CHALLENGES AND OPPORTUNITIES

CONVERGING MEDIA IN A DIGITAL WORD

Prof. Dr. Karen Donders Lecturer Faculty of Economic and Social Sciences Vrije Universiteit Brussel

Head of Media unit, Center for Studies on Media Innovation and Technology (SMIT)

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1.

Convergence: from buzzword and hype to

every-day reality

2.

Between doom & boom: ec., pol., cult.

& user issues

3.

Policy and industry actions: lots of talk,

little walk

OUTLINE

FROM BUZZWORD AND HYPE TO EVERY-DAY REALITY

1. CONVERGENCE

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“But now digital technologies permit the manipulation of all forms of information, voice, data and video, across all types of network. Consequently, the distinction between different types of networks is disappearing: a pipe is pipe is a pipe. In addition, digital compression means that the communication constraints of the past will fade away with the introduction of high-capacity networks of the future. Broadband networks will be able to carry full motion video as well as countless one-to-many signals. Thus, there are two essential characteristics of this technological convergence which will shape future developments. First is the change from a world of scarcity to one of seemingly limitless capacity. In such a world the concept of a rationed number of broadcast channels, for instance, becomes nonsensical. The second is perhaps a logical consequence of the first, and that is interactivity. Technological convergence makes feasible for the first time new, interactive, multimedia services such as video on demand, teleshopping, telebanking, telemedicine, interactive games and so on.” (Blackman, 1998)(added emphasis)

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“By convergence, I mean the flow of content across multiple media platforms, the cooperation between multiple media industries, and the migratory behaviour of media audiences who will go almost anywhere in search of the kinds of entertainment experiences they want.” (Jenkins, 2006)(added emphasis)

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“Convergence has become a buzzword, referring on the one hand to the integration between computers, television, and mobile devices or between print, broadcast, and online media and on the other hand, the ownership of multiple content or distribution channels in media and communications.” (Jin, 2015)(added emphasis)

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• Technical

• Economic

• Creative

• User

A COMPLEX PHENOMENON

THE LAYERS OF CONVERGENCE

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• Technical

• Economic

• Creative

• User

A SIMPLE PHENOMENON

ONE WORLD

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LEAVING EVERYONE PUZZLED

WHERE TO GO?

ECONOMIC, POLITICAL, CULTURAL AND USER ISSUES

2. BETWEEN BOOM AND DOOM

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ECONOMIC

DOOM

• Ownership integration intensifies

• Competition is eroding

• Platforms take over and determine pay-models (even if some recent victories of big rights holders over for example Snapchat)

• While advertising online brings in considerable revenues most of it is going to Facebook and Google

• Low willingness-to-pay, piracy rooted in users’ consumption patterns

Winner takes all adage is very dominant in academic, political and public debates

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European Audiovisual Observatory, 2018 BUT, in several EU markets up to 90% of growth in online advertising captured by Google, Facebook and YouTube EcoDaLo project, 2018

Titel van de presentatie

26-6-2018 | 13

Market capitalization of the largest internet companies worldwide as of May 2018 (in billion U.S. dollars) Statista, 2018

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ECONOMIC

BOOM

• Innovation as an engine of economic growth, product diversification,

• Rise of pay-models and willingness-to-pay

• Export opportunities

• The longtail favors niche content

Idea that the ‘European digital single market’ will flourish and that all, also small member states, will benefit from this

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BCG, 2016

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ECONOMIC

REAL

• Platformisation (i.e. integrating multiple functions within and across value chains beyond the simple two-sided market models of the past) will continue

• Most companies try to evolve into platforms (e.g., TV distributors moving into broadcasting and production; electronic communications operators moving into content)

Who will win when everyone is a platform?

Titel van de presentatie

26-6-2018 | 17

PLATFORMS THAT CAN EXCEL IN ALL BOXES, WILL MOST LIKELY PREVAIL AND M&A ACTIVITY WILL INTENSIFY IN THIS DIRECTION

DEPENDING OBVIOUSLY ON REGULATORY CONTEXT (REGULATION MIGHT CHANGE) AND ECONOMIC CLIMATE (GROWTH OR RECESSION)

Capital Who can take the lead in

the M&A game?

Cable Who owns

infrastructure?

Consumers Who has direct access to

consumers and their data?

Content Who has appealing

content to do something with infrastructure and access to consumers?

Control

Titel van de presentatie

26-6-2018 | 18

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POLITICAL

BOOM

• Free flow of journalism

• Possibilities of citizen journalism

• Open data journalism

• More pluralism, exchange of ideas, debate

• More political programs, also beyond national borders

• Social media make suppression of freedom of speech impossible

More so than in relatively closed, 1980s media markets

Titel van de presentatie

26-6-2018 | 20

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POLITICAL

DOOM

• Fake news as a threat to democracy

• Low quality content, disinformation, sensationalism, polarisation, echo chambers, filter bubbles, … (although nuance is in order!)

• Social media enforcing these trends instead of stopping them

• Politicians abusing fake news issue to avoid difficult questions, rise of competitive authoritarianism in several European countries

Challenging in a society in transformation, facing urbanisation, migration streams, growing divide between groups in society, political instability, etc.

• World Press Freedom Index • Detoriation year after year • Also in Europe

https://rsf.org/en/ranking

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POLITICAL

REAL

• There are opportunities and threats

• Define what problems are and what opportunities are

• P: Disinformation, sensationalism, polarisation, fast-food news consumption, …

• O: More display for information, more possibilities to engage in debates, direct interaction between more citizens and politicians, …

• R: Do we need regulation and/or corporate responsibility to constrain the challenges of the doom scenario and grasp the opportunities of the boom scenario?

The less regulation, the more (genuine) corporate responsibility, the better

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CULTURAL

DOOM

• American (and UK) dominance in audio-visual persists

• Press has difficulties in terms of re-inventing business models and constant cuts on journalism

• Tipping point / trade-off between increased diversity and consumption patterns of people

Is more choice in terms of quantity always equalling more quality?

Homogenization / commodification of products

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BCG, 2016

Titel van de presentatie

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CULTURAL

BOOM

• Achievement of ‘cultural diversity’

• More content, more niche, more diversity

• More exchange between cultures, inter-language consumption

• Emergence of blogs, user-generated-content in video, vloggers, …

Definitely more choice between devices, providers of content, multitude of content, …

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CULTURAL

REAL

• More quality and more quantity

• Main challenge = sustaining levels of quality production in a landscape where advertising is under pressure and pay is not developing rapidly enough

• Other main challenge = how can consumers ‘survive’ all this diversity?

The cultural and economic aspects of the media product need to be aligned / balanced out in this new disruptive environment; we have to evolve towards a new equilibrium

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Long Tail (Anderson, 2006) Superstars (Ranaivoson, 2017)

Exposure diversity and diversity-sensitive-design (Helberger et al.,

2016) or ‘diversity-by-design’ (Ballon et al., 2018)

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USER

DOOM

• Consumers engage mainly in fast-food consumption of content; youngsters in extreme fast-food consumption of content

• Some audiences remain unserved (e.g., migrant communities)

• Audiences’ see their wants being met, but not their needs

• Personalisation / recommendation results in bubbles and more of the same for each consumer

• Erosion of social cohesion, a sense of belonging to a community

Grimm, disintegration of society story and lack of people understanding and feeling what their place in that society is

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Digital News report, Reuters Institute for Journalism, 2018

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USER

BOOM

• Personalisation will result in higher interest, involvement with content

• Consumers have access to more content, more quality anytime, anywhere, anyhow

• Audiences will be confronted with more views, more services, more … via social media than without social media

Users are living in exciting media times and are ultimately better off than twenty years ago

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Non-linear viewing in the US – Estimates were validated in 2018 BCG, 2016

Titel van de presentatie

26-6-2018 | 35

Digital News report, Reuters Institute for Journalism, 2018

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USER

REAL

• Clear from research that people want to consumer content when they want, how they want and where they want – yet, most consumption still at home or to work

• Less clear whether consumers want to pay for content or do they lack the experience to pay?

Is all content worthwhile paying for?

Do we need to ‘train’ people to pay for some content?

Who has the consumers’ interest at heart?

European Audiovisual Observatory, 2018

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European Audiovisual Observatory, 2018

LOTS OF TALK, LITTLE WALK

3. POLICY AND INDUSTRY ACTIONS

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WALK THE TALK

• How to deal with this complex environment?

• Media literacy: Yes! Yes! Yes!, but should not become a scapegoat for not doing anything

• Balance: finding a balance between intervention and laisser-faire very important

▶ Focus on platform infrastructure and competitiveness: you need to fix the basics first (Donders and Ballon, 2017)

▶ Ensure co-responsibility: if you make money, you need to take responsibility (Helberger et al., 2017

▶ End silos of regulation: still too much focus on ‘traditional’ industry segments such as TV, radio, film, documentary, games, …

▶ Uphold European values: focus not only on economics, but also on public interest values (independence, pluralism, diversity, social cohesion, …)

▶ Adopt a holistics approach: do not only invest in the tech side, but also on the creative side; innovations in media and ICT sectors require innovation in both

POLICY ACTIONS

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RESPONSIBILITIES AND OPPORTUNITIES

• But, responsibility of policy-makers should not become a shield for industry to:

• Avoid innovation and disruption

• Plea for more subsidies and quotas and think this will solve things

• Stall collaboration on a pan-European level

• Stop critically reflecting on their own position, e.g., in the fake news topic (how many mainstream media are guilty of polarization, sensationalism??)

• More important to:

• Collaborate, create scale

• Diversify revenu streams, with a focus on training experience-to-pay

• Think towards audiences and not subsidies

INDUSTRY ACTIONS

THANK YOU