TV Choice, online monopoly

Doing the right thing

Well, it's a start, but I'm not sure it'll work.

Well, it’s a start, but I’m not sure it’ll work.

When analogue transmissions were switched off last year, the structural advantage of ‘terrestrial’ TV channels disappeared and now all viewers have loads of choice. So viewers watch more channels. The days of a duopoly have gone and no channel manages more than a fifth of viewing.  We love the ritual of joining the crowd by watching together, but we do this across more channels than ever.

TV is less monopolistic than ever.

Hurrah!

Because we like to have options.  Choice may be over-rated, but good or ill, audiences have more of it than ever.

Mmm.... fragmentation.... I had to use some colours twice

Mmm…. fragmentation…. I had to use some colours twice

 

Now consider ‘social media’.  The big three are all American (which may be familiar in terms of technology, but is very unusual, and largely unremarked for advertising or media).

Will Hutton argues that this has happened because the US has recognised the money-making power of writing code in a way that we have not. And despite all the apparent competition online, they have the ring of natural monopolies about them because the network effect confers advantages on them.  The bigger you are, the bigger you get.

So Google/Youtube dominates search and video. Facebook dominates friend networks, while Twitter dominates instant messaging to friends and strangers. And you can broaden this to Amazon. American’s aren’t only good at writing code.  They excel at investing to dominate.

Can it be broadened further to food?  No. Starbucks and MacDonald’s may feel ubiquitous but they don’t really dominate do they?  There’s a natural limit to their market share because we value diversity. And as we have embraced food cultures from around the world the big players look smaller than ever.

How superpowers are created

How superpowers are created

But online, things are different.  Many of us have tolerated Amazon putting cherished local book shops out of business because of their customer service and prices.  But their aggressive tax avoidance so enraged me that I stopped using Amazon last year and have bought nothing from them since. Their ability to undercut competitors by exploiting financial loopholes and by grinding out monopolistic dominance would be bad enough.  But the patent absurdity of their pretence at not making British profits was the final straw. It now has 79% of the E-book market.

And yet people with social consciences who pay their taxes and who would generally stand-up for the little guy feel compelled, it seems, to link to a single Luxembourg-owned (ha!) online entity when referring to books online.

That’s what a monopoly looks like.

What about social media?  They compete with each other, but there isn’t really a serious challenger to Google/ Youtube, Facebook, or Twitter in each of their areas of dominance.

Google is responsible for 89% of online searches.

Online search share.  It's like a bloody Japanese flag

Online search share. It’s like a bloody Japanese flag

Google (via Youtube, which it owns), is more than 80% of the time spent in the UK with online video (not counting porn).  It obviously dominates Maps too.

45% Porn.  It's shameful. But the money shot is on the left.

45% Porn. It’s shameful. But the money shot is on the left.

Facebook dominates social media among friends.

Twitter likewise (to a lesser extent) on social messaging.

There have been myriad complaints about dominance of the energy market by just six players. But none of them dominates their sector to the extent that we see online.  The Competition Commission examines mergers which represent a quarter of a market. Google is WAY above that.

Media owners feel obliged to help embed these monopolistic characteristics by working with the market leaders.  So TV channels allow their content onto Youtube. They create pages on Facebook. And they put Twitter hashtags on their programmes in a way that is unavailable to normal advertisers and sponsors. TV journalists with unimpeachable credentials routinely use twitter to communicate with members of the public.

How can a rival to any of these options compete with these built in advantages?

But isn’t all this a little strange?  The other day I was listening to the channel controller of BBC Radio 1 explaining why he was creating a dedicated space for its video content – performances by bands, interviews and so 0n.  I was sceptical – can’t radio just be radio?  Until the interviewer asked a simple question.

Why are you bothering with a Radio 1 video channel when you can just put the videos on Youtube?

Let’s think about this… Why would the license-fee funded BBC have its own video outlet when it can simply use Youtube; Youtube, the advertising funded, foreign owned, private entity with a monopolistic stranglehold over online video?

Can you imagine the BBC being asked why it bothers with its own video outlet when it could put all its videos onto the Daily Mail site?  Or Tesco?  Or … Virgin?

So for some, the relationship between TV programmes or channels with their audiences in the UK must to be mediated online through branded, monopolistic foreign-owned channels.  And we know they are foreign-owned because they make a point of ensuring that they are.  It’s quite peculiar.

The fact is, TV viewers are increasingly protected from exploitation (to some extent) by the fragmentation.  But why isn’t the internet like that?  If the net was supposed to usher in a democratic world of creativity and easy distribution, why is it dominated by a tiny few?  And what are the obligations of those companies who find themselves in a position of dominance?

If they are going to be accorded such largesse they have to do the decent things.  Like TV stations do. And that means, at an absolute minimum, being everso ‘umble, and paying a proper tax on the profits they make on their activities in the UK.

If they can’t do that… someone from the government will need to have a private word…