Presidential Candidate Warren Seeks to Regulate Big Tech, Gets Indirect Support from Sky Boss

Sen. Elizabeth Warren (D-Mass.), who is running for president in the 2020 election, wants to break up the mega tech companies such as Google, Amazon, Facebook and Apple — citing antitrust issues.

Specifically, Warren would classify the tech companies with annual global revenue above $25 billion as “platform utilities,” thereby forcing them to split up business units within their corporate structures.

The lawmaker would also look to unwind what she called “anti-competitive” mergers such as Amazon’s acquisition of Whole Foods and Zappos; Facebook’s acquisition of WhatsApp and Instagram, and Google purchase of Waze, Nest and DoubleClick.

Indeed, Warren claims nearly 50% of all e-commerce is generated by Amazon, while 70% of Web traffic migrates through sites owned and operated by Google and Facebook.

The senator, in a March 8 post, argued that the federal government’s lawsuit in the 1990s against Microsoft regarding its (then) dominance in Web browsing paved the way for the emergence of companies such as Google and Facebook.

“Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?” Warren wrote. “The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services.”

Notably, at an investor confab in London, Jeremy Darroch, group CEO at Comcast-owned European satellite TV operator Sky, questioned the U.K. government’s lack of oversight on big tech.

Jeremy Darroch

“My first instinct in these situations is always to look for self-regulation,” Darroch told the Deloitte Enders Media and Telecoms Conference 2019. “But there are times when that approach won’t work. And I am pleased that the government, and indeed politicians of all persuasion have come together to recognize this is one of those times.”

Darroch contends that as big tech’s reach permeates into all aspects of society, their approach to rules and practices will be self-serving and not necessarily to the betterment of the individual.

He said traditional broadcasters and pay-TV operators must adhere to regulation on content, while video delivered through YouTube and Facebook is given a free pass.

“This is in part because we are in an entirely different world to the one tech platforms were born into,” Darroch said. “Where policy makers once saw their role as fanning the flames of growth for these businesses, they now recognize that they need to apply the same framework to this sector as they do every other.”

New Zealand Looking to Tax Web Giants Amazon, Google, Facebook

New Zealand Feb. 18 joined the European Union and Australia in seeking to tax Internet behemoths such as Amazon, Google and Facebook on revenue generated within its border.

Prime Minister Jacinda Ardern made the announcement in a post-cabinet press conference.

The proposed 2% to 3% tax would apply to any purchases and services sold by Internet firms regardless of their actual physical presence in the country.

“Some companies can do significant business in New Zealand without being taxed for the income they earn,” Ardern said. “This is not fair, and this is not sustainable.”

Indeed, Google’s subsidiary in New Zealand reportedly paid $393,000 in taxes in 2017 despite generating hundreds of millions in revenue.

The government said the tax could generate upwards of $55 million in additional annual revenue.

“Our current tax system is not fair in the way it treats individual tax payers, and how it treats multinationals,” said Ardern.

The move by New Zealand mirrors efforts in the United States by individual states such as South Dakota, which had its e-commerce tax lawsuit against online furniture retailer Wayfair reached the U.S. Supreme Court.

The high court last summer ruled states could charge taxes on companies doing business in the state without an actual physical presence.

A Georgia lawmaker this month proposed legislation seeking to tax digital entertainment services such as Netflix and Spotify 4% in an effort to compensate for declining pay-TV taxes statewide.

Such a user tax currently exists in Hawaii, Washington and Pennsylvania.

 

CEO Zuckerberg: Facebook Watch Going ‘Mainstream’ in 2019

Facebook launched its Watch streaming video platform in 2017 as competition to YouTube and other over-the-top platforms.

Despite initial claims of 50 million monthly viewers, and content spend approaching $1 billion, Watch has reportedly failed to connect with its targeted audience: teenagers.

In fact, just 36% of the desired demo used Facebook in Fall 2018 — down from 52% during the same time period in 2016, according to analyst firm Piper Jaffray.

Indeed, 85% of teens are opting for Instagram (which Facebook owns), followed by Snapchat (84%) and Twitter (47%).

As a result, Facebook is looking to expand the Watch audience while also hoping to further engage younger viewers through social interaction, according to CEO Mark Zuckerberg.

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Speaking on the Jan. 30 fiscal call, Zuckerberg said 400 million users now engage with Watch monthly, including about 20 minutes of content daily.

Specifically, the founder/CEO said Facebook has directed Watch users interested in longform video to engage in content more easily through the ‘Watch Party’ app that allows them to share live streams among friends.

“These are all things that make it so the video-watching experience isn’t just about passive consumption but about interaction, and that’s going to, I think, help really drive engagement as well,” Zuckerberg said.

In addition, the social media platform is focusing on content that resonates with wider audiences and thereby enhances monetization opportunities for creators — and Facebook.

Watch has scored hits with Jada Pinkett Smith’s talk show, “Red Table Talk,” critically-acclaimed drama series, “Sorry for Your Loss,” and “Sacred Lies”; interactive reality show, “Confetti,” and next year’s reboot of “MTV’s The Real World.”

“That has allowed us to really increase the amount of video that people are watching without getting in the way of the core mission of what we do, which is helping people interact,” Zuckerberg said.

 

 

Viacom CEO Bob Bakish Focusing on Content in Fragmented Market

LAS VEGAS — For Viacom, content truly is king, according to CEO Bob Bakish, who is forging a “culture of content” at the company.

“I continue to believe there’s a lot of value in assets that we already own,” he said Jan. 9 during the Variety Entertainment Summit at the CES show in Las Vegas.

While the Walt Disney Co., with its Fox merger and pending SVOD service, and WarnerMedia, through the AT&T merger and its own pending streaming service, are leveraging consolidation for greater distribution clout in the fragmented market, big deals aren’t necessarily the best path, he said.

“Vertical integration is very much in vogue,” but historically it “doesn’t tend to work,” Bakish said.

“Bigger is not always better,” he said.

In fact, rather than bulking up to compete with online services, he pointed out Viacom produces shows for Netflix, Amazon and Facebook. For instance, the show “Jack Ryan” is on Amazon. The company launched Viacom Digital Studios to produce social media friendly content for outlets such as Facebook.

“Viacom doesn’t really require a transformational deal,” he said. Instead, the company is doing what he calls “accelerant deals,” such as recent pacts to acquire VidCon, which celebrates online video creators, and Awesomeness TV, which produced To All the Boys I’ve Loved Before released on Netflix.

The goal is “unlocking opportunity through truly multi-platform distribution,” whether it be AVOD, SVOD, legacy platforms or other models, he said.

“Relative to some of our peers, we’re further along in this transition,” he said.

One of the new technologies he is enthused about is the coming 5G mobile delivery standard.

“Mobile distribution is what will turn this [content monetization] decline on its head,” Bakish said.

5G and the move to 10G for traditional TV distribution will both expand the pipelines for content, he noted.

He’s also intrigued by self-driving cars, which will open up more free time for consumers to view entertainment.

Content owners cannot “crawl into the ivory tower” and hope the future will go away, he said.

“You can look at this transformation as glass have full or half empty. I’m half full,” he said.

Facebook: 75 Million People Consume Watch Video Daily

In the three months since Facebook launched ad-supported video streaming service, Facebook Watch, the platform has generated more than 400 million monthly visitors, including 75 million people daily who spend at least 60 seconds on the platform.

The social media platform said that on average, the 75 million daily visitors spend more than 20 minutes with Watch.

“We’re seeing that people are regularly coming back to catch up on the videos they care about and watching for longer periods of time,” Fidji Simo, head of video, wrote in a Dec. 13 blog post.

Watch represents Facebook’s $1 billion attempt to enter the original content market, which includes Jada Pinkett Smith’s talk show “Red Table Talk,” dramas Sorry For Your Loss, starring Elizabeth Olsen and Sacred Lies from showrunner Raelle Tucker, to live LaLiga soccer matches in the Indian subcontinent.

“We also kick-started our slate of global shows with our first interactive game show, “Confetti” expanding to six new markets this year and MTV’s “The Real World,” streaming next year in the U.S., Mexico, and Thailand,” wrote Simo.

Th executive said Facebook is renewing “Huda Boss,” “Five Points,” “Sacred Lies,” and “Sorry for Your Loss,” in 2019.

“These shows all cultivated deeply engaged fan bases who came for the episodes but stayed for the conversations — and are a great example of what can happen when content and community come together seamlessly,” wrote Simo – underscoring Facebook’s strategy linking original content with social media.

U.S. Supreme Court Refuses to Hear Net Neutrality Appeals Court Ruling

The U.S. Supreme Court Nov. 5 declined to hear a case brought by the telecommunications industry and the Department of Justice seeking to reverse a lower appeals court ruling upholding Obama-era regulations that treated the Internet as a utility.

The Federal Communications Commission under President Trump reversed the regulations in 2017. Through the Obama-era guidelines were no longer in place, the Trump Administration and telecoms were hoping the Supreme Court would remove the precedent set by the 2016 U.S. Court of Appeals for the District of Columbia Circuit’s ruling that upheld them.

The Supreme Court’s lack of action on the case does not reverse the 2017 repeal of the net neutrality guidelines enacted in 2015, and leaves the door open to future litigation for any net neutrality policy.

The FCC reversal had been seen as a win for major ISPs such as Comcast, AT&T and Verizon having greater control of content distribution on the Internet. Indeed, Dish Network this month alleged AT&T-owned HBO and Cinemax wouldn’t renegotiate pay-TV carriage agreements, in part due to AT&T’s competing over-the-top video distribution platforms.

California state lawmakers this year voted to adopt the guidelines affording content providers such as Google, Apple, Facebook, Netflix, Hulu and Amazon Prime Video equal access to high-speed Internet distribution without being subjected to throttling, blocking or paid prioritization by Internet service providers.

Enforcement of the new legislation – set to take effect in January – has been put on hold pending a separate lawsuit by the federal government that argues states seeking their own net neutrality guidelines are violating the supremacy clause.

Video Remains Double-Edge Sword for Facebook

Facebook ended its most recent third-quarter (ended Sept. 30) fiscal period with 2.3 billion people worldwide using the social media platform monthly, including 1.5 billion every day. Revenue grew 33% to $13.7 billion.

Facebook Watch, the ad-supported VOD service, was launched Aug. 10, 2017, followed by Instagram TV (IGTV) this past June. Both platforms targeting YouTube continue to pose challenges to Facebook’s business model structured around user exposure to advertising. Indeed, streaming video could actually hurt revenue, Facebook founder/CEO Mark Zuckerberg said on the Oct. 30 webcast.

“Video monetizes significantly less well per minute than people interacting in [community] feeds,” Zuckerberg said. “So, this means that even though we’ve made video more community-oriented and minimized displacement of social interactions, as video grows it will still displace some other services where we’d probably make more money.”

In other words, as Facebook users consume video, they interact with “friends” less — and in turn deprive advertisers (which account for more than 90% of Facebook revenue) channels to pitch products and marketing campaigns.

“Video is a critical part of the future, it’s what our community wants, and as long as we can make it social, I think it will end up being a large part of our business as well,” said Zuckerberg.

Indeed, the executive admitted Facebook has had to “rate-limit” video growth on the platform. Characterizing video consumption as “passive” compared to users aggressively engaging in community, political and social conversations, Zuckerberg said Facebook Watch is working with advertisers to better fit their marketing and ad-buying process for video.

In Q3, Facebook introduced a way for advertisers to buy video ads from specific content categories and pay only for ads that are watched to the end.

“The biggest thing that we need to do is make sure that the video experience is people-centric, and that we’re helping content creators [and advertisers] build a community and we’re helping people interact with each other,” Zuckerberg said.  “We build social products that help people interact. There are lots of places in the world that you can go to consume content, but we’re the Internet service that people use to help connect with other people, and we’re not going to let passive consumption get in the way of that.

“We needed to figure out a way so that video can grow, but people can also keep on interacting and doing what they tell us that they uniquely want from Facebook,” he said.

Zuckerberg said Facebook Watch user growth has tripled in the past few months.

“I think that’s a very exciting opportunity ahead,” he said. “And that’s one of the reasons that I’m very optimistic about the Watch growth.”

Survey: YouTube and Instagram Gaining Ground Among Social Media Users

Most people are using YouTube and Instagram more in 2018 than in the year before, outperforming other channels such as Facebook, according to a new survey from The Manifest, a business news and how-to website.

Nearly two-thirds of social media users report they are using YouTube (63%) and Instagram (61%) more in 2018 than in 2017, compared to 52% who say they are using Facebook more this year.

Also, women tend to use social media more frequently than men, according to the survey, with 75% of women saying they use social media multiple times per day, compared to 64% of men.

Although survey respondents report using YouTube and Instagram more often this year, most still use Facebook at least once a week. Eighty-two percent (82%) of respondents say they use Facebook, compared to 75% who use YouTube and 53% who use Instagram.

Social media is part of most people’s everyday lives with 86% of those surveyed using it daily, and 72% using it multiple times per day.

People use multiple methods to access social media – mobile, computer, and tablet apps in addition to web browsers and smartwatches, but the most popular are mobile apps and computer web browsers, according to the survey. Most social media users access social media from mobile apps (67%) and computer web browsers (57%).

The Manifest’s 2018 Consumer Social Media Survey included 627 people in the United States who use social media at least once per week.

Facebook Sued for Fraud Over Video Ad Views

Facebook has been sued for fraud by a social media marketing firm on behalf of advertisers alleging the social media behemoth in 2016 knew for over year that it was overstating the average time users spent watching paid video ads.

The amended class-action suit – filed Oct. 16 by Crowd Siren in U.S. District Court in Oakland, Calif. – cites a Wall Street Journal story that reported Facebook overstated video viewing time from 60% to 80%. However, the new suit alleges viewership metrics were inflated from 150% to 900%.

“Because advertisers place higher value upon advertisements that are viewed for longer periods, they are willing to pay more for such advertisements,” read the complaint.

Facebook generated more than $17 billion in revenue from ads in 2015 – more than 95% of its overall revenue.

“Facebook engineers knew for over a year, and multiple advertisers had reported aberrant results caused by the miscalculation,” read the complaint. “Yet, Facebook did nothing to stop its dissemination of false metrics.”

The complaint claims Facebook employed a “no PR” campaign designed to “obfuscate the fact that [it] screwed up the math,” while continuing to generate revenue from inflated viewership numbers. Indeed, plaintiffs claim Facebook tried to smooth over the situation by using a new “average watch time” viewership data.

Extended video ad views are crucial. Plaintiffs cited third-party data that claimed when Facebook video ad viewership expands from three seconds to 10 seconds, ad recall increased to 57%, brand awareness increased more than 100%, and 64% increase in “purchase intent.”

 

Ampere: Facebook Video Losing Traction Among Users

Despite a monthly global users base around 2 billion, Facebook users aren’t streaming much video, according to new data from Ampere Analysis.

The London-based research firm found that video streaming among Facebook users in the United States dropped to less than a quarter (23.7%) in the third quarter of 2018, compared to 35.5% in Q3 2016.

The social media platform also saw streaming video usage declines in Italy (down 6.7%) and Denmark (6%). In the U.K., which has seen ongoing video declines on Facebook since Q3 2017, reported a 1.6% uptick.

Google-owned YouTube remains the No. 1 (68.3% usage) video platform in the world catering to an endless supply of third-party user-generated content, in addition to commercial product. No. 2 is Netflix (35.4%), followed by Facebook, Instagram (17.8%) and Amazon ranked fifth with 11.7%.

“The apparent declining engagement with Facebook video is potentially symptomatic of some of the wider challenges Facebook is facing engaging younger audiences at the moment, and the impacts of the negative press surrounding the use of Facebook data in political campaign targeting,” Richard Broughton, director at Ampere Analysis, said in a statement.

“Nonetheless, video remains a priority for Facebook’s growth strategy, and recent investments in new video ad formats, as well as partnerships in the sports sector, highlight the forward-looking efforts that the social media giant is putting in to expanding this part of its business.”

Indeed, on-demand video service Facebook Watch launched Aug. 10, 2017 featuring ad-supported original and third-party content.

The service Oct. 16 bowed a new series from Whistle Sports, whose investors include NBC Sports and Sky Sports, dubbed “Famous Los and Filayyyy Show,” and featuring the two Instagram stars offering colorful insight on sports.

Other original Watch content includes “Bad Jokes,” “Whistle Worthy,” “The Loop,” “No Days Off,” and “Courtyard: Unstoppable.”