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Bob Wootton 

Perception vs reality

Perception vs reality

Bob Wootton offers his view on the biggest industry stories of the past month, including Australia's showdown with Google and Facebook, the troubles of the BBC, and media's existential threat

It’s “interesting times” as the pandemic stress-tests… well, pretty much everything.

Australia has become the first laboratory in which a democratic Government challenges a global tech giant over the future livelihood of the Fourth Estate.

Facebook threw a paddy and withdrew news from its platform across the Pacific.

Much wailing and gnashing of teeth but if the internet has taught us anything, it is that people will find their way to what they want. Just as millions of WhatsApp users alienated by its new terms and conditions migrated to other secure instant messaging apps, so people will simply go elsewhere for news.

Facebook is hardly untarnished and only a small nudge could rewire users’ habits.

It’s all wrapped up in the “publisher or not?” argument, but that dam was comprehensively breached when Twitter et al (rightly) censured Trump last autumn. De facto, platforms are publishers and will be regulated thus. Live with it.

It might curb their prodigious profitability but advertisers, their agents and everyday users alike will be better off for it. About time too.

Naturally, Facebook wheeled out the public and corporate affairs bigwigs from Zuck down, like the discredited Sandberg and the craven Clegg. And as of this morning, the digital giant struck a deal with Australia to restore news on the platform, in return for amendments to the draft law that would force Big Tech to pay for news.

Although according to the FT, Facebook has retained the right to reimpose a ban on sharing news on its platform in Australia if it is unable to reach "acceptable" deals with news media companies.

On the overall theme, I’m with Australia, as of course are Governments and news gatherers around the world.

Google, themselves subject to legion regulatory investigations, are playing the longer game and it’s probably some comfort for our own global news organisations like the BBC. Meanwhile, Apple might bother some but it’s Amazon’s rise and rise that’s making most folks crap their pants.

Speaking of the BBC - with a new year comes a new Chairman. The outgoing incumbent followed tradition, his parting shot warning Government of a bleak outlook.

As ever, it’s about money and the new platform and SVoD competitors, latterly boosted by lockdown (lucky old Disney) - i.e. it's someone else’s fault.

Much of what the BBC stands for and many of the things it does are terrific and count strongly for it in any such societal discussions, but it has some way to go in the self-awareness stakes. Its silos, empires and clusters of self-preservation and privilege still radiate upper middle-class liberalism.

Most of the populace forced to fund it via a tax would likely have mixed sympathies at best if they could be bothered - or were encouraged - to look closely enough.

Perception vs reality? Maybe, but as in elections, it counts.

Like many very large organisations, it may simply be too entrenched to change and this will likely be its regrettable if protracted downfall. Tricky one for capable new Director General Tim Davie.

Media's existential threat

As if the worst economic downturn in the history of the known universe hasn’t been bad enough, the UK Government has mystifyingly decided to beat up on one of our most successful industries and exports.

A rushed “consultation” on further food ad bans is joined by “proposals” to restrict gambling marcomms. (Inverted commas to remind that these things are invariably decided prior to and merely adjusted later).

The two categories, one of the oldest and one newer, are amongst the biggest spenders on advertising and therefore very significant funders of the media.

Nor is our “sponsoring ministry” banging our drum. I’ve written before about the relative pointlessness of cosying up to DCMS. It’s ineffectual at Cabinet because of the budget it doesn’t wield and its position there is either a staging post for those on the way up, a cheap reward for cronies or a parking slot for those on the way out.

Current Secretary of State Oliver Dowden clearly sees himself in the former cadré. But despite several opportunities, like communicating optimally during the pandemic, his mark is only on one big issue - preventing back-door access to our national security and other systems by excluding Chinese comms infrastructure provider Huawei.

The combination of these two sector bans is no less than an existential threat for our media, especially telly, as well as sports teams everywhere.

I’m no fan of gambling, let alone its complete infestation of late evening viewing.

On HFSS foods, at the policy level I’m in the 'no such thing as bad food, only bad diet' camp.

However, there’s some dissent even in our own ranks, like my fellow Mediatel commentator Jan Gooding. At the tactical level I fear she may have a point.

Claims that bans have marginal calorific impact seem too good a gift for industry’s lobbyists and by accusing Government of “tone deafness” we could be accused of a similar insouciance towards public health.

Perception vs reality again?

But even if there are indeed any votes in these initiatives, now is not the time for Government to hobble some of UK plc’s best players.

Better, surely, to negotiate and impose carefully-phased withdrawals whose adverse economic impacts are felt only once recovery is clearly under way?

Meanwhile, as the pandemic has accelerated change in so many sectors, hardly anything seems secure.

With low interest rates and bond yields, investment funds are awash with money. And as the value of businesses drops, these predators are circling.

The world has lurched towards quarterly reporting and short-termism but many businesses - and all brands – ignore the medium- to long-term at their peril.

There are few better examples than ITV fending off private equity interest.

The PE model buys low (so now is a good time), restructures, extracts large dividends, loads with debt, does some exotic massaging of the books, then sells and moves on, trousering further profits.

The compatibility of this destructive model with that of “the nation’s favourite broadcaster” is far from clear and in my personal view, threatening. Hell, I’ve never even been sure that public ownership of creative businesses is that good a thing. Witness radio.

And finally, to close, an admittedly tangential word of sincere praise.

All Governments around the world have been blindsided by Covid in many different ways. Very few have distinguished themselves. But when it comes to mass immunisation, from development to procurement, distribution and vaccination, the UK’s success stands out.

Seriously impressive stuff.

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NickDrew, CEO, Fuse Insights on 23 Feb 2021
“>"On the overall theme, I’m with Australia, as of course are Governments and news gatherers around the world."
Well quite, given your background!
The problems with the proposed legislation are manifold, but several of them are intractable, regardless of what one thinks about the current state of news media, Facebook's tax arrangements and the Australian government's fear of/ reliance upon the Murdoch media empire.
In terms of practicalities, there *are* significant differences between how Google and Facebook use news publisher content. Google has long used snippets of news content with the net result that traffic to the specific publishers' sites is reduced - you get the news you need on the Google domain and don't visit the publisher's own site. Its agreements reflect this reality, although it's notable that it's doubled down on that mechanism by segmenting it off into its News Showcase product, in a fairly straightforward 'pay for content' move.
Facebook doesn't actually use the content - it fundamentally isn't a news publisher in this way. When you click on a news story posted to Facebook, you are taken to the news publisher's website to read or watch the content, with the news publisher's ads shown to you. So the legislation's outcome is that Facebook pays to *link* to content - thus breaking a fundamental building block of the internet, of free linking to any site. While publishers may pay to *receive* users (through affiliates etc), they don't pay to send users somewhere. Again, we may detest Facebook, may be envious of its financial success etc etc, but one can't break such a basic principle of the internet in the pursuit of one publisher we don't like.

And bringing it away from the politics to the actual purpose of the initiative, this has all come about because "Facebook is rich; independent news publishers are struggling". One can debate the merits of conflating the two issues, but it takes a particularly weird lens to see this specific sledgehammer of legislation as a solution that resolves the challenges independent publishers face. The major beneficiaries of this deal are the largest of news publishers (Murdoch's outlets primarily), which are actually doing pretty well financially. The smaller the news outlet, the less they benefit from this move, and those that bridge the divide between 'community updates' and 'community news' are unlikely to receive any real income as a result of this.

Does Facebook need to be regulated? Yes. Does it need to pay more tax in pretty much every country in which it operates? Hell yes. Are news media's challenges to adapt to the changing media consumption habits of the public a direct result of Facebook's success - and will taxing Facebook more address those underlying challenges news publishers face? er...
Most importantly, is trying to break a foundational principle of the internet in pursuit of one publisher whom governments and news media dislike but can't *specifically* blame for their own problems really justified; or does it merely show how little governments and indeed the news media understand of how the internet works?”