Are we ready for the era of media monopoly?
By Jesse Hirsh
The word monopoly has historically been associated with the communications industry, perhaps less so the media industry. However, that’s changing as the concept of “convergence” has driven old school telecom and cable monopolies to buy up media, whether old or new, while also providing the connectivity to the digital networks we collectively agree are our future.
Monopoly speaks to the power of communications, as well as the need for regulation, to ensure the protection and pursuit of the public interest.
However not only have the traditional monopolies largely escaped regulatory control and accountability, the new and emerging social media monopolies are already so large and nimble as to appear beyond the realm of regulation (or even competition).
How do the new monopolies work?
Microsoft is the modern template, a once mighty monopoly that still has considerable market position and revenues. Like IBM, the monopoly before them, Microsoft’s main challenge has been adapting to new platforms and a new era of computing (and thus new monopolies).
Their one-time challenger, Apple, is one of the world’s most valuable companies, with a monopoly not so much in devices, but rather in distribution. The iTunes store is not only the world’s largest music store but features exclusive content and apps that are available only on iOS.
Think of Apple as a soft kind of monopoly. With no desire to posses the entire market, the company exerts incredible control over the premium and targeted markets of their choosing.
Google on the other hand is one of those monopolies we’ve already taken for granted, using their name as the verb to search, with their near monopoly in online and mobile advertising, fueling their dominance in online video (YouTube) and mobile operating systems (Android). If it weren’t for Facebook, Google might also have a near monopoly in user authentication and messaging, although said oligopoly provides no alternative.
In many respects, Facebook has secured a monopoly in the ever crucial business of identity infrastructure. While not everyone has a Facebook account, there are in many cases no other means of proving who you are without using your FB login.
The data that Facebook collects and organizes for each user provides a privileged starting point for any web or mobile app that would rather outsource user authentication and customization to FB. Add to this the company’s aggressive acquisition of strategic mobile startups and Facebook’s potential to control the Internet’s identity infrastructure is substantial.
Acquisition and consolidation remains the primary business model of the tech sector. Forget about revenues, or sustainability, just focus on users and growth. The exit strategy will be a buyout from Google, Facebook, Microsoft, or one of the other monopolies eager to strengthen their position.
The impacts of this new trend are significant
One of the biggest impact from this model of innovation is on the lives and livelihood of employees.
On the one hand, startups often demand prolonged work under stressful conditions as the focus on growth usually comes on the backs of early employees (who make the sacrifice in hopes of getting rich if and when the company is successful). On the other hand, the large technology monopolies are being investigated for systemic and long-standing wage fixing by the US Department of Justice.
Few (quality) jobs are being created in the North American media industry, and while there are a myriad of reasons, the competitive pressure from the rising social media monopolies certainly plays a role.
Twitter offers an interesting example of the strange bedfellows, or even frenemies, that traditional and social media have become. If you work for a media company, and news breaks, where would you publish first? To your own platform, or to Twitter?
What if Twitter is an emerging distribution monopoly? What if the only way to publish and get attention in real-time is via Twitter? Do we tune into the radio because of Twitter? And if we tune into Twitter because of the radio, why is the media industry as a whole working so hard to publish to and promote Twitter?
Maybe monopoly is a dirty word that is discouraged from public discourse let alone polite conversation.
However, let’s look back at those traditional monopolies, the phone companies, the cable companies, which now own most of the media companies and provide us with our Internet and mobile connectivity. While they may be subject to some regulation, in some of their businesses, they operate for the most part beyond regulatory oversight, with their power and influence growing.
When we look beyond them, beyond our borders, and beyond the present context, we see their primary challenge coming from the new social media monopolies.
In particular, both Google and Facebook have announced plans to start providing Internet access. Google has done this in a few US cities via their Fiber project, however the real potential for “disruption” is access from the sky. Google has plans for flying blimps, and Facebook for flying drones.
While the coverage of these developments has focused on connectivity in the developing world, the real prize is to provide connectivity in North America, where they can compete directly with the phone and cable companies which derive incredible profits from our need to be connected and distracted.
The era of the media monopoly has only just begun.
Jesse Hirsh is an internet strategist, researcher, and broadcaster based in Toronto, Canada. He has a weekly nationally syndicated column on CBC radio explaining and analyzing the latest trends and developments in technology using language and examples that are meaningful and relevant to everyday life.