Should Comcast and Facebook be the gatekeepers of our content?
Monday, February 24, 2014
On Feb. 13, Comcast announced that Time Warner Cable would be merging with the cable giant. Comcast — whose portfolio also includes a 51 percent stake in NBC Universal — says the merger "creates multiple pro-consumer and pro-competitive benefits, including for small and medium-sized businesses."
But not everyone viewed this latest expansion for the company as a positive one.
Pittsburgh-based market research firm CivicScience, shared that only 5 percent of polled consumers think the merger is a good idea, with most respondents worrying that the merger would result in higher prices. Cable industry expert Mitch Weinraub questioned whether this could spell the end of cable TV as a competitive industry.
Others drew parallels to the dismantling of AT&T in 1984 into various regionalized "Baby Bells," as it had become too big and powerful to enable fair market competition or be regulated effectively by the Federal Communications Commission. These arguments make sense to some degree, as Comcast is expected to have ownership almost 60 percent of cable subscriptions after the merger.
There is, however, one critical difference: AT&T controlled a utility, whereas Comcast controls content and information — a fact that is further amplified by the U.S. Court of Appeals for the District of Columbia's January 2-1 ruling that the FCC cannot enforce net neutrality. Prior to that decision, the enforcement of net neutrality ensured a level playing field where internet service providers couldn't prioritize certain types of traffic or traffic sources over others.
Comcast vs. Netflix
When it comes to promoting a healthy market competition landscape — the onus behind net neutrality — popular video-streaming platform Netflix is an example of Comcast's ability to control the flow of content to consumers.
Netflix makes public the speeds at which consumers can access their platform across U.S. internet service providers. From November 2012 to January 2014, ISPs such as Google Fiber and Cox Communications have trended positively in this regard, with most recent speeds being tracked at 3.78 megabits per second (Mbps) and 2.69 Mbps respectively.
In the same time period, Comcast kept speeds for Netflix steady (around 2 Mbps) until November 2013. Between October 2013 and January 2014, Netflix speeds plummeted by a little over 27 percent, from 2.07 Mbps to 1.51 Mbps.
The disparity between those two numbers might seem negligible, but Comcast customers were outraged by the noticeable difference in service. On Oct. 21, a Comcast subscriber created a thread on the company's own support forums to ask a simple question: "Is Comcast blocking Netflix?" Over the next few months — with the last dated comment occurring on Jan. 14 — "JL" received nine pages worth of replies to the question.
Many comments were customers stating they were also experiencing latency issues with the streaming video service, with no discernable hardware issue to blame. There was also intense speculation by contributors to the thread as to what was causing the system-wide problem.
A deal is struck
There seemed to be no end to this dispute. Then, Comcast announced Feb. 23 that Netflix had consented to a "mutually beneficial agreement," ensuring better quality of service for consumers through a direct connection to Netflix servers. The direct connection technology is called "Open Connect."
Though Netflix says Open Connect is free for internet service providers, the company will be paying Comcast an undisclosed sum over the lifespan of this multiyear deal to safeguard against any further traffic disruptions or service degradation issues.
While Comcast's speed-throttling of Netflix prompts justified analogies to AT&T's monopoly in the 1980s, there are larger issues at play. Not only do Comcast's actions demonstrate how they're able to restrict what content their subscribers consume, it is also clear the cable giant is powerful enough to force competitors to pay more money just to guarantee something as basic as delivered service to consumers.
If Comcast's merger with Time Warner Cable is allowed to proceed, is it right that more than half of all cable subscribers will potentially have their content curated for them by a single ISP, even if it is technically supported by the law? Moreover, what kind of precedent has the deal between Comcast and Netflix set?
Facebook's changing landscape
Comcast, however, isn't the only one making waves as a rapidly emerging content-curating superpower.
On Dec. 5, Facebook made waves when it further revised the algorithm controlling what people do and do not see in their news feed. Their announcement, titled "What increased content sharing means for businesses," stated the goal was to ensure Facebook users were getting the "right content at the right time."
But that meant brands leveraging the social network's powerful infrastructure to execute marketing strategies would potentially see negative trends in their metrics, such as decreased "organic reach" — the number of people who see a post in their news feed.
Facebook was correct. Ignite, a social media agency, examined 689 posts from 21 different brands with Facebook pages from the first 10 days of the revamped news feed strategy and found brands suffered an average 44 percent decrease in their reach. One brand, identified only as "Brand H," saw an 87.8 percent decline in organic reach, as well as a 73.1 percent decline in the number of engaged users.
On the surface, this new strategy makes sense. Facebook is attempting to position itself as a one-stop shop for valuable news and information in their personal circles, as well as the world around them. In order to achieve this balance, Facebook has implemented changes that prevent brands from turning the platform into an advertising free-for-all.
But there is a disparity between what Facebook wants to be and what it is, as dictated by its users.
Where to go for news
A recent study from the Pew Research Center found only 30 percent of adults in the United States who use Facebook report consuming news on the platform. Of that 30 percent, 22 percent actively perceive Facebook to be a valuable news resource.
When it comes to what qualifies as “news” on Facebook, personal interest lists, slideshows and entertainment lead the charge with users in gaining traction with Facebook users. And websites like BuzzFeed are flourishing, even though many of their articles contain the same memes Facebook says it's trying to phase out.
Their new algorithm has also resulted in stories that are often days old often being prioritized in news feeds over more current updates from others, making Facebook's platform a less-than-optimal environment for the modern day 24-hour news cycle.
There is some speculation that Facebook's push to be more news-oriented is an attempt to compete with its social rival, Twitter. Twitter, unlike Facebook, does not actively curate what people see on their feeds — it is left up to the users to decide who they want to follow and how they want to organize their Twitter stream with their list tool.
Because of this hands-off approach, Twitter's platform has become a space where real-time news unfolds from primary sources and news outlets, in addition to marketing measures by businesses.
All about control
Twitter's decision to leave everything in the hands of their users also highlights another issue. Facebook gives their users control over what they see in their news feed with active tools like being able to hide posts from specific users or pages.
But by deciding what is "quality" content, Facebook is undermining the most basic control given to people who use the site: Users make active choices to follow particular pages — whether it's for a brand, nonprofit or prominent individual — and by making that choice, those users are implicitly stating they are interested in the content that appears on those sources.
An anonymous source close to the situation supports this contradiction by admitting those who are trying to market themselves on the Facebook platform "have always been plagued by a misperception that the number of fans you have is the number of people who will see what you write. This has probably never been true. Get it out of your head."
The most interesting part of this most recent algorithm change is Facebook's obvious move away from helping product-based companies disseminate their message. Well, helping them free of charge, anyway.
In response to criticism run in The New York Times in early 2013, Facebook vehemently denied throttling posts to force brands to buy advertising as a means to boost revenue. Again, it was all about providing the most "relevant" and "engaging" content, and nothing more.
It's difficult, however, to take what Facebook says at face value for two reasons.
First, in December's blog post to businesses — after underscoring their pure desire to define and deliver the most relevant content — Facebook suggested that brands "should continue using the most effective strategy to reach the right people: a combination of engaging posts and advertising to promote your message more broadly." Then they link to a three-page pitch on the value of businesses to spend more money to effectively engage users.
Second, Facebook's public rebuttal to The New York Times article — called "Fact Check" — no longer exists on the social network's newsroom site. The original link to the statement retains the original "Fact Check" title, but it now outlines Facebook's guidelines for law enforcement.
As the old saying goes, "history repeats itself." The same logic applies to monopolies, which the U.S. government has been fighting to regulate as far back as 1890 with the Sherman Antitrust Act.
Comcast and Facebook may seem quite different from each other — the former is the traditional faceless corporation, and the latter is a young, fun start-up that prides itself on social interaction and innovation. In reality, they are two sides of the same coin. Both companies are playing out that age-old refrain of rapid expansion and growing influence, predictably prompting criticisms of having too much power.
This time, however, it's not about utilities or natural resources. Comcast and Facebook are major players in a new era where the Internet, social media and content are king. Moreover, there is a consumer expectation that the Internet is a free-flowing and uncensored democratic medium.
Unlike AT&T at the time of its dismantling, the products and value propositions of Comcast and Facebook directly and indirectly guide decision-making, mold perceptions and provide a curated snapshot of news and information.
Neither organization seems to be implementing their often-questionable practices as a means to further any sort of nefarious personal or political agenda — it's just business. Both want to beat competitors to be the biggest and the best in their respective space, which are also the same goals of their rivals.
But the motives of Comcast and Facebook are circumstantial given what's at stake. In the context of their industries, they are governing how individuals and businesses interact with the world around them at a fundamental level.
In this new content-driven age, the gatekeepers deciding what we do and do not see are entities that are ultimately just trying to increase their own bottom line.
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