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.)