Connect with us

Media

Facebook eyes a future beyond social media – The Economist

Published

 on


FACEBOOK HAS always had two faces. One is the grimace of a company that many people, in particular politicians, love to hate. President Joe Biden recently accused the social-media giant of “killing people” by spreading misinformation about vaccines against covid-19. (He later rowed back a bit after Facebook pointed out it does quite a lot to stop the spread of such content and to promote legitimate vaccine tips.)

The other face is a happy one of a firm that users, advertisers and investors cannot live without. Analysts predict it will be grinning again on July 28th, when it presents second-quarter results. Revenues are expected to rise by nearly 60%, year on year, to around $28bn—despite Apple’s update in April to its iPhone operating system that allows users easily to opt out of being tracked around the web by apps like Facebook. That would put it on track to exceed $100bn in sales this financial year. Quarterly net profit could come in just shy of $10bn, double that of a year ago. No wonder Facebook looks poised to become a long-term member of the exclusive club of companies with a market value above $1trn, which it joined earlier this year (see chart).

How can a firm with such political baggage be so successful? The answer is two sides of the same coin. With more than 2.7bn daily global users, Facebook’s main offerings—its flagship social network (known internally as Blue), photo-sharing on Instagram and messaging on WhatsApp and Messenger—are a digital magnifying glass of human nature. This glass amplifies the good (neighbourly help amid the pandemic) as well as the bad (conspiracy theories and quack cures). It also serves as a remarkable lens for advertisers to focus in on the world’s consumers. And the two-facedness is likely to become more pronounced should Facebook succeed with its biggest project yet: creating a “metaverse” that would combine a 3D digital world with the 3D physical one.

Genius Dog 336 x 280 - Animated

At its core Facebook is a giant advertising machine. Adverts generate 98% of its revenue. Blue remains a dominant ad platform internationally, raking in perhaps $55bn last year, according to estimates by KeyBanc Capital Markets (Facebook does not break out revenues by service). Instagram, which Facebook bought in 2012 for what seemed like a colossal $1bn, now chips in another $20bn or more, taking its share of overall ad revenues to nearly 30%, up from just over 10% in 2017.

Debra Aho Williamson of eMarketer, a data provider, praises Facebook’s ability to target ads as “incredibly precise”. Advertisers value this highly: Facebook earns more than $9 a year for every one of its users, about twice as much as Twitter does. The firm observes what its users do not only on its own services, but almost everywhere else online. This lets it pick what products to flog to a given user, identify others with similar interests and find out whether they bought something after seeing the ad.

Even before the pandemic hit, this was hard to resist, especially for smaller firms with fewer resources to run sophisticated marketing operations, which make up the bulk of Facebook’s 10m advertisers, but also for most big global brands. Even Chinese sellers are spending hundreds of millions of dollars on Facebook, says Brian Wieser of GroupM, which places ads on behalf of brands. Although Facebook’s apps are banned in China, Chinese merchants can plug their wares to Western consumers thanks to firms such as Wish, an American online marketplace that helps arrange ads, payment and shipping.

No commercial brakes
Covid-19 has turbocharged Facebook’s machine. Confined to home, the average American user spent nearly 35 minutes per day on Blue and Instagram in 2020, according to eMarketer, two minutes more than the year before. That adds up to thousands of additional years of collective attention. While some firms went belly-up or cut advertising spending amid last year’s recession, others were created: 6.6m in America alone since the start of the pandemic. Many want a slice of that extra attention. These days it is unimaginable to run an online consumer business without targeted ads, notes Mark Shmulik of Bernstein, a broker, just as it was once unthinkable to run a business without a bricks-and-mortar shop. A bigger share of such firms’ budgets will be spent on Facebook and its fellow ad-tech giant Google, says Mr Shmulik. Some admen are calling it “the new rent”.

Facebook has added more than 2m renters since the start of the pandemic. It is almost certain to add more of them as economies reopen and digital ads, which already make up 60% of overall ad spending in America, keep chipping away at TV and other traditional media. The impact of Apple’s new tracking opt-out, which four in five iPhone users have already embraced, according to Flurry, a data firm, will not be clear until the next round of quarterly results in October, observes Mark Mahaney of Evercore ISI, an investment bank. But even if this makes Facebook’s targeting a bit less effective, it will still be at least as good as its competitors’, he predicts. And although on July 23rd American trustbusters got another three weeks to refile a lawsuit against Facebook, which had been thrown out last month for lack of evidence, they will struggle to prove that the company is a social-networking monopolist under current competition law. For all the anti-tech bluster in Washington, DC, this is unlikely to change as long as Congress remains polarised.

The bigger threat to Facebook’s continued success, which has long preoccupied Mark Zuckerberg, its co-founder and chief executive, is that virtual masses finally tire of its apps and move elsewhere, pulling advertisers with them. Over the past two years a new generation of social media has emerged that could do just that. Although Facebook’s share of American digital advertising has continued to grow in recent years, its global social-media advertising has been edging down since 2016. The challengers range from specialists such as Clubhouse and Discord, two audio-chat services, to Snapchat and TikTok, which take on Blue and especially Instagram more directly. TikTok fans in America now spend more than 21 hours a month on the video app, compared with less than 18 hours that users spend on Blue, according to App Annie, a market-research firm.

In the past, Facebook might have snapped up smaller rivals, as it did with Instagram. With trustbusters looking over its shoulder, it is instead placing a number of big bets. The first is on the “creator economy”, which lets people make money from digital works such as videos or newsletters. This is an extension of its ad business, but one where it has fallen behind new rivals. TikTok and YouTube, in particular, have been better at attracting creators who keep users glued to their smartphone screens. In April Facebook announced that it was developing new audio features, including Clubhouse-like chat rooms in which listeners can tip performers. In June it launched Bulletin, a newsletter-hosting service that is similar to Substack, which popularised the genre. The following month Mr Zuckerberg vowed to shower creators on Blue and Instagram with $1bn by the end of next year (without specifying what form these payments would take).

Facebook’s second wager looks beyond advertising to e-commerce. It already hosts 1.2m online shops on Blue and Instagram. That puts it in the same league as Shopify, a fast-growing rival to Amazon, which has 1.7m. A month ago Facebook launched a new way to lets buyers try on clothes virtually. It also plans to link its “Shops” offering with Marketplace, its existing peer-to-peer trading service, and WhatsApp, which Facebook wants to turn into a vehicle for chat-based “conversational commerce”, the latest trend in online shopping. Later this year it would like to phase in a version of Diem, its controversial cryptocurrency (formerly known as Libra), that would beef up its payments infrastructure.

For now Facebook has waived seller fees but they could add a few billion dollars to its turnover as soon as next year. Besides bringing in non-advertising revenues, an e-commerce business would also help the company with its tracking problem. If shoppers spend more time and leave more data on its platform the inability to follow them across the rest of the web becomes less important. Mr Shmulik expects the e-commerce landscape to fragment into such walled gardens, each combing shopping and advertising, and operated by a tech giant.

Meta-morphosis
Mr Zuckerberg’s grandest gamble concerns the metaverse. When he spent $2bn in 2014 to buy Oculus, a maker of virtual-reality (VR) gear, many thought he was buying himself a toy. But in recent years Facebook has made further VR-related acquisitions, most recently BigBox VR, the developer of “Population: One”, a shooter game similar to “Fortnite”. This gives Facebook control of a hardware platform for VR and its sibling, “augmented reality” (AR), which serves users digital information as they survey the real world through smart spectacles and the like.

And as with e-commerce, part of Facebook’s rationale could be to create strategic sovereignty, by lessening its dependence on the whims of hardware-makers such as Apple. The potential prize is large. Sales of Oculus headsets contributed around $1bn to Facebook’s revenues last year. If the technology keeps improving, VR and AR are the obvious next phase of video-gaming, which has grown into an industry with global revenues of $180bn.

Mr Zuckerberg’s ambitions do not stop there, however. He doesn’t see the metaverse, which now has its own division within the firm, merely as a place to enjoy games or other immersive entertainment. Instead, he envisages it as a virtual space where people live and work, in keeping with a dream that geeks have harboured since 1992, when the term metaverse was coined by Neal Stephenson, a science-fiction author. In five years’ time, Mr Zuckerberg has said, he would like Facebook no longer to be seen primarily as a social-media company but as a metaverse company.

That would make Facebook cool again. It would no doubt also invite more scrutiny from critics worried about the firm’s power. Should users look on course to spend 35 hours a week immersed in its virtual world, rather than 35 minutes a day, this could invite regulation that actually bites. For now, the metaverse is encouraging something Mr Zuckerberg fears more: competition. Others sizing up the field include video-game firms like Roblox and Epic Games, as well as tech giants Apple, which is reportedly planning its own AR glasses, and Microsoft, which already sells AR goggles. If Facebook beats them to metaverse supremacy, it will have plenty to grin about. Otherwise, expect serious grimacing.

Adblock test (Why?)



Source link

Continue Reading

Media

Migrant worker battling cancer in urgent need of MSI

Published

 on

Halifax, NS (December 6, 2022) – In a video released today, migrant worker Kerian Burnett speaks out about her ongoing struggle with cancer. While she is supposed to start cancer treatments soon, she has no health coverage in Nova Scotia.

Kerian is a 42 year-old woman from Jamaica. She is a mother of 6 and grandmother to 2 children. In April 2022, she came to work in Canada through the Seasonal Agricultural Workers Program (SAWP). After 2 months of working on a strawberry farm, she fell sick and was unable to work. In September 2022, she was diagnosed with cervical cancer, which required two different surgeries. She was advised by her doctor to remain in Canada to undergo life-saving treatments.

In some provinces, migrant workers have access to public healthcare on arrival. In Nova Scotia, migrant workers must have a one-year work permit to be eligible for public healthcare (MSI). This means that SAWP workers are not eligible, because their contracts are only up to 8 months. They would only have access to private health insurance, which is tied to their employment.

Due to her illness, Kerian’s job ended and her private health insurance was terminated.

Genius Dog 336 x 280 - Animated

Kerian is calling on Health Minister Michelle Thomson to provide MSI coverage to herself and other migrant workers in Nova Scotia.

“There are lots of Jamaicans here and other migrant workers here, which come here for work. Nobody wants to be sick, but eventually, you get sick. Now we are working for like $13.35/hour. There is no way if you get sick, and you have a bill at the hospital, how are we going to pay these bills? So, actually, I’m not really doing this for myself alone. I’m doing this for every farmworker that doesn’t have access to public healthcare here in Canada,” said Kerian in the video.

 

To date, a GoFundMe campaign in support of Kerian has raised over $9,000 of the $15,000 goal.

Continue Reading

Media

Guelph drag queen sees all-ages shows targeted by social media campaigns

Published

 on

A Guelph drag queen says their shows are being targeted by two Ontario-based social media campaigns, resulting in the cancellation of one event and the performer feeling uneasy about an upcoming show.

Last month, Crystal Quartz had a drag brunch organized at Kelseys Original Roadhouse in Burlington. But following threats made to the restaurant, management was forced to cancel, the restaurant confirmed to CBC Kitchener-Waterloo. Restaurant management couldn’t disclose information about these threats due to an ongoing police investigation.

Since then, a link to Quartz’s Dec. 11 all-ages brunch at a Boston Pizza in Hamilton was shared in a Facebook group, asking members to purchase tickets to sell out the event in a bid to prevent “sick parents” from bringing their kids.

These incidents come shortly after a mass shooting at a LGBTQ nightclub in Colorado Springs, Colo., that killed five people, and have left Quartz feeling unsafe.

Genius Dog 336 x 280 - Animated

The drag queen posted an impassioned video on social media about the anti-LGBTQ threats that they, and other performers and promoters, have received.

Crystal Quartz is now raising funds to help enhance security at the shows. (Submitted by Crystal Quartz)

Guelph Police Services are investigating the alleged incidents Quartz brought up in the video.

In the meantime, Quartz told CBC News they’re raising funds for an ID scanner, self-defence classes and said that they’re looking into other security options.

“I want to get an ID scanner so that even if the people come in there, we know what their names are at least,” said Quartz.

‘It was absolutely terrifying’

Hamilton drag performer, Hexe Noire, was also confronted during a drag storytime last month at a public library in the city.

There were people protesting the event, but also counter-protesters  with a heavy police presence — something Noire hadn’t seen before.

“This is the first time in my drag career that I’ve been affected directly by this,” Noire, a cis woman, told CBC News. “It was absolutely terrifying.”

This wasn’t Hexe Noire’s first rodeo with storytime, she has done many other drag storytimes across Hamilton, including at Hamilton Public Library’s Binbrook branch on Nov. 14. (Aura Carreño Rosas/CBC)

Noire explained she received online threats as well.

“I’m a mother with four children who goes into the library dressed as a drag clown to teach children about diversity and that it’s ok to be different,” she said.

“Had I had a program such as this for myself as a young queer child, I would have flourished and I don’t understand what the issue with reading books to children is.”

Quartz said that this type of harassment is new as the LGBTQ community becomes more visible and more mainstream.

“Before we were hiding who we were, right? So now we’re being seen more and these people just, they don’t want anything to do with that,” Quartz said.

“And that’s fine. If you don’t like me, that’s cool. Just go on your merry way and I’ll go on mine, right?”

But this harassment isn’t just aimed at drag queens, according to K-W-based trans activist, Cait Glasson. The transgender community is being targeted too.

Activist Cait Glasson believes that education is key in combating transphobia. (Joe Pavia/CBC)

“They’re definitely well and truly emboldened, the transphobic people,” said Glasson. “They are very emboldened. I get threats on my Twitter with some regularity.”

“My personal belief is that the best way to fix it is education,” she said, stressing that understanding about the trans community comes from knowing someone who is trans.

A study done of LGBTQ people in Waterloo region in 2018 found that 10 per cent of those surveyed have experienced violence due to their sexual orientation; 26 per cent faced violence due to their gender identity.

Source link

Continue Reading

Media

Heading Into 2023 Media And Tech Companies Are Tightening Their Belts

Published

 on

Over the past few months, Disney, Paramount
PARA
Global, Warner Bros. Discovery, Comcast
CMCSA
and AMC Networks
AMCX
have all announced employment layoffs, hiring freezes and/or restructuring heading into 2023. Coming out of the pandemic the goal is to continue to grow revenue, reduce debt and increase market value. With viewers steadily migrating to streaming video, media companies have been looking for a moneymaking revenue model as the lucrative linear TV revenue model, that had generated billions for decades, is slowing down. With inflation and concerns about a slowing ad market, media companies, are looking to impress Wall Street as the media behavior of consumers continue to evolve.

These employee cutbacks are not limited to “traditional” media companies, such digital titans as Meta, Amazon
AMZN
, Alphabet, Microsoft
MSFT
and of course, Twitter have also been looking to drive down costs and grow revenue as the digital advertising slows and their market value declines.

Below is a breakout of some recent announcements on the belt tightening taking place across the media and tech industries.

AMC Networks: Ten years ago, AMC Networks was one of the most popular cable TV networks airing The Walking Dead, Breaking Bad and Mad Men. Since then, the cable TV industry has been besieged by cord-cutting as viewers migrated to streaming video. In response AMC launched its own standalone streaming service AMC+. In the latest quarter, AMC+ reported a year-over-year increase in subscribers of 44% and now totals 11.1 million. Nonetheless, for the quarter, AMC’s net revenue dropped by 16% to $682 million with a decline of 10% in ad dollars for the quarter.

Genius Dog 336 x 280 - Animated

AMC Networks Chairman James Dolan noted the revenue losses from cord cutting were not being offset by the gains from streaming. As a result, the Wall Street Journal reported AMC will lay off up to 20% of the estimated 1,000 total employees. Also, it was announced AMC CEO Christina Spade was stepping down after only three months at the helm.

Disney: In early November, Disney’s then CEO Bob Chapek announced cost-cuts (i.e., curtailing business trips unless absolutely necessary), a hiring freeze with potential layoffs. The announcement came in the aftermath of a disappointing quarterly earnings report with Disney’s stock price falling to a 52-week low. In the earnings report Disney noted their streaming services had lost $1.47 billion, more than double the loss from the previous year. Chapek maintained their streaming unit would be profitable by 2024. Ten days later Bob Iger, in a surprise announcement, returned as Disney’s CEO replacing his handpicked successor. Chapek had served as Disney’s CEO in February 2020 just prior to the start of the pandemic.

The 71-year-old Iger agreed to return as CEO for two more years and will look for another successor. Besides developing a new organization chart, Iger announced Disney’s hiring freeze would continue. The CEO will also place a priority on making Disney’s streaming unit profitability instead of focusing on subscriber growth. (In its latest earnings report Disney said that Disney+. Hulu and ESPN+ had 235.7 million global subscribers, up from 221 million in the previous quarter.)

Warner Bros. Discovery: When Discovery acquired Warner Media earlier this year, CEO David Zaslav shared with Wall Street plans to cut costs by $3 billion each year for the debt-ridden company. The merger approval came during a tenuous time, as investors were beginning to take a more hardened look at the revenue potential of streaming providers. In addition, Zaslav told investors the ad economy has been weaker than it was during the pandemic and the merger was messier than previously thought. As a result, the market value of Warner Bros. Discovery has been cut in half this year.

Since the merger Warner Bros. Discovery have undergone a sweeping series of layoffs. In August, 70 people were let go at HBO accounting for 14% of the entire staff. In October, the studio group Warner Bros. Television laid off 82 people which was 19% of the staff. Sports was impacted, in mid-November when an estimated 70 people, primarily at Turner Sports and Bleacher Report, were laid off. With the current NBA media rights contract expiring after the 2024-25 season and the possibility fees could triple, Zaslav has said they would stay disciplined when renewal negotiations begin, saying “We don’t need the NBA.”.

Most recently massive cuts were made at CNN with a reported 400 layoffs. While the direct-to-consumer CNN+ jettisoned within one month of launch, new CNN President Chris Licht announced further layoffs at the venerable news division. The layoffs were made across most CNN units from on-air talent to operations to CNN International. Among the CNN units hit hardest was Headline News which will no longer produce live content. Prior to the cutbacks CNN had a staff of between 4,000 and 4,500 workers.

Warner Bros. Discovery notified the Securities and Exchange Commission that it could cost upwards of $1.5 billion with cutbacks on content that were already approved and severance packages for employees laid off.

Comcast: In September, Comcast announced it was looking to cut $1 billion from its traditional TV networks entertainment division at NBCUniversal. The funding would be allocated to bolster other parts of Comcast’s portfolio such as streaming (with 15 million paid subscribers Peacock has room to grow).

The cutbacks would impact both staff members and programming budgets forcing the network to develop lower cost unscripted shows instead of more costly scripted programming. It’s been reported that 37 employees were laid off at E! Entertainment which was restructuring. NBCU has recently shuttered G4 cable network with 45 people losing their jobs. Additionally, Comcast has reportedly been offering retirement packages to long-time employees. Besides declining linear TV ratings, Comcast continues to be impacted by cord-cutting and broadband subscriber growth has been slowing.

Paramount Global: In November it was reported Paramount Global was cutting back on its ad sales department with fewer than 100 positions in New York and Los Angeles being eliminated. The media company has also made a number of organizational changes in recent months such as the scripted original division of Paramount+ becoming a part of Paramount TV studios resulting in a loss of jobs.

Roku, a streaming device, announced in mid- November they were planning to lay off 200 employees or about 5% of their 3.000 full-time workforce. The company cited the current financial conditions prevalent in the streaming industries and a sluggish ad economy. During its third quarter earnings report Roku executives told investors to expect a challenging fourth quarter.

Netflix

NFLX
: After reporting a decline in subscriber counts, Netflix earlier in the year announced layoffs. In May, 150 employees saw their position eliminated as well as a number of contractors and part-time workers. The following month Netflix followed up with 300 additional employers laid off. At that time Netflix had about 11,000 full-time workers worldwide.

Digital Media: Even digital media companies are pulling back in these uncertain economic times and sluggish earnings reports.

The mass layoffs at Twitter have been well documented, the micro-blogger site has downsized from 7,500 employees to fewer than 2,500 in just a few weeks.

In mid-November Amazon reportedly was going to lay off 10, 000 workers or roughly 3% of its 1.5 million global work force. Cutbacks will be more prevalent with devices such as Alexa.

In early November Meta announced 11,000 employees would be let go accounting or 14% of the entire workforce. The cutbacks were across all divisions and included Facebook, Instagram and WhatsApp. Also, Meta decided to move out of their 250,000 square foot office in Manhattan’s Hudson Yards section. Meta has been focusing on the metaverse and has been incurring startup costs.

In August Snap announced a reduction in their workforce of 20% from what had been 6,400 employers. Snap said the company would be restructuring. The company has been struggling post-pandemic and its stock price had been down 80% since the first of the year.

In October Microsoft announced globally nearly 1,000 workers were to be let go. Similar to other tech companies, Microsoft has seen its stock price tumble this year. Globally, Microsoft has 221,000 employees.

More traditional media are also reporting cutbacks. Gannett
GCI.I
, the nation’s largest newspaper publisher, announced that 200 additional workers (6% of the workforce) would be laid off. Washington Post recently announced that after three decades they would no longer publish a Sunday print magazine, resulting in a loss of ten positions. The last issue will be on Christmas Day. With a cutback in revenue from sponsors, NPR is looking to cut $10 million in costs (3% of their budget), announcing they would severely curtail any hiring and would cut back on any discretionary spending. By doing so NPR is hoping to avoid layoffs. Vice Media announced they will lay off 2% of their staff or roughly 12 members in its sales, branded content, editorial in the U.S., Canada and Europe.

Economic slowdowns and market valuations are transient and a hiring binge in media and tech companies could take place relatively soon as a workable business model evolves. Another silver lining is there are now thousands of experienced and talented workers now available for hire.

Source link

Continue Reading

Trending