Roadkill On The Information Superhighway

Michael Hedges July 5, 2010 - Follow on Twitter

In the early digital days one of the great laugh-lines from media conference speakers put the great fear of many in the headlights. It was nervous laughter. The specter was far in the distance and its shape difficult to fathom. Nearly a generation later some still fear being roadkill on the information superhighway. Others are stepping over it.

The serious and thoughtful of the advertising, broadcasting and publishing worlds gathered in Brussels (June 30) for an evening with a select group of European Parliament members. The event, hosted by UK MEP Mary Honeyball, was themed “European Media Revolution – Ensuring Viability.”  Represented at this first-ever joint meeting were the Association of Commercial Television in Europe (ACT), the Association of European Radios (AER), the European Publishers’ Council (EPC), the European Association of Communications Agencies (EACA), the Association of Television and Radio Sales Houses (EGTA), the European Newspaper Publishers Association (ENPA), the European Association of Magazine Publishers (FAEP), and the World Federation of Advertisers (WFA). The highlight – or headlight – was an appearance by European Commission Vice-President for the Digital Agenda Neelie Kroes.

Public broadcasters were only remotely represented as the European Broadcasting Union (EBU) held its annual General Assembly in Azerbaijan. Earlier in the week (June 29) publishers represented by ENPA had a private meeting with European Commission president José Manuel Barroso in which he said, “I like to read newspapers as they are agenda setting, they have a role that no one can replace and are leading intellectually.”

There are many “revolutions” taking place in the media sector. From the perspective of the attending stakeholders, advertising as a revenue source is of paramount importance. “Advertising remains a key revenue source for the content industry, helping to ensure high quality production and the independence of media which is crucial to its role in democracy,” said the stakeholders joint statement. “The media industry works hard to maintain advertising revenues in order to sustain the costs of production of European content which consumers value enough to spend time with or pay for directly.”  Two weeks earlier at the Cannes International Advertising Festival the ad people gave a ringing endorsement – and promises of more spending – to new media, smartphones and the Web.

This, then, is where the advertising revolution meets the Digital Agenda for Europe, President Barroso’s ambitions plan to bring high-speed broadband into every household, put a thumb on mobile telecom pricing and harmonize copyright legislation all in the interest of raising more business from new media and ICT businesses. Last week (July 1) Finland’s Ministry of Transport and Communication deemed broadband (1Mb) access a “basic right” like electricity and water connections to households.

Commissioner Kroes described her job as addressing “the urgent need for Europe to lift its productivity growth and the possibilities that digital technologies provide for addressing many of our social challenges.” The “wider context,” where all policy makers live and breath, “is that only a comprehensive strategy for maximizing the potential of ICTs will have a real impact. ICTs are shaping our quality of life, how we do business, how we consume, and how we fill our days. They are also changing the power balance between countries, communication platforms and generations.”

“None can afford to be passive in the face of the challenges of digital transformation,” said the Commissioner who is often referred to as Steely Neelie,  “whether policy-maker, or publisher or producer of content.”

In early parts of her remarks, Commissioner Kroes answered several questions not asked at the forum organized around the advertising theme. “I will always defend media pluralism. It has a vital role in our democracy; it is an anchor of European values. This does not mean that I think state subsidy or regulatory intervention are the only or the best ways to defend pluralism, although they may have a role to play. But it does mean that I believe in the continuing evolution of the dual system of public service and commercial broadcasters and that I consider pluralism as a non-negotiable principle.”

Private sector broadcasters and publishers have appealed to the European Commission for relief from competition from tax supported public broadcasting. In her previous job as EC Competition Commissioner, Mrs. Kroes oversaw a broad policy of limiting State aid, which resulted in changes in national legislation regarding public broadcasters delivery of services through new media.  “I do not have favorite technologies or companies,” she explained. “For me the idea of public versus private is a false choice. We need both. Quality content and a level playing field are also crucial. When we have all these things that is when consumers have the chance to exercise real choices.”  Commissioner Kroes is clearly not intimidated by big companies; broadcasting, publishing or otherwise. Just ask Microsoft and Intel.

As consumers find joy with new media, traditional medias’ business models have been turned on their heads. Commissioner Kroes offered a little advice: “While people are used to paying for content, and are sometimes simply not willing to pay, there are enough examples to show that given the right, distinctive, quality content they may pay.”

“I can't solve that content challenge for you.”

 “Simply waiting and seeing will not do.”

“The days of double digit returns from a traditional business model are over, and print journalism needs to find new ways to balance the books.”

Commissioner Kroes also offered advice to those – primarily broadcasters – seeking relief from regulations. If free-to-air broadcasting is too confining, try pay-TV. “If you want to minimize your national regulatory burden, I would say that you need to look at your choice of platforms.”

“Linear services (video programming) are more regulated because of their impact on society and the limited degree of choice and control of users. On-demand services, on the other hand, are subject to a much lighter regulation. It is not for me to design your business model, and there are certainly valid reasons to choose one or the other but regulation lies only where it is required.”

Back to advertising: “I would say that the regulatory burden has clearly been reduced by the AMVS (Audiovisual Media Services) Directive.” When the Television Without Frontiers (TVWF) Directive was updated and renamed broadcasters were relieved of some, but not all, controls on advertising. Split-screen advertising is now allowed. And, too, the product placement revenue stream moved from strictly forbidden to allowed with exceptions. The deadline for Member States to align national laws with AVMS expired at the end 2009. Alas, the EC sent letters (June 24) to twelve laggards (Austria, Cyprus, Estonia, Greece, Finland, Hungary, Lithuania, Luxemburg, Latvia, Poland, Portugal, and Slovenia) demanding they get their acts – literally and figuratively - together within two months of it’s off to the European Court of Justice (ECJ) for infringement hearings.

The EC’s Digital Agenda for Europe is being more clearly articulated over time. Commissioner Kroes is highly focused on the economic potential of ICTs, new media being a significant part. And, too, the EC is taking a less activist role under the Lisbon Treaty rules. Revising the Television Without Frontiers Directive took five years. A copyright directive, disparately in need of a digital upgrade, might take a decade.

“Europe must never become a media museum,” said Commissioner Kroes at both the beginning and end of her remarks. Without a mighty roar for transition, however, traditional media will be another example of roadkill on the information superhighway. Don’t count Commissioner Kroes for resuscitation.

See also in ftm Knowledge

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