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Digital media firms have long argued against privacy regulation asserting that regulators don’t understand the ways they work, that digital firms have strong incentives to protect the privacy of users, and that the firms do so through self-regulation. Unfortunately, for years we have witnessed major digital players continually apologizing for their lapses in protecting the privacy of their customers, often violating their own policies and promises, and for not ensuring that others with whom they do business protect the privacy of the data they access and use. There has been a constant failure to put their customers’ privacy interests first and digital companies have dismissed criticism and call for regulation as misguided or perilous. The regulations that have appeared, such as the European Union's General Data Protection Regulation (GDPR), have improved transparency and the abilities to control how some of their personal information is used, but is doing little to control the ma...

The objectives of digital tracking are to identify users so marketers and content providers can know who users are, what their interests are, and how they relate to goods/services and content being promoted or provided. Although it is becoming easier to determine what individuals use digital devices, the ability to establish their identities still remains challenging because people have multiple, not just single, identities. Identity has traditionally been defined by the individual’s relationship to institutions (families, tribes, nations, nation-states, and religions). Even within this conceptualization, individuals had multiple identities: mother, member, citizen, believer. Modernity and the development of global communications and social networks, however, have expanded our conceptualization of identity and give us even more identities, some of which loosen identity bonds previously held and some of which compete with each other. The notion of identity is related to the concepts of ...

The cutbacks at The Guardian and the demise Al Jazeera America announced this month provide painful lessons that the news business is not just about providing news, but creating workable business models and gaining audiences who think their content is valuable. The Guardian announced 20% budget  cuts (£50 million; $72 million) and stretched the credibility of corporate public relations by presenting them growth strategy. The news organization has been losing money for years in a digital strategy that can only be described as hoping to buy market share through aggressive international expansion, free content provision, and the belief that digital advertising would replace declining print advertising. The Guardian ’s strategy was closely aligned to the discredited digital startup approach of considering the “burn rate” of its capital as a surrogate for prudent investment. In announcing the changes, David Pemsel, The Guardian ’s new chief executive, used trite popular business ...

It is increasingly being argued that the Internet provides “digital surplus” to consumers and that this surplus is a means of understanding the value of the Internet to users and society. Measuring the surplus presents a host of challenges, however. First, the Internet does not produce content. Private enterprises, public entities, and individuals create content with different motives and compensation demands. These are offered under varying business strategies that determine how and how often the content is available on the internet. Secondly, Internet gateways—ISPs, search engines, and aggregators—have a significant influence on consumers’ content choices. Consumers use relatively few gateway services, but they access content from multiple providers. The nature and sources of that content are highly influenced by the gateways, their preferred content providers, and the algorithms they employ in filtering content. Determining whether consumers obtain value for money in terms of pr...

Cable and satellite companies are increasingly finding it difficult to get the growth in customers and revenue they would like. Over the past 4 decades they achieved growth first by introducing services in new markets and by acquiring smaller providers and then, as unserved markets and acquisition opportunities declined, by offering an increasing number of channels, telephone and internet services.   The strategy increased customers and revenue, but inevitably let to a mature market in which only lower growth was possible. In the past decade cable and satellite overcome that maturity and achieved growth by offering a variety of new services and products to consumers--allowing them to access programming at times it is not offered on their channels or systems or in different forms--and syndicating their original programs and finding new income through merchandising and related activities. The development of connected TV and use of video on laptops, tablets, and smartphones has spurre...

Single-copy magazine distribution is undergoing a remarkably unheralded transformation and it has enormous implications for both publishers and consumers.   Each year about 3 billion copies of magazines are distributed to 150,000 retail outlets within a large and complex distribution channel. This is extremely important to publishers because it produces about one quarter of circulation revenue and is used to promote subscription and introduce new titles.   In simple terms, the system operates by publishers selling copies to wholesalers and wholesalers reselling the copies to retailers. However, retailers return unsold copies to wholesalers for a full refund and wholesalers return them to publishers for a similar refund.   Because of the large number of titles, copies, and retailers involved, and the geographic scale of the country, publishers and retailers have sought to minimize their effort, create economies of scale, and reduce transaction costs.   Publishers cont...

The increasing consumption of news on digital platforms is forcing news organizations to rethink their news production cycles and staffing patterns. Most journalists, like other employees, prefer a normal pattern of life—going to work in the morning and leaving work in the afternoon—because it is conducive to social and familial life and enjoying the cultural amenities that communities have to offer. This preference helped keep afternoon newspapers the standard in the U.S. until 2000, when morning newspapers surpassed afternoon papers for the first time.   Even before that time, however, news production cycles and staffing patterns brought the majority of journalists to the office in the daytime hours, with the number of staff in newsrooms dwindling until morning papers “went to bed” about midnight. Most newsrooms then turned off the lights, and only a few larger metro papers sometimes kept a skeletal crew of police/fire reporters and photographers in the newsroom overnig...

Legacy and born-digital content creators are now approaching tipping points where they will be forced into deep strategic thinking and choices that will affect their future operations. Consideration of the platforms on which they operate, the platform(s) that receives preference, and the income and expenses they will bear will all inform the strategic choices. The growth of digital consumption is forcing content creators to confront issues of offline and online consumption, but also to respond to the rapid growth of consumption on different types of digital devices—especially mobile devices. These changes are moving many firms closer to the tipping points. In deciding how and when strategy needs to be reconsidered, managers need to watch for four critical strategic tipping points. These are points at which significant contemplation and decisions must be made or the enterprises will be put at risk by indecision: 1. When c ontent income surpasses advertising income 2. When d igital incom...

There has now been enough experience and research to draw conclusions about how news is transitioning to the digital world and what it means for news companies. If one objectively views the developments, one sees that the current developments are is neither as bleak as some journalists portray them nor as rosy as some digerati frame them. Instead, we have reached a point where digital news is becoming workable in commercial terms, but is not yet mature enough to erase the industry's business challenges. News consumption in the digital environment is significant and audience reach is now 5 to 10 times larger across digital platforms than for print editions of most newspapers.   Many large news organizations are now generating 15-25 percent of their revenue from online, tablet, and smartphone platforms and benefits are starting to appear for some mid-sized players as well. If we look at what has occurred in the past decade, there are some important lessons to embrace about news ...

The proposed merger between Bell Canada Enterprises and Astral Media will shortly be considered by the Canadian Radio and Television Council (CTRC). The merged company will own 70 television and cable channels, more than 100 radio stations, and some of the country’s most popular websites. The combined company will serve nearly one-third of the national TV audience, more than 40 percent of the national cable TV audience, and about 30 percent of the nationwide radio audience. In addition the merger will increase Bell’s vertical integration and its power over distribution systems used by competitors. This later factor is particularly important because Canada lacks much of the regulatory control seen in Europe and the US over business practices of distribution systems that are also used by competing firms. The merger will benefit the two companies by giving them more market power and permitting efficiencies at the corporate and divisional levels. It is also likely to produce efficienc...

The News Corp’s launch of the tablet newspaper The Daily in February 2011 was heralded as the future of news and revealing opportunities for major new entrants in the news market. After a year and a half of operation, the digital newspaper has lost more than $30 million, managed to gain only 100,000 subscribers—not a trivial amount but low for a global player, and has just announced that it is cutting 1/3 of its editorial staff and ending original production of sports news and commentary. Journalistically The Daily is not a bad news product and its app is facile and effective. So why hasn’t it been more successful? The fundamental problem is that the digital-only paper has been overshadowed by the success of legacy print newspaper brands in the market for digitally delivered news. The Daily has never been so brilliantly written and edited that it could gain the significant attention and acclaim needed to overcome the brand advantages of legacy news providers. Major newspaper—s...

Serving and satisfying customers is a crucial part of  value creation in any business,but U.S. communication firms continue to struggle with the very basics and are being heavily criticized for poor service, price gouging, billing problems, and generally poor customer relations. 40 percent of the top 15 companies that most dissatisfy customers are communications firms, according to the latest data from the American Consumer Satisfaction Index. The companies American most dislike include Facebook and cable systems, which operate as near monopolies and consumerss have no real competitors to turn to for better service. The scores for the companies are: Direct TV: 68/100 Facebook: 66/100 Comcast: 61/100 Time Warner: 63/100 Cox Communications: 63/100 Charter Communications: 59/100 These are failing scores on any grading system. The companies have little incentive to spend time and money to improve service and relations with customers b ecause there is no real competition that can discip...

Applications that aggregate articles based on what others in one’s social network are reading and reformat them into an attractive magazine and presentation formats are growing in popularity, but they are raising concern among some publishers. The processes build upon the referral and curating functions of colleagues and friends in social networks and reduce the need for users to go to multiple sites for content on their own. Some of the best known social magazines are Flipboard, Newsmix, Currents, and Pulse. Some publishers are starting their own social reading apps, such as New York Times that has a Facebook app pulling together stories that friends have read in NYT. Many publishers are fearful of these developments, however, because they represent another step away from publishers controlling when, where, and how readers use their content, reduce the impact of the publishers’ brand strategies, and diminish control over the presentation and marketing of their content. But publish...

I was recently reviewing the effectiveness of media ownership policies and regulations and was struck by the limited success they have achieved during the past 50 years in Western nations. There seem to be two central problems with ownership regulation efforts: ownership really is not the issue that we are trying to address through policy and we have convoluted views of ownership. Media ownership is not really what concerns us, but is a proxy of other concerns. What we are really worried about is interference with democratic processes, manipulation of the flow of news and information, powerful interests controlling public conversation, exclusion of voices from public debate, and the use of market power to mistreat consumers. It is thus the behavior of some of those who own media rather than the ownership form or extent of ownership that really concerns us. This is compounded because media practitioners, scholars, and social critics have highly convoluted views about ownershi...