Lessons for media businesses from competitive platforms

As early as 2015, media companies had a sneaking suspicion that third-party platforms might not have their best interests at heart. The term that got bandied around to describe Facebook and Google was ‘frenemy’. Not even a handful of years later, the rhetoric is less ambiguous – the platforms are the feudal lords, and publishers are the serfs allowed to till their land.

The pushback against that situation is now underway – through campaigns organised by the industry, through lawsuits designed to level the playing field, through dialogue with the platforms – but the truth is that the power balance is still skewed against publishers.

And it was a situation that the publishers should have (and probably did to some extent) see coming. Journalism trainer Adam Tinworth points out that Facebook had already done exactly the same rug-pull with marketers, but unfortunately, the promises of revenue from the tech giants ultimately proved too alluring for publishers.

Regardless of how the attempts to redress the issues with Google and Facebook go, hopefully media companies have finally learned that every other entity in the media landscape, at every step of the value chain, is a competitor. And if not, lessons can be learned from the following examples of the rug being pulled out from players in the media industry…

YouTube’s tightening of the purse strings

With all the news around YouTube (another Google property) lately being about the potentially unsafe environment for ads and some truly bizarre and scary algorithmically generated children’s videos, it’s easy to forget that YouTube has been messing creators around for some time. While the last big controversy erupted in April of this year, there’s been a steady stream of complaints from creators about demonetisation of their content and mysterious rule changes for years.

For some creators, the changes and YouTube’s complete opacity when it came to explaining them has driven them to other video services like Twitch. For the most part, however, a lot of the creators who depend upon the service for their livelihoods are stuck in the same No Man’s Land as publishers with Google and Facebook, only being able to react to the changes and fight constant ContentID battles. And while the lustre of the ‘pivot to video’ has definitely been dulled by some news lately, many media companies are still relying on digital video for growth over the next couple of years, and they should be aware that video distribution and monetisation are also controlled by Google and Facebook.

Patreon ignites artists’ ire

This week Patreon, a funding and payments platform that let users make regular payments in support of artists and creators, made changes to how its payments are calculated. While its reasons for doing so do make a certain kind of sense, that it chose an option that supposedly minimised the financial damage to itself while risking the livelihoods of its stable of creators has sparked controversy.

Hey @patreon you’re doing great pic.twitter.com/Ig39DMyQEn

— Inceltic Frost (@jephjacques) December 8, 2017

The smart money suggests that Patreon did this after feeling pressure from its investors, and it serves as a reminder that platforms and services view its users as the commodities from which they make money. It’s unfortunate that smaller artists had to find this out the hard way – though there are other options out there, and if there’s one lesson media companies need to take away from the past year it’s that over-reliance on any single platform is a costly mistake.

Netflix’s usurping of studio power

As we touched upon last week, studios and production companies were blindsided when Netflix, which had promised and delivered a new means of distribution, started producing its own original content and playing a role in the erosion of their traditional business models. It’s reached the point where those same studios are taking their ball and going home, but by this point they’ve played an undeniable supporting role in the creation of a competitor that might ultimately supplant them.

It’s a story that news and magazine publishers recognise all too well. The success of early native and sponsored ads for publishers inevitably led to the launch of content studios within those brands themselves. While it’s a challenge to replicate the quality of content created by media companies, and the scale to do it effectively, it’s far from impossible, and brand publishers are now active competitors for magazine companies.

Those three examples are far from the only ones: The reality is that every other player within the media space has their own agenda. So while the existential threat to publishers from Google and Facebook is painful, ultimately it might lead everyone involved to remember that you should always look out for number one – and realise everyone else is doing exactly the same.

Chris Sutcliffe

[email protected]