Interviewer: Peter Houston
Peter: Can you tell us about the history, aims and ambitions for Digital Content Next?
So, D.C.N, Digital Content Next…we launched about five years ago. We were formerly known as The Online Publishers Association, but we are 100% exclusively focused on the digital content companies, both news and entertainment. Our simple tagline is to ‘advance the future of trusted content’. But what that should mean, is doing what we can to explore, understand and provide strategy, policy, advocacy, work for the content companies 100% focused on the future and where things are going.
And the member list that you have is insane, just run through some of those guys. That’s quite a list.
Thank you. It really is… it’s the must-know brands across what was the television newspaper magazine world. But in the native digital companies too, it includes everybody from the New York Times and Washington Post to Conde Nast and Disney and CBS and NPR, Atlantic Media, Vox Media, Slate are some of the native digitals.
Even there’s people like WebM.D. in there, and the Weather Channel…
Yeah I know. Both. So, anybody that has got a brand that’s really built off of trust in providing news information and entertainment to the customer. I think what’s important is every one of these companies has a direct relationship with both the consumers and the advertisers.
What we don’t have in our membership, which is probably equally as important is, we don’t have the ad tech companies, the vendors, the social networks, the search engines.
If someone came along and, I’m not thinking of the platforms or the vendors but if a publisher came along and wanted to join and you didn’t think they met a certain criteria, would you say thanks but no thanks?
We would we would, yeah. And that we have that criteria spelled out, and it has happened at times, our membership committee makes the decision.
What does that look like? What’s the rules and regulations?
I mean one of the simplest ones that really does separate most of the wheat from the chaff if you will, is that a majority of your resources and investment needs to go into the actual funding of the news and entertainment, in the professional news entertainment. So, that alone, as soon as you’re putting your own resources towards the content, normally separates most of the players out there.
So not aggregation or just that kind of republishing type model.
OK. So I don’t think I’m giving away any trade secrets if I say you’re a well-known critic of the Duopoly. You must spend so much of your time both reading about what’s going on there, but also thinking about it. What’s the biggest challenges that you think Google and Facebook actually pose for your members, why are they such a big deal?
Yeah, you labelled me a critic, and I understand that that term. It’s not like I wake up in the morning attempting to be critical of their businesses. But we spent probably about, I’d say about three years ago, spent a good amount of time analyzing the scenario…there was a lot of celebration across digital media that it was growing 20-25 percent per year. And everything was rosy across the industry. And what we were finding is regardless of what type of company it was, if you looked into aggregate across the companies that were actually creating the news entertainment, they weren’t growing anywhere near the clip that was being discussed.
And so we started to break down the numbers, and the simple math was that a majority of the growth in the industry was going to two companies. So, that’s easy for everyone to understand. We use the term duopoly, and it kind of carried its own flag and became a widely discussed phenomenon.
The challenge that we really were trying to point to that finally is becoming a discussion in a more material way, is what makes them so dominant, and so hard to compete with. And at the end of the day, we believe that’s their ability to collect data across the web, across our lives, across devices, and to micro target advertising against it. And in a way that is so powerful that it usurps and replaces the real value of the media itself in the content or the experience.
And so, that’s the biggest challenge I see for our members is that, unless that data is available to everyone, you can’t compete on the targeting that has become, what is the most critical element in digital media.
Just think part of that in terms of your role is to get people focused back on that trusted content creation rather than just the microtargeting. Microtargeting is clearly a big deal. But without that trusted content then what are we talking about?
Yeah, without that then, this is the interesting thing and why Google and Facebook are also such an important and positive players if they’re rightly controlled, they’ve got the best engineers on the planet, and they’ve got more money than anyone. They have the ability to do real moon shots and move mountains to solve these issues. And at the end of day, we believe their users want to discover higher quality. We believe that whether it’s through search or sharing with their friends.
And so, you’re kind of in this vicious cycle where the way the guardrails of their profits work and the economics work, it’s squeezing the oxygen out of the actual news and entertainment that the end consumer really wants. And that’s not good for anyone. And so, it’s how do we hold these companies accountable?
So, if you if you were to put a label on what you’re trying to achieve it’s a rebalancing in that sense?
Yeah. I think it’s a good term for it. That’s a proper value exchange. So what I would call intermediaries, the folks that are sitting in between the advertiser and the end consumer, that they are not able to continue to capture a majority of the growth in the industry and the welfare that’s that’s being created.
Do you think Amazon and Apple I guess are also part of that issue?
Yeah they are in different ways. I mean Apple is because of its closed platform and most acutely the way they’re able to dictate the revenue shares. That’s problematic, and the speculation last week that they’re rolling out their new subscription platform and taking 50 percent, is obviously alarming. It speaks to their desire to use it as a growth vehicle for their own business because they have a dominant position.
Amazon’s different. There’s a lot of positive excitement about, are they competing now, does that make it a triopoly? I think probably no one wants a triopoly more than Google and Facebook, because it probably takes a little heat off of the two companies. But then they compete in a very different way, which is linking the commerce, and bundling in advertising with the product placement, which creates a whole different set of concerns and challenges.
But they’re still fairly…it’s all speculative, but even if they’re at 10 billion dollars of advertising a year, that’s still very small relative to Google, Facebook.
So more and more people seem to be turning to the idea that government should be taking on a role in tackling these problems. I know the recent DCMS report in the U.K. struck a chord with you. You’ve got a huge thread at the top your Twitter feed, and we’ll actually stick a thread reader link into the newsletter on that because it’s a great way to get the jist over. But it’s so easy to get lost in the minutia of these government investigations and reports. If I was to say, can you give us a headline finding of that DCMS report, what would it be? What was the most important thing to come out of that for you?
I think I think they probably captured it with Facebook’s inability to self regulate itself and really to obfuscate what was clearly a massive privacy issue that our FTC here in the U.S. is still evaluating. But, they had 80 plus million personal data records that were harvested and sold by a company that was propped up, and then ultimately used for election ads on their property. And rather than disclose that when they knew about it, which it’s still a question of when they actually knew about it they…I think you can only consider really a massive cover up without clear information from them that proves otherwise.
And so, I think probably the bigger global lesson, beyond getting lost in the weeds of the details of those investigations, that committee out of the U.K, the DCMS committee, did a fabulous job of learning about the issues. And if you watch where they were nearly two years ago when they started the investigation, to where they are now as a committee and as individuals, and I’m sure the staff, they are incredibly educated on the issues.
And as much as we in America made a joke of Mark Zuckerberg’s testimony to Congress and the questions that were asked. I think that DCMS committee is proof that the lawmakers can actually step in on behalf of the public they represent and get educated. And we all can get educated, the folks that try to cover and follow the industry, and I think that was an important output too.
So in that sense is Europe leading the U.S. on this, and more importantly will the U.S. follow?
I think that’s true. We made a conscious decision probably about four years ago that nothing probably was going to happen in the US in terms of trying to hold these companies in check, and that there was more likely to be movement in Europe. And that included the antitrust investigations that were being opened by the EU and then GDPR and data privacy regulation. And I think that’s played out in the way we expect it.
I think where we were wrong, and I’m surprised at how quickly that discussion has now moved back across the Atlantic, and how quickly especially in Washington, here in the US, how quickly it’s turned on Google and Facebook. They’ve lost they’ve lost this halo that they had in which nobody could question their motives.
I mean that’s a great way of putting it. Do you think that these kind of investigations get behind the curtain and show people that the problem here is not so much that these guys have got great technology. The problem is that they’re skewing the playing field, much the way Microsoft did years and years and years ago?
I think that’s absolutely right. In the case of Facebook there’s legitimate questions that they have even answered that only I think lawmakers can demand answers on, that actually forced them to show underneath the curtain, and some of the decisions they made.
Now, there were e-mails that were leaked out, that DCMS got their hands on, and you see a little bit into that. But at the end of the day if you’re a Facebook or Google, or any large dominant company, and you control the guardrails around your profit if you will, you’re always going make the decisions that bring you in more money. In some ways that’s your fiduciary obligation. And somebody has to hold that in check.
Playing devil’s advocate with this, do you think regulations like the EU copyright directive, Articles 13 and 11, can actually work where you’re making platforms responsible for copyright, or taxing them for linking?
Yeah…let’s put aside copyright for one second. I think there are certain types of regulations that can work. And the biggest fear is always that they lock in the dominant players because of their ability to influence the regulation. And so you have a law in Europe with GDPR, that I think is is quite well written. And if properly enforced, there’s still the question about the will to enforce, but if properly enforced, there’s a lot about what Google and Facebook are doing or how they operate, that run into either GDPR violations, which they’re starting to, or antitrust violations, and how they they manipulate it.
In terms of other regulations around content censoring and making sure that harmful content is taken off platforms, that worries me a lot more. These are private platforms, and I’d much rather the government not be involved. I’d rather the platforms be forced to focus on not spreading harmful content. So, don’t censor that piece of content that’s on Facebook just because it’s it’s false. But please eliminate the ability for it to reach millions of users. So, eliminate the virality and the recommendation engines that actually fuel spreading disinformation. But please don’t censor it.
That that part worries me more and there’s some movement that’s happened in Germany and in other countries that I think we need to sit back and watch because I don’t think it’s it’s clear that that’s a good role for the government.
Copyright is the most probably controversial, and I think part of that is due to Google’s influence and ability to try to change the narrative of what that really is. The elements of the Copyright Directive that’s been passed, mostly are in favor of publishers and have plenty of interesting ways to avoid the worries that everybody continues to pass around.
So, this term ‘link tax’ I think is a complete misnomer. That’s not what it is. But it was labelled that by Google. And so, you see the Financial Times, which full disclosure is one of our members, did a great piece on, great reporting on how Google was influencing the publishers to try to win them over on copyright advocacy and I think… You just have to keep your eyes wide open. At the end of day, Google’s out to protect Google.
I think that’s an interesting point that people do forget, because they use these products so much, they forget that they’re for-profit organizations, and they’re driving force is to make money. And people forget that because they’re so close to them.
That’s right. And to be fair to, and I think this is where the halo came from in DC, here in the US is, they’re doing things and inventing things that are quite amazing, right? So, to be able to have what we have in our pocket at all times, in terms of an information device, versus what we had 10 years ago, is quite profound.
Now does that mean that just because I can pull out a device and basically I have access to any information I want in the world, that Google should also be able to track every single foot that I walk with that device? So, who sets that proper value exchange, and we need to make sure that the power of what they bring to the table doesn’t overlook the common sense human expectations that we should have.
So back at that question of balance again.
Yes that’s right.
Again, being a little bit cynical. Government can make all the reports they want but ultimately it’s the money that’s going to talk here. It’s only when advertisers stop spending with Facebook or with Google that things are going to change.
That is in the list of stakeholders that can make them change more than anybody. So, Facebook is 98 percent advertising, Google 90 percent advertising. So, the platforms at the end of the day have one customer, and that will drive change.
And… I think you’re cynicism’s right, if I’m describing it properly, that these advertisers are so beholden to the channels that they’ve developed with Facebook and Google that it’s hard for them to just speak out. And they’re so small relative to these businesses. Even if you take the largest advertiser in the world, they’re very very small. So, unless they’re willing to speak out publicly, which is literally just job risk for a CMO to speak out publicly against Google and Facebook, then you’re not going to see that happen.
I mean we had stories in the last 48 hours here in the US around disinformation in anti vaxers, and the other one is around pedophilia exploration on YouTube, and a few advertisers pulled out. But, if you can’t get on your soapbox and say I’m not going to invest in a platform that has pedophilia being spread, then it’s really hard to imagine that anything’s going to hold them out at this point.
So, If if you had your superpowers, if we could give you the superpowers to fix this mess, how would you fix it, how would you fix media?
If the super powers allow me to change things tomorrow, I would actually eliminate any ability to use data outside of the actual product experience that you’re choosing to use. You’re seeing this start to happen. Facebook… Germany’s now said Facebook can no longer use data across Instagram, WhatsApp and the Facebook platform. That’s a big deal, and it worries them greatly. Google shouldn’t be able to collect data across 75 percent of the top websites out there. If you limit the ability for that data to be able to be collected across your life, and across the web, then you put a lot more power back into the actual companies that the user chooses to use. At the end of the day, that aligns with the user’s expectations.
And so, the intersection of data policy, which you have with GDPR, in competition law, is critically important. And I would dive in there. And to be fair, that’s starting to happen in a lot of different areas. And so. I’m actually optimistic right now, and seeing in the last year to two years, that discussion start to play out. And I think that’s a wonderful thing.
So GDPR is media’s superpower.
GDPR actually can be a positive for the media, if properly enforced. And so, giving resources for that enforcement I think is critically important.
Talking about positives, your summit in Orlando in January was striking for a completely female lineup, which I don’t think I’ve ever seen before, certainly not at the sort of level that you guys are working at. Why an all female lineup? Why why not 50/50 or a gender split of some other type?
We just did that this year, based on…for years I’ve been with the organization we have always strived to lead with actual balance, well beyond gender, but the types of both individuals and companies on stage. And a gender perspective we’ve always tried to be close to 50/50. And I think we’ve done a good job as a team.
This year we decide to tip the scale, put our thumb on the scale just this year. And we had top female executives across every topic that we knew our members wanted to hear on, and we thought, ‘Let’s do this, let’s just pick the females this year, just this year’, and the greatest compliment was that everybody at the end today was talking about the topics, and how smart the speakers were, and how much the the event was as good as it’s ever been, and not about the fact that it was an all female lineup.