Five to 10 years ago, independent bloggers used to be able to getby on internet advertising, like the broadsheets of yore. But that changed quite quickly, and for two big reasons: Facebook and Google. They now gobble up the vast majority of internet advertising dollars — about 85 percent, as my colleague Jeff Spross writes — and a great many media outlets have been forced to move to direct subscriptions or other business models.
Google and Facebook manage this because they are platform monopolists. They can exert tremendous influence through their control of how people use the internet — and crush productive businesses in the process. Like any monopoly, it is long since time that the government regulated them to serve the public interest….
The upshot here is that both Google’s overwhelming search dominance and their profitable exploitation thereof are almost wholly unmerited in terms of their actual product. Google is a fine tool, but what defines the company is luck. Its profits come from a largely unearned strategic position within a socially-created communication medium. Devouring a small business that provided Google and the internet writ large with quality research simply to keep people fenced onto their own portion of the internet is just one particularly egregious example how this position can be abused.
[More news from royalty deadbeat Facebook trying to mimic royalty deadbeat YouTube for the same old shite revenue share deal. Are we going to get the okie doke hillbilly deal yet again?]
The world’s largest social network has redoubled its efforts to reach a broad accord with the industry, according to interviews with negotiators at labels, music publishers and trade associations. A deal would govern user-generated videos that include songs and potentially pave the way for Facebook to obtain more professional videos from the labels themselves….
Facebook’s interest in music rights is inextricably linked to its growing interest in video. Having siphoned ads away from print, online companies have recently targeted TV, which attracts about $70 billion in advertising a year. While Facebook faces competition from Twitter Inc. and Snapchat Inc., its main rival is Google, and music is one of the most popular types of videos on Google’s YouTube service. Facebook declined to make an executive available for an interview.
According to Andrew Flannigan on NPR:
Facebook plans on giving [paying artists and songwriters for their labor] a college try, having hired Tamara Hrivnak away from YouTube, where she was the video giant’s director of music partnerships. Hrivnak, who was also an executive at Warner Music Group [right–7 years ago] before joining YouTube [for what must have been the big bucks], will be using her extensive contact list [because the music industry just loves YouTube so much] to mediate Facebook’s goals around music with the many, many wishes of the industry which controls the rights to that music [starting with getting a license for something]. As Music Ally points out, publishers — those in charge of administrating songwriters’ work — have been asking the social network to strike deals for months.
“I’m joining Facebook to lead global music strategy and business development. This is a new adventure for me and I look forward to deepening Facebook’s relationship with the music industry [you mean, look forward to continuing to stiff artists and songwriters Facebook style or YouTube style?].
Music is important and it matters — it connects and binds us to times, places, feelings and friends. My career has been dedicated to growing opportunities for music in the digital landscape. Facebook is all about making the world more open and connected and music can play an important role — I’m excited to join that effort.”
Facebook pointed to Hrivnak’s post when asked for clarification on her role.
If anything takes the heat off YouTube a little in 2017, it could be the music industry’s increasing concerns about Facebook, which utilises the same safe harbours as Google, but without paying any royalties at all to the music community.
The big shift at Facebook of late, of course, has been to video content. The social media giant sees video as key to its future consumer offer and advertising business, and prioritises video content in its users’ feeds. That has resulted in an ever increasing number of users uploading and sharing video content that is hosted on Facebook’s servers, putting it ever more closely in competition with the [licensed] Google service….
[Facebook] formally unveiled Rights Manager – it’s rival to YouTube’s Content ID – last April, giving [some] rights owners the power to remove their content from the Facebook platform when it is uploaded by users without permission [if you agree to a bunch of terms Facebook won’t reveal until you “apply” for Rights Manager and are “approved”]. But, while big bad YouTube’s Content ID also provides [some] rights owners with monetisation tools, Rights Manager is currently all about takedown [because there is no monetization on Facebook because Facebook is unlicensed]. Which is to say, it’s a technology mainly designed to assure [royalty deadbeat] Facebook safe harbour protection.
The proposed merger of AT&T and Time Warner has drawn censure from both sides of the political aisle, as well as a Senate hearing that looked into the potential for the combined company to become a monopoly.
But if we are going to examine media monopolies, we should look first at Silicon Valley, not the fading phone business.
Mark Cuban, the internet entrepreneur, said at the meeting of the Senate Judiciary Antitrust Subcommittee last week that the truly dominant companies in media distribution these days were Facebook, Google, Apple and Amazon.
“Facebook is without question in a dominant position, if not the dominant position, for content delivery,” he said.
Look at the numbers. Alphabet (the parent company of Google) and Facebook are among the 10 largest companies in the world. Alphabet alone has a market capitalization of around $550 billion. AT&T and Time Warner combined would be about $300 billion.
Facebook is buying back up to $6 billion of its stock from shareholders, the company announced in a SEC filing on Friday.
Facebook said the repurchase program will go into effect in the first quarter of 2017 and does not have a fixed expiration date. The company said the buybacks will be consistent with Facebook’s “capital allocation strategy of prioritizing investment to grow the business over the long term.”
Shares in Facebook rose over 1% on the news in after hours trading.
It’s uncommon for tech companies like Facebook to return cash to shareholders through buybacks or dividends, as they generally prefer to spend their cash on growth opportunities. This is Facebook’s first ever buyback program.
And Facebook is still selling artist names for keywords….