Elliot set to challenge AT&T leadership over media strategy – report

The apparent anointing of John Stankey as the next AT&T CEO is reportedly what prompted Elliott to announce its activist intentions.

Right now this insight comes courtesy of the WSJ alone, which has chatted to some people who think they know what they’re talking about. The report says AT&T Randall Stephenson plans to call it a day soon and has been grooming his mate John Stankey to take over. Stankey was recently promoted the specially-created role of COO, which would be easy to view as a stepping stone to CEO, especially since most of the company now seems to report directly to the COO.

Shortly after activist investor firm Elliott Management announced it had acquired a significant shareholding in AT&T and intended to use that position to pressure the AT&T management into making changes that it reckons will significantly boost the share price. That is the ultimate aim of activist investors like Elliott, which are sometimes referred to as vulture funds.

The WSJ piece mainly seeks to flesh out Elliot’s objectives. It claims the closed, cronyish succession plan is what provoked Elliott into breaking cover and going public with its concerns. The continued promotion of Stankey is considered to be symptomatic of a botched approach to AT&T’s strategy of diversifying towards media, as he has been put in charge of it all, rather than leaving it to the media experts already in place at the acquired companies.

Elliott has rich form in messing with the grand plans or corporate execs, having recently succeeded in preventing Vivendi from controlling Italian operator group TIM while only owning a quarter of it. AT&T is an order of magnitude larger but the same principles apply. If Elliott can convince other AT&T shareholders that its plans for the company will give them a better return than those of Stephenson and Stankey then it could initiate a proxy battle for control of the company.

The handling of the DirecTV acquisition seems to be especially derided by Elliott, which seems to think AT&T should cut its losses and flog it. But its complaints don’t seem to stop there, with Stankey’s control of WarnerMedia apparently a source of grievance too. A lot rests on AT&T’s imminent SVOD service, HBO Max, which will have to succeed in a very competitive market to reassure its investors.

Verizon correcting the mistakes of yesteryear with Tumblr sale

There are good acquisitions and bad acquisitions, and then there was the prolonged saga with Verizon acquiring Yahoo’s media assets.

In 2017, Verizon decided it wanted to scrap with Google and Facebook to secure a slice of the lucrative online advertising bonanza. Its route to these riches was acquiring Yahoo’s media assets, an on-going saga was has led to little more than headaches for the telco. Now Verizon has announced it will get rid of one of the adopted problem children.

Financials of the deal have not been announced, though WordPress owner Automattic will acquire Tumblr.

“Tumblr is one of the Web’s most iconic brands,” said Automattic CEO Matt Mullenweg. “It is an essential venue to share new ideas, cultures and experiences, helping millions create and build communities around their shared interests. We are excited to add it to our lineup, which already includes WordPress.com, WooCommerce, Jetpack, Simplenote, Longreads, and more.”

Perhaps one of the biggest problems with Tumblr is figuring out what to do with it. In its own right, Tumblr is a very successful platform, home to 475 million blogs, though translating such potential is often a difficult task, requiring forward- and out-of-the-box thinking. Automattic looks to be a much more suited business to realise this ambition than the traditional telco.

“Tumblr is a marquee brand that has started movements, allowed for true identities to blossom and become home to many creative communities and fandoms,” said Verizon Media CEO Guru Gowrappan.

“We are proud of what the team has accomplished and are happy to have found the perfect partner in Automattic, whose expertise and track record will unlock new and exciting possibilities for Tumblr and its users.”

For Verizon, this is another chapter is a pretty miserable story so far. The entry into the media world started on shaky grounds with huge data leaks and hasn’t got much better. It does still own some very attractive titles, TechCrunch and Huffington Post for example, though in laying off 7% of staff last October as well as 15% of UK staff in January demonstrates the pain.

The telco has to make the media business work for it, it did make a $5 billion bet after all, but it has not been a simple quest to date.

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).

Of the many challenges Facebook faces its intrinsic parasitism is the biggest

Facebook has recently bemoaned the decline in US local news sources, but a major reason for this has been the collapse in media advertising revenues.

Two companies are largely responsible for this decline: Google and Facebook. As digital replaced analogue as the primary way of consuming media, advertising moved to the main online content aggregators, specifically its dominant search engine and its dominant social media service. Not only did this suck revenue away from traditional media, it forced many media to resort to low-quality ‘clickbait’ journalism in order to drive the volumes of traffic its remaining advertisers increasingly demanded.

By definition aggregators don’t produce their own content and are entirely reliant on a steady flow of third party to keep its users active and the revenues it makes on the back of their searching and sharing flowing. This model is, therefore, intrinsically parasitic and comes with the major problem that parasites eventually kill their hosts.

Facebook has belatedly recognised this dilemma and launched a new initiative called ‘Today In’ late last year, that was designed to bring greater attention to local stuff on the site. On top of that it also said it would throw millions of dollars at local news earlier this year. Despite this, however, Facebook yesterday was moved to lament the existence of ‘news deserts’ in the US and is contributing to research to find out what is the cause of them. Some people seem to think that’s somewhat redundant.

facebook locust tweet

There are, of course, plenty of other threats to Facebook’s business model. The Cambridge Analytica scandal raised profound concerns around the use of all this personal data we’re sharing with Facebook. Meanwhile its role in a wide range of high-profile events ranging from elections to terrorist atrocities have put it under enormous pressure to curate and censor its content much more quickly and thoroughly than it currently does.

The parasitic business model is also at the core of a lot of this. In many ways Facebook operates like a very large media organisation, as it makes money by serving ads against traffic to content on its side. But since it doesn’t produce that content it is currently treated as a platform rather than a publisher, with a consequent freedom from direct responsibility for what it presents to its users.

It’s becoming increasingly clear that websites designed to host user-generated content are neither platforms nor publishers, but something in between. Politicians and regulators are increasingly calling for new rules and laws to address this paradox and it seems highly probable that these will both threaten revenues and significantly increase overheads for these companies.

So great are these challenges to Facebook that the company is already publicly contemplating a fundamental shift in its business model, with more controlled, private sharing as its new focus. This coincides with a its core revenues base, US Facebook users, clearly peaking, as you can see in the following slides from Facebook’s recent quarterly earnings presentation.

Facebook DAUs

Facebook ARPU

While user engagement has peaked in the US, Facebook still derives a disproportionate amount of revenue from that market thanks to its much higher ARPU there. But there is growing evidence that this may be increasingly coming from Instagram rather than the core Facebook product and mobile now accounts for nearly all of its revenues. All this points to the distinct possibility of Facebook, as we know it, being unrecognisable a decade from now as the legacy platform undergoes a managed decline.

Which brings us back to the parasitism issue. Facebook’s long term strategy seems to be to completely exhaust its current host while at the same time cultivating a new one. It’s hard to view all this hand-wringing about traditional media as anything more than a pretence at seeking a symbiotic relationship with it while it bleeds it dry. Independent journalist Tim Pool, as ever, has an instructive take on the broader situation.

 

British parents are increasingly worried about the Internet – Ofcom

Research into children’s media consumption published by UK telecoms regulator Ofcom revealed that only 54% of parents agreed the benefits of the internet outweighed its risks, the lowest level since 2011.

The report, “Children and parents: Media use and attitudes report 2018” (and its Annex) and “Life on the small screen: What children are watching and why” were made by Ofcom with analysis of 2,000 British children aged 3-15 years and their parents. Less than half of the parents of 3-4-years agreed that the internet is doing more good than bad.

When prompted with the major concerns parents have about their children’s online life, “companies collecting information about what their child is doing online” came the top with 50% of parents expressing concern. Three other issues have increased in their level of concern from the similar research a year ago: the child damaging their reputation (42% vs. 37%), the pressure on the child to spend money online (41% vs. 35%), and the possibility of the child being radicalised online (29% vs. 25%).

Ofcom 2019 1 parent concerns

Published by Ofcom today, the reports showed that on average, a 5-15-year old child would spend more than four hours a day in front screens, including 2 hours 11 minutes online (same as a year ago) and 1 hour 52 minutes watching TV on the TV sets (8 minutes shorter than 2017).

“Children have told us in their own words why online content captures most of their attention. These insights can help inform parents and policymakers as they consider the role of the internet in children’s lives,” said Yih-Choung Teh, Strategy and Research Group Director at Ofcom. “This research also sheds light on the challenge for UK broadcasters in competing for kids’ attention. But it’s clear that children today still value original TV programmes that reflect their lives, and those primetime TV moments which remain integral to family life.”

There are differences in media consumption patterns between age-groups and between social groups. For example, the older the age group, the more time the children would spend online, from less than nine hours per week for the 3-4-year olds to 20.5 hours for the 12-15-year olds. Or, children of the 3-4-year old group in C2DE households spend more time going online, playing games and watching TV on a TV set, compared to those in ABC1 households.

Ofcom 2019 2 weekly hours

When it comes to device ownership and the devices used for media consumption, the research found that 1% of 3-4-year olds already have their own smartphones, and 19% have their own tablets. The penetration rates go up to 83% and 50% respectively in the 12-15-year old group. Again, there are differences between sub-groups on the devices used to consume media on their devices. While TV sets are still being used by more than 90% of children across all the sub-groups, the percentage of them also watching TV on other devices increased from 30% in the 3-4-year olds to 62% in the 12-15-year group.

The penetration of streaming services including Netflix, Now TV, and Amazon Video is already fairly high among all the sub-groups, with 32% of 3-4-year olds using at least one of them, going up to 58% in the 12-15-year olds. But YouTube is still leading in popularity. 45% of 3-4-year olds have watched YouTube, the penetration would go up to 89% in the 12-15-year olds.

As well as content consumption, content creation is also on the rise among children, with “making a video” one of the most popular online activities. While on average 40% of 5-15-years have made an online video, nearly half of all 12-15-year olds have done so.

Ofcom 2019 3 making video

Time spent on online gaming has remained largely unchanged from a year ago, ranging from a little over 6 hours per week in the 3-4-year group to nearly 14 hours in the 12-15-year group. But gaming is the online activity that demonstrates the biggest gender disparity. While boys in all age groups spent more time on gaming than girls, the difference went up to over 7 hours in the 12-15-year olds. On average girls in this group spent 9 hours 18 minutes playing online games while boys of this age spent 16 hours 42 minutes.

Social networks are another important type of media consumption by children. Facebook remained to be the most popular social media among the 12-15 years group, but its downward trend has continued to the lowest level of 72% penetration since the high of 97% in 2011. Gaining popularity are Instagram (65%, up from 57% in 2017), Snapchat (62%, up from 58%), and WhatsApp (43%, up from 32%). More significantly, when asked to name their “main site or app”, equal number of 12-15-year olds (31%) named Facebook and Snapchat.

Ofcom 2019 4 social networks

Astoundingly, 1% of 3-4-year olds, 4% of 5-7-year olds, and 18% of 8-11-year olds already have social network accounts, despite that most social networks set their minimum age at 13. WhatsApp raised its minimum age for EU users to 16 prior to GDPR came into effect. At the same time, less than a third of parents were aware of Facebook’s age limit, with even less awareness for the age restrictions of Instagram and Snapchat.

Ofcom 2019 5 parent awareness

Verizon cuts 7% of media jobs as calamitous headache continues

To say Verizon’s efforts to capitalise on the digital advertising revenues have been troubled would be an early contender for understatement of the year.

Following a $4.6 billion write down during the last quarter, Verizon has announced it will be laying off 7% of staff, roughly 800 people, at the media business. In an email seen by CNBC, Verizon Media Group CEO Guru Gowrappan positioned the cuts as part of a broader strategy to turn around the disaster, focusing on three key areas:

  • Growing the ‘member-centric ecosystem’
  • Increasing usage/spending on its B2B products
  • Increasing video supply and distribution

“Last quarter, our leadership team worked to create the strategy that will propel Verizon Media,” Gowrappan said in the email. “We honestly assessed where we are and outlined ambitious but achievable goals that poise us for growth. We shared it broadly with you, and together committed to deliver on our OKRs with meticulous planning, collaboration and rigorous execution.”

In short, the acquisition of Yahoo has been nothing short of a disaster for Verizon. When it was first announced, despite the logical ambition to diversify revenue channels, some were looking at the deal with curiosity. Yahoo certainly had some interesting media properties, the Huffington Post and Tumblr for example, but it didn’t seem like the best way to spend $4.5 billion.

In the months that followed, a monumental data breach emerged, reportedly effecting every single Yahoo account, a decision was made to kill off a very popular news aggregation app, boss Tim Armstrong decided to quit, Verizon had to stomach a $500 million pre-tax charge relating to severance, acquisition and integration costs, and it ditched the Oath branding. All of this was before the December write down of $4.6 billion, and not taking into account the previous acquisition of AOL.

Now in the pursuit of salvaging a gargantuan headache, the team will be trimming 7% of jobs to turn around the business. Verizon might have been searching for alternative revenues and a way to demonstrate to shareholders it can make an impact in blossoming corners of the digital economy, challenging the likes of Google and Facebook for advertising dollars, but this was nothing short of a calamity.

All we now need is a fire, an unplanned pregnancy and Armstrong to appear as the new local pub landlord, and you wouldn’t be able to tell the difference between Verizon’s media business or an episode of East Enders.

You can read the full email below (courtesy of CNBC):


 

Team –

Last quarter, our leadership team worked to create the strategy that will propel Verizon Media. We honestly assessed where we are and outlined ambitious but achievable goals that poise us for growth. We shared it broadly with you, and together committed to deliver on our OKRs with meticulous planning, collaboration and rigorous execution.

As hard as it may have felt at times, we’ve made some great strides to serve our customers globally – from consolidating ad platforms, to expanding the Microsoft partnership, growing live programming and content offerings for our Supers, and prioritizing and launching 8 new or substantially updated products at Build It 2018.

In Q1, we’ll have 3 priority areas: first, grow our member-centric ecosystem with must-have mobile and video products and stem desktop declines; second, increase usage and spends flowing through B2B platforms; third, expand our video supply and overall distribution through partnerships. As we work to deliver on both short-term objectives to stabilize our business, we are also focused on long-term strategies that will accelerate distribution, growth and innovation as part of Verizon.

This week, we will make changes that will impact around 7% of our global workforce across the organization, as well as certain brands and products. These were difficult decisions, and we will ensure that our colleagues are treated with respect and fairness, and given the support they need. Resources and other career support will be provided to help our team members navigate the transition.

In addition, we’ve completed an exhaustive review to prioritize the programs that are currently in our portfolio – consumer products, ad products, platform features, partnerships and data centers.

While every business unit has to manage their P&L, these decisions are being made to streamline resources and invest in opportunities that will help us grow. You all know by now that I deeply believe in an owner mindset and focus as a key ingredient for success – going deep on fewer, key things that will have the greatest impact on our customers and business, and doing them exceptionally well.

I want to be clear that we will continue to scale, launch new products and innovate. We are an important part of Verizon and the $7+ billion in revenue we generate through our member-centric ecosystem puts us among the top tech/media companies in the world. Now is the time to go on the offensive, go deep on our big priorities and do everything we can to advance the business. We will talk more about this and answer questions Friday at Open House.

Our world continues to evolve at a faster pace, and we need to leap ahead of consumer trends. We are reimagining our future, and building new products that will become invaluable to consumers today and in the years to come. That’s the spirit of our company and the spirit we all embody as its Builders.

Best,

Guru

UK news media want tech giants to pay them annual license fees

A UK governmental review into threats to the press, principally from the internet, has led to calls for tech giants to pay for news content that appears on their platforms.

The Cairncross review asked for submissions on the matter earlier this month and has so far received them from the News Media Association, press regulators IPSO and IMPRESS, and the National Union of Journalists. The NMA one is headed “NMA Calls For Licence Fee Agreement With Tech Giants”.

“A fair and equitable content licence fee agreement would ensure that news media publishers are appropriately rewarded for the use of their content by the tech giants, safeguarding the future of independent journalism which underpins our democracy,” opened the NMA press release.

“The primary focus of concern today is the loss of advertising revenues which have previously sustained quality national and local journalism and are now flowing to the global search engines and social media companies who make no meaningful contribution to the cost of producing the original content from which they so richly benefit.”

On one hand this smacks of special pleading by an industry that has found its business model rendered obsolete within a generation. But on the other there are good arguments that the press should receive special treatment given their democratic role in holding power to account and informing the population. This is also a good time to be trying to extract money from tech giants, following the approval of tough new digital copyright rules by the EU.

Given the virtual impossibility of tracking every news link published on every digital platform, the plan seems to be to come up with some kind of arbitrary license fee, essentially a special tax, and impose it on any tech company that is perceived to be profiting from news stories in any way. This cash would then be handed over to news media organisations according to a formula yet to be determined.

One of the potential variables for determining how much of a kick-back a given title would get could be the highly subjective concept of ‘quality. The NUJ and the regulators all dwell on this a fair bit but seem to all have their own definitions of quality.

“The union believes that the best definition of what constitutes ‘high quality journalism’ is work that complies with the NUJ’s long-established ethical code of conduct and the NUJ’s submission to the review highlights that NUJ members work hard to produce quality content for websites and newspapers in extremely challenging circumstances,” said the full stop-averse NUJ.

“Another problem with the move towards accessing our news online is the proliferation of fake news, often disseminated through social media,” said IPSO. “Without a thriving press, there’s little antidote to online disinformation – and the effect this might have on the public’s ability to participate meaningfully in society should be of concern to us all.”

IMPRESS wants the UK government to “create a new legal identity – ‘Public Interest News’ – for the publishers of high-quality journalism. This identity would be distinct from charitable status, so that publishers could still publish political news and comment, but it would have some of the benefits of charitable status.”

By definition a free press should be unshackled by external quality control. The European Commission has recently indicated it would like to regulate newspapers to prevent them criticising it and campaigning organisations such as Hacked Off (which supports IMPRESS, incidentally), want to restrict the press according to their own systems of weights and measures.

But that doesn’t mean we should ignore this issue. Google and Facebook account for a very high proportion of all ad spend in most places they operate and a lot of the traffic they monetise is driven by content produced by professional journalists. Even alternatives to mainstream media are dependent on tech platforms such as YouTube and Twitter. While this internet tax has many flaws it is at least a reminder to the tech giants that if they don’t do more to ensure a healthy and diverse news media environment, governments might take matters into their own hands.

IBC 2018 – TMT industry must focus on innovation to reignite growth in core services

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Gavin Mann, Global Broadcast Lead for Accenture, offers a preview of the key topics that will define IBC 2018.

As big tech companies move into content creation and distribution, media and entertainment businesses face an unprecedented array of challenges from new competition to the growing purchasing power of the digital native generation.

Established players must safeguard their core business to maintain and nurture the steady reliable cash flow that comes from their legacy and established customer bases, while forging a path to unlock new revenue streams through innovation. As technology continually evolves, there is no finish line and service providers must get used to continual change.

At IBC, disruption in the industry will be the main topic driving conversations at the show. Accenture believes that there are several ways the industry can embrace technology to unlock new innovation and equip businesses for future success, which will be major points of focus at the RAI. Here are more details about each:

Advanced TV Advertising – Making it easier for advertising buyers

Audiences continue to become more fragmented around a growing number of video offerings and the media industry is having a tough time keeping up with measuring viewership and charging for it. While media companies typically try to sell their own ad inventory with proprietary methods, coming together with a single methodology for tracking content and creating niche data sets in a manner similar to what is being done in the online space, may prove crucial to the industry’s future.

Consortiums like Open AP in North America allow advertisers to use a standard group of data sets to define valuable segments of consumers, which could be anything from expectant mums to first-time house buyers. Each company within the Open AP consortium continues to sell its own commercial time and space, but the wider technology offering means advertisers will be able to access specific segments at greater scale.

We expect many execs will be meeting counterparts at IBC to discuss starting or expanding similar data co-operatives in Europe and around the world.

Creating a culture of innovation

Television Understands Innovation: From revolutions in display (black & white to colour, screen formats), to step changes in choice with the entry of non-terrestrial media (satellite and cable), through to the relative explosion of variety as countries transition from analogue to digital, television providers have always combined technology, insight and opportunity to stay ahead. This drive for creative transformation has been a constant, even though in many countries broadcasters and platform operators alike have followed a well-trodden path – from single, national institutions at the birth of the industry to today’s modern competitors. The recent, rapid growth of platform players offering IP-based video consumption has created a new urgency for innovation, driven both by investor perceptions – and reality on the ground.

Investors have bought into the huge future valuations of platform players, who have created scaled global footprints based on new technologies, value chains and business models. Investors remember the slow-to-adapt industries, or those simply on point when the first digital shots were fired. For video to avoid the fates of so many music and newspaper companies, investors expect a strong digital narrative which sets out steps to survive and thrive in this new context.  investors expect established video businesses to articulate clear strategies. They want to see real, sustained innovation along this journey, differentiation and energetic competitiveness.

Established players can, and need to, apply the full force of digital innovation across their entire business, decoupling decision making and operational processes from legacy ways of working. They’ll realise benefits in almost every domain of a traditional video business:

  • Driving revenue growth
  • Finding cost efficiencies
  • Unlocking trapped value to be deployed more profitably

Driving innovation from within lays the strongest possible foundations for the competitive positioning of any video business. It seeks to create a lean, agile culture of rapid innovation and experimentation, which is alive to the major decision points and options in a company’s future.

Changing the innovation culture is a complete journey of transformation that rethinks the operating model, the value tree, skills and core KPIs. Investments to drive growth in the core business must also be capable of underpinning emerging digital ones.

Companies without an innovation story, who don’t change their culture to be able to innovate, will see shareholders lose confidence that they can deliver future value. Established players need to move decisively to apply the full force of digital innovation across their entire business, decoupling decision making and operational processes from legacy ways of working, therefore removing silos from the operating model and workforce.

Will Voice Assistants disintermediate established brands?

The smart home continues to mature significantly as the digital giants, telcos, cable operators, retailers use Voice Assistants as a license to experiment and bring to market new hardware and services. The emergence of voice as an interface, powered by Artificial Intelligence, has seen Voice Assistants impact on marketing grow exponentially as experiences become curated and personalized.

Increasingly, algorithms are performing the role of gatekeeper between consumers and brands, and they are indifferent to the branding efforts that influence buying decisions people make for themselves. This poses a potential problem for brands looking to connect with consumers.  Think what happens when you ask a voice assistant to order some AAA batteries, and what that means for the valuable established brands which still have “prominence” on the supermarket shelf.

Media and Entertainment companies must quickly get a grip on these new algorithm gatekeepers and learn to navigate and engage with them. Many should consider creating collaborative or complementary services on an existing platform to find new ways to prompt their brand and purchases. All will need to consider carefully where a product or service can be designed to make it past the gatekeeper, and how to earn customer loyalty once it does.

Why the media industry should embrace blockchain

As media companies grapple with disruptive market conditions and increasingly demanding customers, blockchain can redefine how they can engage with their customers, partners and broader ecosystems. The first of these industry trends is strategic co-opetition, driven by consumers’ insatiable appetite for content. These ecosystems offer digital trust models ideal for securing rights, remediating financial transactions, sharing the right data, and optimizing the value chain.

One blockchain opportunity in media is to secure data. Media and platform companies have nothing if they cannot protect data and grant access only to those who need it. Blockchain technology is poised to be a game-changer in data security. It creates an auditable trail of an asset whether it is a device, access rights or content. No one owns this history, which creates a new level of visibility and transparency.

Blockchain can reduce piracy by enabling digital rights management—a boon for regulating copyright infringement. It can also make content provenance more transparent by validating authors and granting them access to distribution channels as trusted sources. Imagine the value of this in a world where “fake news” is part of the cultural and political lexicon. And as companies provide customers with their personal data to meet regulatory requirements, blockchain can capture and store a tamper-evident, secure and up-to-date history of personal usage data for better data portability. With so many use cases, blockchain promises to be an unprecedented data security breakthrough for this and many other industries.

Artificial Intelligence Adoption in Media & Entertainment

There is no doubt that AI will be a hot topic at this year’s show. We are moving beyond the phase of everyone talking about it to businesses actually using it to drive business benefits. Yet although it’s gathering pace rapidly, AI is still a new technology and many media companies are still grappling with what is possible and how they can leverage it to deliver true value.

There are many use cases in the industry that we’ll be hearing about spanning from basic automation of back office processes, to automating compliance checks, automated creation/optimization of programming schedules, or even using AI to ingest and interpret complicated royalties’ contracts to assess payments required.

One story we’ll be hearing about at IBC is the topic of content curation. We all know just how important content has become – Disney starting its own streaming service is just one example of media businesses putting content at the heart of their strategies. Together with the right content, any company looking to generate serious growth simply must provide a good customer experience. Artificial intelligence could be part of the answer to next generation content curation. It allows businesses to tailor what they send to individual customers, which would be impossible to do manually because of the sheer volume of content and customers.

 

Gavin Mann AccentureGavin Mann is the Global Broadcast Lead for Accenture. Digital transformation has been at the heart of his work for the last 20 years. Gavin has worked across multiple industries including broadcast, music, movies, gaming and publishing.

Oath boss reportedly edging towards the exit

Tim Armstrong, the boss of Verizon’s media unit Oath, is reportedly discussing terms to exit the business.

The reasons behind the move are unclear for the moment, though, according to the Wall Street Journal, there have been internal disagreements on how to best utilise Verizon’s lofty position in the wireless world to aid the growth of Oath. What does seem to be a frustrating couple of years might be coming to a close for the man who spearheaded Verizon’s efforts to capture digital advertising revenues.

Armstrong entered the Verizon stronghold as a result of the telcos acquisition of AOL, where he was CEO, and since has overseen the merging of AOL and Yahoo to its current Oath livery. What was supposed to be a challenge to the Facebook and Google dominance of advertising revenues in North America has whimpered, with seemingly very little progress being made.

Over the first six month of 2018, Oath contributed roughly $4 billion to the Verizon coffers compared to the $44 billion generated by the wireless unit. According to data from eMarketer, Google accounts for 36.3% of the digital advertising revenues in North America, while Facebook collects 19.3%. Oath collects 2.7% in comparison.

One of the difficulties for the business seems to be a disagreement between Verizon and Oath executives on how to best monetize subscriber data. Sources have suggested Oath employees believe those in the wireless business are being too conservative when it comes to using the data to cross pollinate opportunities for the content and media business. Although there is an opportunity to make cash, the wireless executives are apparently worried about whether such activities would lead to increased churn.

This might well be the case, though some might wonder whether this point was raised prior to Verizon spending $9 billion on acquiring content businesses. The money changing hands is certainly not chump change, and it would be extremely worrying to think these purchases were made without thinking through the practicalities of how a media business would work.

At the time of writing, Verizon has refused to comment on the situation. The fact it has not outright denied the talks suggests there is an element of truth. Perhaps Armstrong is simply tired of dealing with incredibly risk-adverse executives, a perfect stereotype of the telco industry, and is keen to get back into the more adventurous media space.

UK media and telco industries demand more red tape for social media content

A coalition of UK media and telco businesses have written a letter demanding the UK government introduce an independent regulatory oversight of the content carried over social networks.

In the letter written to the Sunday Telegraph, the BBC, Sky, ITV, Channel 4, BT and TalkTalk have attacked unregulated tech giants Facebook, Google and Twitter, suggesting the creation of a new watchdog with the purpose of tackling the increasing presence of abuse and misinformation online is the way forward.

“We do not think it is realistic or appropriate to expect internet and social media companies to make all the judgment calls about what content is and is not acceptable, without any independent oversight,” the letter states. “There is an urgent need for independent scrutiny of the decisions taken, and greater transparency.

“This is not about censoring the internet: it is about making the most popular internet platforms safer, by ensuring there is accountability and transparency over the decisions these private companies are already taking.”

Pressure to more closely regulate the newcomers to the communications game is hardly a new phenomenon; the heavily regulated telco industry has been trying to level the playing fields for years. With the introduction of social media platforms such as Facebook or video content sites like YouTube, stress has been placed on the more traditional communications companies. Whether it is being forced to innovate or having core revenue streams destroyed, digital transformation is much more than an industry buzzword, it is a necessity for survival.

Unfortunately for the telcos, they are largely playing to different rules when it comes to how personal data can be used to deliver these services, while also being held accountable for the vast expense of deploying the all-important communications infrastructure. Any opportunity to have a dig at the digital new-boys will be taken, and this is what this letter seems to be.

This is of course a political pain-point for the social media players right now, and the traditional players are taking full advantage of the situation to rain down some red tape. Governments around the world are grappling with the difficulties of how to govern social media platforms, protecting users from abuse while also maintaining free speech. While there are some very obvious examples of what shouldn’t be allowed, the majority of the time judgement on what posts are acceptable and which are not is a hazy line.

In truth, the social media giants have created the problem for themselves. For years, they positioned themselves as curators of content, not owning or taking responsibility for it, but by creating successful algorithms to personalize feeds and suggested content, they have demonstrated an exceptional ability to influence and control content. Some might ask if they can figure out when the best time to position adverts for car insurance or specific holiday add ons is, why can they not tackle the rising tide of abuse and misinformation?

The answer probably lies in the middle of it being incredibly difficult and contentious, and it is more convenient (financial rewarding) to focus on honing the effectiveness of advertising platforms. Work is being done to try and curb the negative impacts of social media, though whether this is enough to convince the government the segment is capable of self-regulation is suspect.

Boresome bureaucrats never usually need a reason to throw around the red tape, though pressure from the telco lobby might just fuel the anti-social media rhetoric which is currently echoing around the Houses of Parliament.