AT&T gets streaming with HBO Max

Gone are the days when the consumer could get all the content they wanted in one place as AT&T’s WarnerMedia joins the streaming landgrab.

With Netflix, Amazon Prime, Hulu, Disney, HBO and numerous other streaming services on the market before too long, the fragmentation of content is looking like it could be a serious problem for the consumer. Whether splitting the spoils has an overarching negative impact on the segments profits remains to be seen, but customers wallets can only be pushed so far; how many streaming services can each customer be expected to have?

That said, AT&T is in a strong position with this proposition. In HBO, it owns a lot of promising content already, playing into consumer nostalgia, and it does seem to be heading in the right direction in terms of original programming.

“HBO Max will bring together the diverse riches of WarnerMedia to create programming and user experiences not seen before in a streaming platform,” said Robert Greenblatt, Chairman of WarnerMedia Entertainment and Direct-To-Consumer.

“HBO’s world-class programming leads the way, the quality of which will be the guiding principle for our new array of Max Originals, our exciting acquisitions, and the very best of the Warner Bros. libraries, starting with the phenomenon that is ‘Friends’.”

With the service set to debut in Spring 2020, AT&T is promising 10,000 hours of programming from the outset. Full series of ‘Fresh Prince of Bel Air’, ‘Friends’ and ‘Pretty Little Liars’ will feature in the content library, as well as new dramas such as ‘Batwoman’ and ‘Katy Keene’.

Looking at future Max Original series, the list is quite extensive. ‘Dune: The Sisterhood’ is an adaptation of Brian Herbert and Kevin Anderson’s book based in the world created by Frank Herbert’s book Dune. ‘Lovecraft Country’ is a horror series based on a novel by Matt Ruff. ‘The Plot Against America’ will be a reimagined history based on Phillip Roth’s novel.

The ingredients are all in place to ensure AT&T makes a sustained stab at cracking the streaming market which has been dominated by the OTTs to date. There are a couple of questions which remain however.

Firstly, pricing. Can executives price the service competitively while also sustaining investments in content? Secondly, experience. Will the platform meet the high-expectations set by consumers thanks to the high-bar set by Netflix? And finally, culture. Will AT&T allow WarnerMedia to operate as a media business or will it impose the traditional mentality of telcos onto the business?

AT&T has bet big on the content world and it can ill-afford to fluff its lines on its debut. Having signed an $85 billion deal to acquire Time Warner and spent what seems like decades battling various government departments to authorise the transaction, the telco will need to see some ROI sooner rather than later.

The question is whether the momentum in the streaming world can be sustained. Platforms like Netflix, Hulu and Amazon Prime were attractive in the early days because there was consolidation of content onto a single library. With more streaming services becoming available, the fragmentation of content might well become a problem before too long. Consumers will have to make choices on what service to subscribe to, limiting the profits of the individual providers.

The days of subscribing to everything might be a thing of the past before too long; wallets can only be pushed so far.

Diversification into profitable segments is certainly a sensible strategy in the days of meagre connectivity profits, but $85 billion is a lot to spend on a hunch.

Concerns raised about under-age social media use

Research conducted by AgeChecked has revealed concerns about the exposure young children have to social media services and some of the content on them.

Age verification service AgeChecked surveyed 1,500 UK adults and found social media in certain areas is scarily unregulated, even to the point where children using social media could potentially access pornographic content without any form of age checking. To make matters worse many 10 year olds accessing social media even though the legal age is 13.

“For parents, monitoring their childrens’ online activity has become a near-impossible task” said Alastair Graham CEO of AgeChecked. “Social media companies have a duty of care to young people, and must ensure that those who are accessing their sites meet their minimum age requirement.

“Whilst the ever-growing market of technologies can be of great benefit to children, they also pose unprecedented risks. Appropriate measures – such as robust, integrated age verification systems – must be taken to ensure young people are protected from potentially harmful material.”

68% of parents have made the claim that their child could be talking to strangers via social networking sites, according to the research. 70% have said that their child has access to disturbing video content and, maybe the worst of all, 40% have voiced the concern that their child can visit shopping sites and buy dangerous items such as knives and alcohol without being age checked.

Studies like this will add to the increasing pressure social media companies are already under to protect their users from harm. Companies like AgeChecked may have a commercial interest in promoting the importance of making sure under-age people don’t have access to inappropriate content, but that doesn’t mean they’re wrong.

YouTube CEO’s struggle session was futile

In her first public statements since last week’s censorship controversy YouTube CEO Susan Wojcicki attempted to strike a balance between freedom of speech and censorship.

As a quick reminder: one YouTube user claimed to be the subject of homophobic harassment by another user and wanted them censored accordingly. YouTube initially said none of its policies had been violated but on further reflection decided to demonetize (stop serving ads, which are the primary source of revenue for YouTubers) the channel of the accused.

At a live event hosted by Recode – a tech site owned by Vox, which also employs the above complainant, Carlos Maza – Wojcicki insisted on making a public apology to ‘the LGBTQ community’ before answering any questions. This was presumably in response to critics from within that group of the decisions made, of which Maza himself remains one of the most persistent.

Wojcicki moved on to recap what had taken place, which consisted of two distinct but parallel events. The first was the announcement of measures YouTube is taking against ‘hate speech’, which had apparently been in the pipeline for a while. The second was Maza’s allegations and demands, which YouTube addressed separately.

For two such separate issues, however, there seemed to be a fair bit of overlap. Firstly it was revealed that YouTube had pre-briefed the media about the hate speech announcement, raising the possibility that Maza was aware of it when he made his allegations on Twitter. Secondly the decision to demonetize the offending channel coincided precisely with outcry at the original decision that none of its policies had been transgressed, despite that decision having apparently taken 5 days to make.

In the context of hate speech Wojcicki also mentioned that laws addressing it vary widely from country to country. This highlighted one of the central dilemmas faced by internet platforms, that they’re increasingly expected to police speech beyond the boundaries of legality. Their attempts to do so lie at the core of the impossible position that they’re now in.

The interviewer expressed sympathy about the impossibilities of censoring an open platform at such scale and Wojcicki could only say that YouTube is constantly striving to improve and pointed to recent pieces of censorship as proof that it’s doing so. She pushed back at the suggestion that YouTube moderate every upload before publication, saying a lot of voices would be lost. She pointed instead to the tiered model that allows for things like demonetization of contentious content.

This model was also used in defence of another couple of specific cases flagged up by the interviewer. The first concerned a recent cover story on the New York Times, the headline of which spoke of one YouTube user who found himself brainwashed by the ‘far-right’ as a result of recommendations from YouTube, but the substance of which indicated the opposite. Wojcicki said another tool they use is reducing the recommendations towards contentious content in order to make it harder to find.

The other case was of a US 14-year-old YouTuber called Soph, who recently got one of her videos taken down due to some of its content, but whose channel remains. The utter futility of trying to assess and potentially censor every piece of content uploaded to the platform was raised once more and, not for the first time, Wojcicki attempted to steer the conversation to the 99% of content on YouTube that is entirely benign.

Carlos Maza responded to the interview with the following tweet, inspired by a question from the audience querying the sincerity of Wojcicki’s apology to the LGBTQ community, to which she responded that she is really sincere. Maza’s tweet indicates he won’t be happy until anything perceived as harassment of ‘queer’ people is censored from YouTube.

You can see the full interview below. As well as the prioritised apology, this did seem like a good-faith attempt by Wojcicki to openly address the many complexities and contradictions faced by any censor. It seems very unlikely that her critics will have been swayed by her talk of nuance and context, however, and there is little evidence that this interview solved anything. Still, at least she gave it a go and if nothing else it will have been good practice for the many other such struggle sessions Wojcicki will doubtless have to endure in future.

 

YouTube is stuck in the middle of a war between mainstream media and independent creators

Internet platforms have become proxies in a culture war between corporate-backed commentators and independent ones.

The latest round in this battle has been fought on YouTube, specifically between a journalist who works for Vox called Carlos Maza and a YouTuber called Stephen Crowder. In a series of recent tweets Maza accused Crowder of homophobic harassment and called on YouTube to punish his channel for violating its own rules on such things.

 

YouTube eventually responded via Twitter by saying that, while it can see why Maza would feel hurt by some of Crowder’s comments, they didn’t violate its policies and thus would not be punished. It stressed that, as an open platform, it can’t punish everything that may be considered offensive and that refusing to take down a video was in no way a corporate endorsement of its content.  

The reason this is a big deal is that it touches on a lot of the cultural divisions currently being played out over, and probably exacerbated by, social media. Not only do the two protagonists seem to be on opposite sides of the political divide, they seem to be culturally and personally opposed to each other too. On top of that Vox Media has raised hundreds of millions of dollars in finding and has US giant Comcast as a significant minority shareholder, while Crowder claims to be entirely funded by subscriptions and merchandise sales.

So in many ways these two people are viewed as proxies in the broader culture war and whichever way YouTube went on this would be viewed as a victory for one team or the other. This dispute, and others like it, also serve as test cases for internet censorship in general – specifically what sort of content should be censored.

Maza argues that, by frequently referring to his sexual orientation, Crowder is being homophobic and that a failure to act against such speech is, in itself, essentially homophobic. Crowder, in the video below, says that’s ‘friendly ribbing’ and says he figured referring to his sexual orientation wouldn’t be an issue since Maza’s own Twitter handle is ‘@gaywonk’.

Crowder goes on to use comedy as a defence, which really cuts to the heart of the censorship debate. A core component of much comedy is pushing boundaries and saying the unsayable. Social platforms and national laws have a wide range of attitudes towards comedy and definitions of speech that shouldn’t be allowed and there’s no clear consensus.

YouTube seems to be more concerned about upsetting its big advertisers than policing speech, which is why it usually opts to demonetize contentious content rather than ban it outright. For this reason many independent YouTubers, such as Tim Pool below, are upset at Maza because they think he’s trying to provoke YouTube into demonetizing the kind of content they produce, as opposed to his own, of course.

Maza himself doesn’t seem to have made a video addressing this issue, although he has made his displeasure at YouTube’s decision abundantly clear on Twitter. But he has had plenty to say on the culture war being fought over social media in the past, of which the following video is a good example.

Maza makes a good point about how the algorithms that determine the recommendations we receive on social media sites inevitably lead to polarisation. He concludes, however, with an apparent call for censorship of what he describes as ‘bad apples’. Here we have the essential problem with censorship – deciding who should be censored. You can probably identify who Maza thinks should be censored from the video and his editorial angle, but how confident can he be that he won’t, one day, be identified as a bad apple too, despite his publication’s considerable corporate backing?

As with so many others, the internet censorship debate comes down to where on the freedom-safety continuum you lie. As journalists we are instinctively in favour of as much freedom of speech as possible, while acknowledging there have to be some legal limits to it. It’s therefore surprising to see other media actively calling for increased censorship and we urge them to be careful what they wish for.

Europe told it can force Facebook to do more on illegal content

An opinion revealed by Advocate General Macief Szpunar, a prominent advisor to the European Commission, has suggested Facebook can be forced to do more to crack down on illegal and offensive content.

Limiting and blocking content on social media sites is an incredibly difficult topic to address. Not only do you have the risk of alienating individuals by drawing a strict line on what is deemed offensive, there is also the danger of invading freedom of speech rights. Facebook has always tried to stay at arm’s length from the tricky conundrum, but the opinion from Szpunar might offer ammunition for red-tapers throughout Europe to hold the social media giant more accountable.

The document states:

“In today’s opinion, Advocate General Maciej Szpunar considers that the Directive on electronic commerce does not preclude a host provider which operates a social network platform, such as Facebook, from being ordered, in the context of an injunction, to seek and identify, among all the information disseminated by users of that platform, the information identical to the information that has been characterised as illegal by a court that issued that injunction.”

As with most legal matters, this is a highly complicated and nuanced case, not only because it deals with the intersection of speech moderation and freedoms, but also due to the fact that social media platforms are incredibly complex machines. It is not straight-forward applying new rules, especially when you consider the platforms are extended over multiple geographies, languages and legal jurisdictions.

In short, Szpunar suggests social media platforms can be forced to remove all content which is related to illegal content, and that the conditions can be applied to Facebook globally.

This case dates back to 2017 and a speech made by Austrian Green Party Eva Glawischnig. Glawischnig claimed that comments about her made on Facebook were defamatory, to which an Austrian court agreed, and Facebook was ordered to take down the posts. Facebook complied, but only in Austria, to which Glawischnig argued the action should be extended across the entire social media platform while also including any verbatim re-postings.

Further filings were made to the Court of Justice for the European Union, leading towards Szpunar’s opinion today. What is worth noting is that the court does not have to follow the opinion of Szpunar, but in most cases it does follow the opinions of the eleven appointed Advocate General’s.

In the opinion of Szpunar, Facebook can be told to spread the net further, suggesting there are no limitations in forcing social media platforms to comply globally, while it will also have to do more to remove identical content which has already been deemed illegal by the courts.

What some might find more objection to is some slight mission creep from the European Commission. The opinion suggests there is no reason Facebook cannot be forced to apply these rules globally, though over sovereign nations might object to be told how to govern their own states. This is another very sensitive area, especially at a time where international relations are fragile.

Europe is taking a much more stringent stance against the internet giants than many other nations around the world, though we suspect there will be critics suggesting it is overstepping the mark here. And to be fair, they would have a point. What right does Europe have in imposing its own opinions on free speech principles on other territories? Why should their approach be considered more appropriate than anyone elses?

This is not the first time it has been suggested Europe is overstepping the mark. The same Advocate General came to the conclusion Europe had the right to force Google to remove archive listings of some news stories on a global level last year.

In this case, two businessmen had served criminal convictions, but were arguing the cases should be deindexed as the punishment had been served, and there was a risk of future employment being impacted should the stories have been discovered.

This is a slightly different case, as the ‘right to be forgotten’ saga with Google leans on the principles of privacy and the fact the two individuals in question had been ‘rehabilitated’. The complication with Glawischnig is that it is based on the legal definition of defamation, which might vary from jurisdiction to jurisdiction.

Alongside the implications to freedom of speech, this does also force Facebook to become a more active moderator of the content which is published on its platform.

This is where Facebook has been able to dodge many bullets over the past decade; it is not a publisher, therefore should not be held accountable for the opinions, and management of those opinions, which are published on its platform. It has painted itself as the role of curator and platform provider, avoiding the term ‘publisher’, as this would imply it has more influence and control than it wants to have.

The selling point of many social media platforms is that it is ‘unmoderated’ content. Users can put anything they want online. In the early days, this freedom democratized opinion though there are now elements of society who use the platforms in ways deemed nefarious or contrary to societal benefit.

Not only does Facebook want to avoid the difficulty and legal complexities of becoming a more active moderator of content, it wants to remain true to initial function of the platform; freedom to do and say whatever the user wishes. This was attractive to users in the first years, and should Facebook want to re-engage the masses, it will have to offer an experience which is appealing.

And while the technology giants might not like the direction this case is heading, some governments certainly will.

Governments around the world are increasingly looking for ways to strengthen the grip they have on the internet industry. Part of this will be down to abuse of tax loopholes, some will be protecting the innocence of those reading material online and a slice is on increasing the capabilities of intelligence agencies and police forces.

There are of course numerous different approaches from governments when addressing illegal content and hate speech. Australia, for example, has passed the Sharing of Abhorrent Violent Material bill imposing harsh penalties on those who do not take down what the law decides is ‘abhorrent violent conduct’, though it still has it critics. In this case, there is some sympathy for the internet giants as everything they currently do is reactive, reliant on complaints from those who are already exposed to the materials.

Germany was one of the first, and strictest, countries to tackle the conundrum, while the UK has developed its own AI to identify the content which it has deemed as terrorist. The US is taking a much more hands-off approach, though there are clearly PR points to win for politicians here; the Senators and Congress representatives might find themselves being drawn into the debate before too long.

This is an immensely complicated area of social media. The courts will only want to make firm judgments when absolutely necessary, as many are cautious when it comes to precedent. Anything written in stone can be cleverly massaged by well-paid lawyers, expertly practiced in the field of nuance, to mean a variety of things.

This is also not the final judgment. The Court of Justice for the European Union usually follows the Advocate General’s opinion three to six months later, leaving plenty of opportunity for different arguments to be heard.

We’ve been keen to avoid the word censorship in this article, as it can be a very inflammatory way to describe an incredibly complicated and sensitive issue, but this is of course one of the risks which the world trends when you impose restriction on freedom of speech.

Trump tweets anti-AT&T tirade

Its often said the pen is mightier than the sword, but President Donald Trump seems to think his twitter account is the literary version of a dirty bomb.

In the latest example of the flurry of tiny hands scampering across the keyboard of an unsecured iPhone, the Commander in Chief has taken aim at AT&T, suggesting US citizens should turn elsewhere for their daily fix of connectivity.

Those expecting some sort of scandal might be disappointed. AT&T hasn’t actually done anything wrong aside from owning CNN, a regular target for the President.

What we are unsure of is how much of an impact these sorts of attacks will actually have on the AT&T brand. Of course, there will be millions who simply disregard the majority of messages which float out of the Oval Office, but there are probably as many who would take the President’s word as gospel.

There have been other attacks from Trump using the virtual highways, with Amazon CEO at the centre of one of these examples.

Back in April 2018, Trump set his eyes on the eCommerce giant. The stream of abuse suggested Amazon was being naughty with its tax returns, was holding the US Postal Service to ransom and Bezos’ purchase of the Washington Post was purely to acquire a lobbyist and a voice which could undermine the White House. Some points were fair, such as the creating accounting techniques, though the Presidential paranoia suggesting political propaganda perhaps showed a measure of the man’s ego.

In the war of words with Amazon, it was largely hot air. The President was flexing his muscles, without actually doing anything. If he wanted to do any real damage, he could have cancelled the AWS multi-billion-dollar contract with the Pentagon. But he didn’t.

Bearing this in mind, AT& shouldn’t have too much to worry about, though it certainly doesn’t have the same brand credibility as Amazon.

According to The Values Institute, a research and consulting practice solely focused on values based corporate culture, Amazon was the most trusted brand in the US in 2018. AT&T was the best scoring telco on the list, though it ranked down in 32nd. This is down from 14th in 2017. 32nd doesn’t sound too bad if you consider all the companies which operate in the US, though the scope of this survey is quite limited, only taking the biggest names into account.

Interestingly enough, AT&T finished below Taco Bell, which is regularly featured in a variety of toilet memes on the social media platforms.

Amazon has the credibility with US consumers to simply ignore any Twitter abuse from Trump, but telcos certainly do not have the same relationship with consumers, especially when you consider the recent race to the bottom. For some, telcos are utilities. It is a tough reputation to shake, while a constant focus on speed and price won’t help at all.

Looking at the potential impact of the President’s social media temper tantrums, it does seem to be short-term in most circumstances. This is not the first time President’s have named and shamed companies, President Kennedy did it in the 70s, but social media is a new beast. Most of the time with Trump’s rants, share price seems to be hit for a short period, though it recovers soon after. There doesn’t really seem to be any notable follow through from the President’s threats.

In the Amazon case, share price dipped by 11% during the exchange. The threat of intervention was enough to spook some. However, it took roughly two weeks for recovery, and since that point share price did increase almost 40% before a heavy fall last month.

Research from Juma’h Ahmad and Yazan Alnsour of University of Illinois also suggest there is limited impact from the President’s social media fury. In a study which looked at Presidential attention on 58 companies, the duo concluded there was no long-term, material consequence for the business, with any impact in the financial markets limited to three to five days.

Interestingly enough, Trump seems to be having less of an impact on the world as his term progresses. According to data from CrowdTangle (covered here by Axios), Trump’s interaction rate has fallen from 0.55% in the month he was first elected, to 0.16% in the month through to May 25 2019

The growth in Trump followers is still staggeringly large, though it appears he is not getting the same cut through as before. This might be down to a couple of different reasons, perhaps more laissez faire followers or maybe there is just too much noise reducing the effectiveness.

While there is a risk, especially considering the sustained nature of Trump’s hatred towards CNN, we’re not convinced whether an attack on AT&T’s reputation from Trump will have too much impact. However, the President has a track record of swaying the masses.

Vivendi media mission continues rolling through Europe

Vivendi-subsidiary Canal Plus has announced the €1 billion acquisition of pay-TV operator M7, expanding the business into seven new European markets.

The deal, which is still subject to approval from the European Commission, will take Vivendi across the borders of the Netherlands, Belgium, Austria, Czech Republic, Slovakia, Hungary and Romania. M7’s subscriptions currently total more than three million across its European footprint and revenues of just over €400 million.

“We are particularly pleased with this acquisition project made possible by Vivendi. The operation would allow Canal Plus Group to approach 20 million subscribers worldwide,” said Maxime Saada, Chairman Canal Plus’ Board of Directors.

“Our global subscriber base will have almost doubled in five years, with a clear acceleration starting in 2015. This major operation will allow us to strengthen our distribution capacity in order to leverage content originating from our library and our numerous production operations in Europe.”

The Vivendi media mission is not a secret in the industry. Acquisitions have been somewhat of a guilty pleasure for the business, and this move is intended to further increase the influence of Canal Plus over the European continent, and worldwide. With M7 in the armoury, Canal Plus will have 20 million subscribers worldwide, including 12 million in Europe.

M7 is currently an aggregator of various local and international content, though the acquisition would create additional avenues for Canal Plus to distribute its own content. Canal Plus claims it currently spends €3 billion a year creating content, putting it in the same league as Netflix when you factor in the scale of the subscription bases (Netflix spent $8 billion in 2018 with a subscriber base of roughly 140 million).

Facebook restricts Live streaming access

Facebook has introduced new restrictions on its video streaming platform, Live, suggesting those who break other Facebook policies will be banned for a period of time.

The move comes in response to the live broadcast of the terrorist attack in Christchurch, New Zealand. The social media platform broadcast the incident for 29 minutes, with around 200 people viewing the content, before it was cut. After heavy criticism, Facebook needed to act in an attempt to prevent a repeat of such a broadcast.

“Following the horrific terrorist attacks in New Zealand, we’ve been reviewing what more we can do to limit our services from being used to cause harm or spread hate,” said Guy Rosen, VP Integrity at Facebook.

“As a direct result, starting today, people who have broken certain rules on Facebook – including our Dangerous Organizations and Individuals policy – will be restricted from using Facebook Live.”

Although some might suggest this is a potential limitation of free speech principles, Facebook has had to do something about the grey areas. It is unreasonable for moderators to view and approve every piece of content, while artificial intelligence technologies are still not advanced enough to tackle the problem. Taking a merit approach, removing privileges from those who already break the rules, is a less-than adequate approach but one of the few options without shutting down the feature completely.

The ‘one strike rule’ is a tightening up of rules which already existed. Facebook has been limiting the access of those who break the platforms rules, though this is a much more stringent approach specific to the Live feature.

“From now on, anyone who violates our most serious policies will be restricted from using Live for set periods of time – for example 30 days – starting on their first offense,” said Rosen. “For instance, someone who shares a link to a statement from a terrorist group with no context will now be immediately blocked from using Live for a set period of time.”

This is an incredibly difficult equation to balance, and this is not a perfect approach. It is still reactionary not preventative, but it should limit the risk. Unfortunately for Facebook, and everyone in general, whatever is done to attempt to limit these abuses, and technological abuses in general, will only be hurdles; there will always be a way to get around the safeguards.

The only way Facebook can prevent a repeat of this incident is to shut down Live completely, however, the vast majority of those using the feature are doing so as intended. More work needs to be done, but Facebook is attempting to make progress.

Streaming platforms are starting to become less attractive

Netflix started as a platform where old-series could be relived, but now with rivals aiming to replicate the success of the streaming giant, the content world is becoming increasingly fragmented.

The big question which remains is how big is the consumers appetite for content? How many streaming subscriptions are users willing to tolerate?

The news which hit the headlines this morning concerned Hulu. Disney has come to an agreement to purchase Comcast’s stake in the streaming service, for at least $5.8 billion, in a divorce proceeding which will take five years. This transaction follows the confirmation AT&T sold its 10% stake in Hulu to Disney last month.

Disney consolidating control of Hulu is not much of a surprise to those in the industry, but fan favourites disappearing from the various different streaming services might shock a few consumers.

AT&T has also confirmed it will be pulling WarnerMedia content, such as Friends and ER, from rival’s platforms. The Office, one of the most popular titles on Netflix, will be pulled by owner NBCUniversal. The series, and other NBCUniversal content, will also be pulled from Hulu in favour of parent-company Comcast’s streaming service which will launch next year. Disney will also be pulling its headline content, the Marvel movie franchise for example, back behind its own paywall. Amazon Prime has its own exclusive originals, and YouTube has ambitions with this model as well.

Over the next 12-18 months, content will be pulled back away from the licensing deals to reside only on the owners streaming platform. Users will find the content world which they have come to love is quickly going to change. Some might have presumed the cord-cutting era was one of openness, a stark contrast to one of exclusivity in traditional premium media, but it does seem to be heading back that direction.

It is perfectly reasonable to understand why this is being done. These are assets which need to be monetized, and the subscription model is clearly being favoured over the licensing one. WarnerMedia, 21st Century Fox, AT&T, Comcast and Disney might have had an interest in the licensing model in by-gone years, but following the consolidation buzz, it has become increasingly popular to create another streaming service to add into the mix.

The issue which may appear on the horizon is the fragmented nature of the streaming world; consumers wallets are only so thick, how many streaming services can the market handle?

The test over the next couple of months, or years, will be the quality of original programming. Netflix grew its original audience through a library of shows other content companies were ignoring, but today’s mission is completely different; original and local content is driving the agenda.

The question is whether other providers will be able to provide the same quality? With subscription revenue being spread thinner across multiple providers, will there be enough money flowing into the coffers to fuel the creation of this content? Will the pressures of increased competition decrease overall quality?

Today it is very easy to find the best and deepest range of content available. You might have to subscribe to more than one service, but at the moment consumers are able to afford it. Tomorrow might be a different case. The more streaming services in the market and the more fragmented the content, the more decisions consumers will have to made. Having 4/5 services is probably unreasonable. And we’re only talking about quality of experience, the mess of different discovery engines is another topic.

The question which remains is whether the economics of a fragmented content segment can support the original content dream which has been promised to consumers, or whether the old-world of low-quality, low-budget, limited and repetitive content returns. Soon enough Disney+ will launch, as will Comcast’s streaming service, to add to Hulu, Netflix, DirecTV, Amazon Prime, YouTube’s premium service, and any others which might be in the mix.

Content will become fragmented, thinner on the platforms, before consumers wallets become strained. How long the budget for content will last in this scenario remains to be seen as executives look to cut corners and increase profitability. It’s hard to see how current trends are going to benefit consumers.

Loyalty penalties for broadband, mobile and TV finally tackled

Ofcom has introduced rules which will aim to tackle ‘penalties’ imposed on renewing customers by broadband, mobile and content providers.

As part of the new rules, providers will have to inform customers 10 to 40 days prior to the end of the customers contract, the period where financial penalties would be applied for changing providers. In the notification, customers will be told the end date of the contract, differences in contract pricing moving forward, termination conditions and availability of cheaper deals.

Although customers will still have to be proactive in contacting rival competitors for better deals on the market, the hope is a more transparent approach with spur consumers into finding the best possible option. Telcos will have a year to ensure the right business processes and technologies are in place to action the rules.

“We’re making sure customers are treated fairly, by making companies give them the information they need, when they need it,” said Lindsey Fussell, Ofcom’s Consumer Group Director.

“This will put power in the hands of millions of people who’re paying more than necessary when they’re no longer tied to a contract.”

The initial idea was put forward back in December, with the belief as many as 20 million UK consumers have passed their initial contract period and could be paying more than necessary. The Department of Digital, Culture, Media and Sport escalated the issue in February with a public consultation aimed at moving the industry towards a position where loyalty was rewarded, ending aggressive cultures towards customer acquisition.

In September last year, the UK Citizens Advice Bureau (CAB) launched a super-complaint with the Competition and Markets Authority (CMA) suggesting service providers over-charging renewing customers to bring in an extra £4.1 billion a year. Research commissioned by Broadband Genie has found many over 55s could be paying too much for their broadband service but lack the knowledge or confidence to choose a new package.

“Pre-emptive alerts and information about broadband and TV contract periods are good news for consumers since many have in effect been paying a premium for their loyalty once out of contract,” said Adrian Baschnonga, EY’s Telecoms Lead Analyst. “Today’s rules pave the way for a more proactive dialogue between service providers and their customers, which can unlock higher levels of satisfaction in the long term.”

While it will certainly take some work to bed in, such rules have the potential to move attitudes in the industry to prioritise customer retention over acquisition to meet profitability objectives. Much research points to this being a more rewarding approach to business, though few in the telco space practice this theory.

“uSwitch’s research found that the aggregate cost of out-of-contract charges to telecoms consumers is £41 a second,” said Richard Neudegg, Head of Regulation at uSwitch.com. “This is why time is of the essence – everyday spent waiting for these notifications to be rolled out, another £3.5 million is overspent on these services – meaning that more than £350 million has already been wasted since the consultation closed in February.

“While it has been a long time coming, this is an important step by the regulator to address what has long been a clearly unacceptable gap in the rules, penalising consumers to the tune of millions.”

This is a step in the right direction, but it will take more to ensure telcos shift their culture. The idea of customer acquisition over retention is deeply engrained in every aspect of the business and will define how the business operates. That said, progress is progress.