big studios to create original content, more experimentation, especially by TV series and more openness for indie and foreign productions.

New York City Media Seminar: Vertical integration

At last week's New York City Media Seminar, Greg Crawford from the University of Zurich presented a fantastic paper on vertical integration yesterday. The paper examined whether and when an integrated content owner and content distributor would foreclose their content from a rival distributor. They collected data on the availability of regional sports networks on multi channel cable and satellite services across the US. They definitely find evidence that the integrated entities tend to optimize the joint profit of the enterprise (maybe not fully but almost). Yet, for this particular content it is not obvious that this necessarily leads to foreclosure of content. This depends on the demand (consumers' willingness to pay for the content). The paper is remarkable in its treatment of institutional details - rarely seen in empirical work, especially for such a complicated problem. And, again, it shows that regulation is extremely complex for these industries.http://www8.gsb.columbia.edu/media/faculty/researchseminars

Net Neutrality

This short article in The Economist nicely concludes on the extremely complex issue of net neutrality. (A slightly more detailed report can be read here). The basic point is that precisely because it is very complex, the problem should be dealt with light regulation setting only broad guidelines and still leaving room for the market to figure out an efficient allocation. It is becoming increasingly clear that the core issue is the lack of competition for consumers to access broadband. Introducing competition would go a long way to make the net neutrality problem go away. It seems that US regulators seem to move in this direction. 

New Editor in Chief at The Economist

The Economist has chosen a new editor and the choice boiled down to (see FT article for details) Zanny Minton Beddoes. She is the first female editor of the 150+ years old magazine that has defined adverse industry dynamics with its unique editorial model. Minton Beddoes has all the right lines on her CV to become a very successful editor. She is an economist from Oxford and Harvard, worked at the IMF and has been involved with global policy advice across the planet. She has been with the magazine for over 20 years.

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.

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.

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.