The world of business is in turmoil and disruption. Many of the issues economists have built entire philosophies on – tariffs, deficits, economic stability – have been roiled in recent years. We may be enduring a period as tumultuous as the industrial revolution that transformed America (and the world) from its agrarian roots. As millions left the countryside for factory jobs in big cities, the face of American business – and all of society – was rocked to its core.
And it ushered in many of the technologies and advancements that have shaped the U.S. in the last 100 years – cars, air travel, cheap electricity, and electronic mass media – especially TV and radio.
But here we are, moving into the third decade of the 21st century, and we're staring down the barrel of the next revolution, rooted in technology. The fact that Andrew Yang is still alive in the Democratic race, while establishment candidates like Bill de Blasio, Kirstin Gillibrand, Beto O'Rourke, Kamala Harris, and more to follow have dropped by the wayside is a statement about his recognition of this existential change in the way America works, plays, entertains, and informs itself.
And like all sweeping revolutions – especially those powered by technology – the jury is very much out whether the net effect is “good” or “bad.” Of course, those terms are too simplistic, unable to take into account the many layers of change, and the impact they have on millions of lives and thousands of companies.
If you were wise enough to have invest in Apple, Amazon, Google, and Netflix a decade or so ago, you've been riding one of the great financial waves of all time. But if you stuck it out with traditional companies like KMart, Toys R Us, Radio Shack, or Kodak, things didn't work out so well.
As is typically the case, Washington moves much more slowly than the frenetic world of business. Legislation has always come too late to protect those from unfair monopolies, substandard working conditions, and unequal pay.
And so it is today, tech companies have grown at insane rates, as billions and billions of consumers become part of company portfolios and databases the size of which we've never before seen. Privacy issues are now taking center stage – a good thing. But so many other issues connected to technology are still very much in the air – and being hotly debated.
Well more than a decade after social media first exploded, consumers and legislators are grappling with the reality that while these platforms have the ability to connect billions of people, they often serve to divide us as well. The ways in which Facebook and other social media machines were co-opted by outside manipulative forces in 2016 are still being debated. Meantime, the next Presidential election will be here before we know it – and there is still much ambiguity about whether political ads will be screened, monitored, or ignored.
We're getting used to executives like Mark Zuckerberg being grilled by mostly uninformed Congressional committees, as politicians struggle to keep up with the technological changes and their effects on their hometown constituents and vast web communities
And that leads us to a growing sentiment among people concerned about the impact of social media and the near-total lack of anything resembling oversight, much less regulation. The Facebook audience is edging toward 2.5 billion global users. Its influence in all areas of society and culture is unmistakable. Facebook has become a major advertising vehicle, challenging traditional media's impact. Its use of Artificial Intelligence and audience data has become more troublesome over times. And as we know, the platform's ability to affect the vote is an issue that first cropped up in 2016, and will undoubtedly impact the November races.
So, should there be regulation of Facebook and other social media behemoths?
That's the question actor Sacha Baron Cohen took on last month, speaking to the Anti-Defamation League. Here's a guy who's made his reputation on political and social parody, often pranking real people as well as famous politicians and celebrities. And he's deeply concerned about social media and Internet companies running rampant without guard rails.
The 5½ minute video – excerpts of Baron Cohen's speech – focuses on Facebook and other Internet companies, and its lack of regulation:
The transcript of his speech is here.
In his talk, Baron Cohen refers to the mega-Internet companies as “the biggest propaganda machines in history.” And he singles out the heads of these companies – “The Silicon 6” as he calls them – as being “all billionaires, all Americans, who care more about boosting their share price than protecting democracy.”
Noting they are “unaccountable to any government,” Baron Cohen's take is these companies need to root out hate and lies on their sites and on our screens. But their executives often claim that regulation is a form of repression not congruent with American society.
So, segue to my morning at the FCC a couple weeks back. I had the honor of moderating a group of passionate broadcasters in front of the Commission staff. The goal of this session (and a later one dedicated to the state of broadcast television) was to help sensitize the FCC to the current plight of broadcasters in a rapidly changing media cycle.
Hartley Adkins (iHeart), Caroline Beasley (Beasley Media Group), Alfred Liggins (Urban One), Jeff Warshaw (Connoisseur) were all part of a panel making the case that government regulation hurts their ability to compete against these same Internet companies, along with those that specialize in audio, including SiriusXM, Spotify, Pandora, and others.
Telling the stories of their companies, the broadcasters each made a compelling argument for deregulation, in an environment where the competition has never been more intense, whether you own hundreds of stations or you're in charge of a single station – like Karen Slade who manages KJLH in L.A. While they differed on a number of issues, they all came down on the same side of this issue.
Warshaw reminded the FCC staff, “In our local markets when we have scale, we provide better, more diverse programming, more local service, more public affairs programming, more news…We are competing with companies that are a hundred times bigger than us…We're at a huge disadvantage, and they're unregulated.”
Liggins added, “Technology is eating traditional media from a standpoint of making media a loss leader…the FCC's mission has been to steward the public airwaves and have content for the public interest, and under the current landscape, that mission is in danger.”
And Beasley noted, “We talk about media ownership – scale – in small, medium, large-sized markets…That may not increase revenue…but what that does do, it helps broadcasters take advantage of synergies within the market. We are able to spread our operating costs.”
BIA's Mark Fratrik sees radio across the entire spectrum, and made this observation: “Sometimes we forget that while you may reduce the number of staff members (with consolidation), you are actually strengthening the stations you're acquiring. There are a lot of under-performing stations who don't have a sound financial basis…While we strive for diversity of ownership and diversity of opinions, these under-performing stations aren't offering that much, and they're on the precipice of faltering or going down.”
You can watch the entire session here:
Now, deregulation opponents will no doubt cite many reasons why the Telecommunication Act of 1996 failed to spawn innovation, diversity, and investment. And back in the 1990's, some radio broadcasters were clearly more focused on serving their investors rather than their communities.
But that seems like a world ago. In this highly charged media environment, the radio broadcasters on my panel told compelling stories about why less regulation may be radio's best and only shot to stay in the media game, and continue to provide some semblance of local, community service.
Clearly, regulation – or the lack of it – will be at the center of many media conversations and debates in 2020. As both Sacha Baron Cohen and our group of broadcasters agreed, mega-Internet companies are in a remarkably powerful position with little to no governance or rules.
How all of this squares with an audiences in flux, advertisers untethered from traditional media plans, and Internet companies growing more powerful by the day, remains to be seen.
But it does speak to just how unstable and disruptive the world of media has become.
That message is getting across.