2020 is the year to step up

(This originally appeared as the opening to today’s newsletter. Subscribe here.)

We can do more

With massive protests across the US over police brutality and systemic racism against black Americans, it’s worth us remembering how central a role media companies have always played in promoting racial prejudice. Not just news media but films, TV shows, video games, etc.

Bias still gets baked into content today, often unintentionally. It’s healthy to take account of not just where our companies may devalue or silence certain voices but how we can proactively bake anti-racist and civil rights values into the scripts we produce, games we develop, and content curation algorithms we code.

I’m compiling some resources to share. Please send any suggestions.

As a community, Monetizing Media subscribers are disproportionately wealthy, white, and in leadership roles at companies that shape pop culture and public discourse. So let’s recognize we are among the most empowered individuals in the entire world to make an impact through even small actions.

Politics is front and center in our industry right now 

In the immediate-term, government responses to re-opening after Covid-19 lockdowns directly affect production of all types of media content. Differences between countries and cities will be reflected in when different media companies get back to normal pace and what competitive advantages an early return may bring them.

In the medium-term, new regulatory regimes making media companies and/or social platforms liable for user-generated content are becoming reality in some places (like Australia) and center-pieces of political debate elsewhere (US).

An Australian appeals court upheld the recent ruling that media companies can be held liable for other people’s comments on their social media posts. (Expect it to be appealed again.)

New laws are long overdue to address the particular circumstances of social platforms rather than retrofitting laws written for telecom or traditional media. Hate speech, unlicensed use of IP, deepfakes, misinformation…there is a lot tied up in getting this right. Misguided, overly simplified laws here could be costly to media businesses (in a way that disproportionately hurts smaller companies) and exacerbate the problems they aim to solve.

In the bigger picture, a thriving media & entertainment industry requires liberal democracy, which is in retreat globally (see Freedom House reports on media freedom and on democracy). Most notable in the last week is China’s new national security law to criminalize criticism of government within Hong Kong, which has been the go-to outpost for Western media companies’ presence in Asia given its protections of free press and free markets.

It has become common even in the US and other Western countries for government leaders to label free press as an enemy — a culture likely contributing to the 20+ instances on-camera of journalists being arrested or assaulted by law enforcement at US protests this past week despite identifying themselves as press. 

As a political strategy, governments that are among the worst offenders of free expression and civil rights have become highly active in (directly and indirectly) buying stakes in US and European entertainment companies. It’s a bet that business leaders across our industry will self-censor their content for fear of offending a potential future source of financing.

History is filled with a repeating pattern of tragedies that media companies could have helped prevent but failed to address, either out of conscious decisions or wishful diminishment of obvious warning signs. 2020 is a moment for media, entertainment, & gaming companies to recognize that they are participants in the political arena whether they want to be or not. It’s a moment where company leaders need to step up at both the corporate level, by lobbying policy makers, and at the creative level, by evaluating the values their content infuses in audiences/users.

There are few people actually enforcing GDPR

(This was originally published in today’s Monetizing Media newsletter. Sign up here.)

There are few people actually enforcing GDPR
The EU’s GDPR data privacy rules have caused fear and headaches for the media industry given the hefty fines for violating it and the costs to comply. It turns out there are very few people actually assigned to enforce it.

From a report by Brave, the privacy-centric internet browser, Germany is the only country meaningfully funding its GDPR compliance team:

  • Half of EU member states have less than €5m in annual budget for their data protection authorities.
  • Only 6 countries have more than 10 technical specialists on their compliance teams.
  • 1/3 of all the technical specialists across member states (101) are in Germany.
  • Ireland, which is in charge of supervising Google, Facebook, and other US tech giants as the legal home of their European HQs, has only 21 technical investigators.
  • Austria and Belgium don’t even have full-time technical investigators on staff, just contractors.
  • Without sufficient technical investigators — staff with relevant computer science backgrounds — these agencies can’t conduct investigations with enough sophistication to defend their case against well-funded legal teams at target companies.

Webinar on the state of kids media

I hosted a webinar on TechCrunch about the state of kids media amid the Covid-19 crisis. My guests were:

  • Craig Donato, chief business officer of Roblox, the $4 billion gaming platform that counts the majority of U.S. kids age 9-12 among its active users.
  • Nancy MacIntyre, co-founder and CEO of Fingerprint, the company behind Kidimo, a leading subscription video and gaming service for children.
  • Dylan Collins, co-founder and CEO of SuperAwesome, the London-based creator of “kid-safe” adtech and privacy tools.

Read the transcript or watch the video here on TechCrunch >>

How Europe overtook the US in championing free markets

I read the new book The Great Reversal by economist Thomas Philippon then did a Q&A with him about it. It’s a fascinating analysis of a fundamental shift that began around 2000 wherein the US economy has become less competitive and more dominated by its largest incumbent companies while Europe become more competitive. The impact in the US can be measured in higher prices, fewer successful small businesses, and lack of product innovation.

Read my book review here and my interview here.

My interview with Northzone’s PJ Pärson

Today I posted an interview in TechCrunch that I did with Northzone general partner PJ Parson at the SLUSH conference in Helsinki.

We talked about the core investment thesis that has guided him for 20 years, how he went from running a fish distribution to running a VC firm, his best practices for effective board meetings and VC-entrepreneur relationships, and his assessment of the big social platforms, AR/VR, voice interfaces, blockchain, and the frontier of media.

Read it on TechCrunch

SVOD and Protectionism

The Dutch Culture Council recently asked legislators to require SVOD services operating in the country to maintain libraries with at least 15% Dutch content and apply a 2-5% tax on all revenue derived from foreign content streamed in the country. It’s a protectionist move both to nurture the Dutch film/TV industry in a competitive global market and to protect Dutch culture from the overwhelming pop culture influence of Hollywood. It’s also increasingly common around the world.

Local content quotas have long existed in television. Now that governments are wrapping their head around online streaming – and especially amid the surge of nationalist populism – clampdowns are coming.

The EU Parliament voted last year on a mandate that 30% of content on VOD platforms be European (FYI: Netflix’s library in Europe is already ~20% European). National governments are layering national quotas over that. Italy raised its local content quota on TV (which is supposed to include SVOD) to 60%. France already has a 60% quota on TV and is pressuring VOD platforms to substantially increase quotas as well, with Netflix CEO Reed Hastings committing to increase the company’s French content production by 40% in 2018.

In China, 70% of content on SVODs must be Chinese (hence why Netflix doesn’t operate there and instead signed a distribution deal with Baidu-owned iQiyi).

The net effect is a limitation on the amount of international content made available to subscribers in these countries and an increase in local content that doesn’t meet the bar for quality those platforms otherwise require. But the concerns are legitimate. The dynamic of online streaming platforms is a hits business. As Netflix and Amazon Prime Video expand globally, their hit shows become the hit shows across every geography. And the resources these SVOD platforms have to invest in their own content dwarfs that of local studios; even Rupert Murdoch felt 21st Century Fox wasn’t big enough to compete on its own. Local content quotas (and potentially streaming taxes) help nurture the local media industry to produce local hits (and sometimes global hits), which is important economically and culturally.

I wonder, however, how feasible content quotas are outside censorship-heavy states like China. How do you define regulated streaming content vs. content that’s just part of the broader internet (like Youtube videos)? What about SVOD services whose entire niche is to share a certain culture’s content with people abroad, like BritBox – a 250,000-subscriber service entirely dedicated to British TV shows and classic British films? If they’re restricted enough, won’t Europeans just use VPNs to access content that Netflix subscribers get in the US?

(This post is an abstract from today’s MediaDeals newsletter.)