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Words by the zillion have already been written about the recently concluded UK general election. Considering the news cycle and the weekend, the world will have moved on by next Monday. For those living in a cave these last hours or with other things on their minds David Cameron will continue as UK Prime Minister with the Conservative Party in parliamentary majority, the Scottish National Party claimed Scotland and other political parties were beaten into submission.
For media watchers the UK election cycle provides considerable reflection. Certainly the big newspapers placed their endorsements - and coverage - along predictable lines. Public discontent about dodgy courtship of certain proprietors still simmering, politicians seemed to avoid touchy-feely contact with the newspapers. The tabloids did what they have always done, from scary headlines to crazy claims. The only tilting provided by the Sun, Daily Mail and Daily Mirror seem to be at windmills.
But television; that’s another story. With the BBC painfully correct in its objectivity and other channels more worried about wrath falling on licensing, ad rules, anti-trust and anything else that could place the bottom line at risk very little was on the air to stir the voters. Even the political ads - forbidden on the BBC - were plain, white bread. The debate about televised debates was equally cautious, though giving equal podium time to minority political parties likely sowed sufficient confusion to push voters to, arguably, a safe-haven. (See more about elections and media here)
Voters always follow self-interest, perceived or real. One large set of the UK public truly found something upsetting: Top Gear host Jeremy Clarkson was fired just prior to the onset of official politicking. The BBC motor-head show reached 5 million folks each week. Mr.Clarkson, notorious for espousing views of the politically incorrect variety, punched-out a producer for failing to provide due respect at meal-time. Those voter/viewers, many sharing Mr.Clarkson’s point of view, know very well that Mr.Cameron’s Conservatives are more likely to punish the BBC.
As the general election campaign began in earnest, the social media effect was continually tested. Political operatives did their part on Twitter and Facebook. Talking points appeared and disappeared. Comedian Russell Brand, arguably representing the totally hip and totally social, interviewed Labour Party leader Ed Miliband on a video blog - highlighted on Twitter - and, afterward, gave his endorsement. Mr.Miliband resigned after voter’s preference became clear.
Social media titan Facebook generally escapes the wrath of ever-watchful publishers. Privacy and data protection issues might be worrying but Facebook is the land of the frivolous, not particularly threatening to content producers. That is changing.
With about one and a half billion users worldwide, Facebook still faces challenges. The biggest is mobile advertising. Enticing mobile users to view more pages - and see more ads - means offering third-party content. The Instant Articles feature, reported by the Wall Street Journal (May 2), will allow certain publishers all ad revenue they sell and 70% sold by Facebook’s automated ad robots attached to articles hosted on Facebook. Look Ma, no links. (See more about social media here)
The first to sign-up, the WSJ reported, are the New York Times, National Geographic and BuzzFeed. The publishers get most of the ad revenues but lose user data and associated links. Facebook keeps more people on its platform. Digital teams at publishing houses will also have new Facebook tools to play with. The native mobile ad format will allow a variety of modifications to help prevent, they hope, folks from escaping Facebookistan.
Publishing giants have long complained with righteous indignation over the market wielding power of online giants. Notwithstanding his company’s renowned digital accomplishments, Axel Springer CEO Mathias Döpfner a year ago said Google’s business model “in less honorable circles is called extortion.” Anger from a powerful publisher echoing in Brussels, the European Commission could not avoid reviving a high-profile anti-trust action against Google.
Part of the European Commission’s Digital Single Market Strategy unveiled this week is an anti-trust investigation into e-commerce activities of Google, Amazon and Facebook.
Stimulating economic growth continues to be a European Commission priority. Applying the EU Single Market can unlock endless digital possibilities, the executive’s leaders have repeated with sincerity through this century. European Commission (EC) vice president Andrus Ansip and Digital Digital Economy Commissioner Günther Oettinger have a plan, which they announced this week.
“The internal market is not functioning as it should,” said VP Ansip to the requisite press conference in Brussels and this new Digital Single Market (DSM) strategy can “contribute €415 billion annually to our economic performance and create hundreds of thousands of new jobs.” Unraveling disparate and divergent national rules will be a challenge, as it has been. The EC under president Jean-Claude Juncker wants nothing more or less than levelling a playing-field dominated by “Anglo-Saxon” media and technology.
"The aim is to improve people's access to cultural content online,” said the draft document, “while opening new opportunities for creators and the content industry. In particular, the Commission wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe. The Commission will also look at the role of online intermediaries in relation to copyright-protected work. It will step up enforcement against commercial-scale infringements of intellectual property rights."
Details for the DSM strategy will be revealed in coming weeks, typical of EC policy announcements. Copyright rules are one clear target, geo-blocking an irritant, e-commerce an opportunity. On receipt of the final proposals parliaments of the 28 Member States will debate - and alter - them all before returning their preferences to Brussels sometime in the next year.
Pleased with the attention but wary of the process are those in the media sector. “The creation of a level playing-field could bring the entire audiovisual industry forward,” said German private broadcaster association VPRT in a statement, calling for an overhaul of Audiovisual Media Services Directive (AVMS) rules on advertising. Care must be taken that “proven business models are not unduly compromised.” (See VPRT statement here - in German)
“It appears this would create a single market for Europe at the expense of the global digital economy,” said US think-tank Information Technology and Innovation Foundation president Robert Atkinson, quoted by Hollywood Reporter (May 6). “The digital single market should be a pathway towards integrating Europe into the global Internet economy, not a strategy for isolating Europe from the rest of the world. In particular, the EU should avoid developing European-only, government-led technology standards.”
The path to digital transition has led, in recent years, through the courts. Yet in many jurisdictions relevant law had been drafted in the analogue age creating confusion for litigants, not to forget fortunes for lawyers. German publishers sought relief in the courts several years ago against a more digitally nimble public broadcaster with no clear end in sight.
A recent Federal Supreme Court decision in litigation over German public TV network ARD’s mobile news app found the “concept” in compliance with the State Broadcasting Treaty section prohibiting activities outside a strict definition of radio and television but in “specific instances” maybe not so much. For that the lawsuit was referred back to a lower court. Both sides declared victory and called their lawyers.
Litigants could not sue ARD, said the Court, because it is an association of State public broadcasters and, therefore, has no legal standing, reported Frankfurter Allgemeine Zeitung (FAZ) (May 2). Hamburg-based public broadcaster Norddeutscher Rundfunk (NDR), which produces the tagesschau.de news app, has standing but seems to be in compliance. The Court suggested ARD distributed online news platform is somehow different from the mobile phone app. FAZ is party to the litigation. (See more about media in Germany here)
German publishers changed legal tactic last year after lower courts sided with public broadcasters claim of public service. Pursuing relief under competition law publishers claim the mobile app unfairly enters their turf. That seems to have back-fired as the Court observed that “a ban (on the mobile app) has the purpose of limiting public broadcasters in telemedia services market for the protection of press publishers.”
Life for online media businesses can be aptly described by the famous Thomas Hobbes quote; “nasty, brutish and short.” German streaming music service Simfy disappeared into bankruptcy this week, reported faz.net (May 4). Cologne-based Simfy appeared in 2006, concentrated on German-speaking markets and obtained, reportedly, €30 million in VC funding.
Licensing issues for Simfy became apparent early this year and in April an agreement with major music publishers seemed to be at hand. Either it was not enough or not to be. A few days before the bankruptcy notice was officially published a notice on the Simfy website encouraged music fans to sign up with French music streaming portal Deezer, their new “strategic partner.”
US-based streaming music portal Grooveshark shut-down last week. It, too, had licensing issues that turned into huge lawsuits over copyright infringement largely, US$15 billion worth, from Universal Music. In lieu of a US$700 million fine, the court ordered the site closed, copyrighted material erased and all intellectual property turned over to competitors.
“Despite best of intentions, we made very serious mistakes,” said the founder, posted to the website. “We failed to secure licenses from rights holders for the vast amount of music on the service. That was wrong. We apologize. Without reservation.” Grooveshark launched in 2007.
The Danish government has taken a second look at shuttering the FM radio platform. Rather than imposing a switch-over by the end of 2019 a decision will only be taken once digital listening - DAB and online - reaches 50% of all radio listening. The decision will likely not be trumpeted by DAB supporters like the partial FM switch-off in Norway announced two weeks ago.
“The FM band, which has been used for radio in Denmark since 1950, has unfortunately only room for a limited number of channels,” said Culture Minister Marianne Jelved in a statement, reported by Danish technology business portal avm.dk (May 2). “DAB and Internet radio offers far more options. A switch-off of FM is inevitable, but we need listeners. The question is when this will happen.” (See more on digital radio here)
Denmark was a very early adopter of the DAB digital radio platform, largely through public broadcaster DR. Several digital-only radio channels appeared, some disappearing due to budgetary constraints. The Culture Ministry noted that current digital radio listening is 26% of total listening. (See more on media in Denmark here)
Within the decision, broadcasters already using the DAB platform - most all in Denmark - will be required to upgrade to the DAB+ platform by the end of 2016. Minister Jelved’s office will continue to monitor progress but the question of FM switch-off will not return until after 2018, when the current media agreement expires.
It is the season for media transactions. Discovery Communications has offloaded, as expected, the Scandinavian radio assets operating as SBS Discovery Media to Hamburg, Germany based Bauer Media Group. Financial details were not disclosed and a closing was not set as competition authorities will need to pass judgement.
The transaction involves 19 stations, some national and some local, including Radio Norge, Radio 1 and Radio Rock in Norway, Mix Megapol, the NRJ franchise and Rock Klassiker in Sweden, Pop FM, Radio 100 and Radio Nova in Denmark as well as The Voice and Iskelma in Finland. It is the biggest European radio deal in several years and puts Bauer Media at the top of pan-European radio broadcasters.
Discovery Communications acquired the Scandinavian broadcast assets of ProSiebenSat1.Media two years ago for €1.3 billion, the biggest European media deal in many years, and formed SBS Discovery Media. Discovery Communications is a television company through and through. Bauer Media is a leading radio broadcaster in the UK and Poland, also owning Radio Expres in Slovakia and a 25% stake in German station Radio Hamburg, a joint venture with RTL Group.
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