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Straight Talk Media & Entertainment

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Let's start the year with a riddle: What do artificial intelligence (AI), branded content, cyberbullying, digital ad fraud, fake news, international terrorism, mobile video, and telecoms, media, and technology (TMT) mega-mergers have in common? Answer: Together, these emerging trends will raise major questions about the supposed neutrality of players across the consumer TMT market in 2017.

To date, Internet firms, broadband providers, and consumer electronics (CE) manufacturers have largely escaped rules governing what uses their platforms, networks, and devices are put to. In some cases, this state of affairs has been sanctioned by government regulations that recognize – explicitly or implicitly – broadband and social networks as mere conduits that cannot or should not be held accountable for the activity on their platforms. In others, some would argue that regulators and policymakers have lacked the authority to counter the lobbying power of major telco groups, the PR skills to win against the populist arguments of tech companies, and the intellectual might to understand how competition has fundamentally changed.

While questions will remain over the ability of traditional regulators to redress these challenges, there are six key reasons why the TMT industry will come under pressure in 2017:

  • The growing divisiveness of the world. Ironically, division propagated by a minority of people – fake news, cyberbullying, and the use of social media by terrorist networks – will unite the majority in becoming less convinced – and even cynical – about tech companies' proudly libertarian stances on protecting "free speech" and their refusal to take action against perceived abuses and abusers.

  • The unprecedented scale and power of tech firms. At the same time, a handful of social platforms will cement their role in society, media, and the economy through sheer force of numbers. Ovum forecasts that Facebook will have nearly 2.1 billion monthly users by the end of 2017 (see Figure 1), equal to one in four people in the world – or one in three, if you exclude China, where access to Facebook is reportedly blocked.

  • Digital angst among traditional telecoms and media. Concern over Facebook et al's growing power will lead to increasingly controversial collaboration and convergence among more traditional telecoms and media players, such as zero-rating of mobile video traffic, Chinese investment in Western entertainment companies, and mega-mergers such as AT&T/Time Warner and 21st Century Fox/Sky.

  • Internet platforms will become (even more) like media companies. Meanwhile, claims by Facebook et al that they are mere conduits for content will become laughable, as competitive and political pressure leads to more direct investment in content and editorial mechanisms, respectively. Facebook, for example, last year revealed plans to tackle fake news and music copyright infringement, and explore investing in original video.

  • Algorithms will look too smart for their owner's good. The Internet platform companies' arguments won't be helped by their boasts about the "artificial intelligence" of their platforms. "If they're so smart, why can't they take action against bad stuff?" the argument runs. But if they can take action, can they be said to be neutral? After all, a decision is a judgement, whether it's made by a human or a machine.

The last issue will raise some fascinating questions about AI and media. Can AI ever be objective (whatever that means)? Where might subjectivity slip in? Via the express strategy of its corporate owner, the unconscious biases of designers and coders, or the "wisdom of the crowd" of humans it interacts with and learns from? Who should be held responsible for any "bad" decisions?

And if we can't fully trust AI, should tech companies be forced to open up their highly guarded algorithms to inspection? Would that even yield meaningful insights, given that even their makers won't really know why AI behaves in a certain way, given that programs are implicitly designed to "think for themselves"? And so, might the "motives" of AI ultimately be increasingly unknowable?

Those questions are unlikely to be answered anytime soon, and the industry will probably need intelligent and trustworthy people to filter the "good" from the "bad" for some time to come. In the meantime, TMT companies looking to deliver a power play in 2017 – whether through scale, consolidation, or computing prowess – would do well to remember that pretending to be neutral won't allow you to duck your obligations. With growing power will come growing – and unavoidable – responsibility.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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