Sky and regulation: media companies v internet giants

Jeremy Darroch

Sky’s chief executive Jeremy Darroch this week called for tougher regulation of online content and for a new regulatory body to be set up to oversee content on the platforms of tech giants such as Google and Facebook.

The fact that one-time disruptor and pay TV buccaneer Sky is calling for ‘more regulation’ – albeit “industry-led” regulation on a “co-regulatory” model – is quite something, and shows just how far and how fast the media environment is changing.

Sky, like other audiovisual-industry players with a legacy that is rooted in providing services for specific national territories and in broadcast, is increasingly on the defensive in the face of the onslaught from rootless global internet giants that can provide services across national boundaries without submitting to any of the obligations imposed by lawmakers on local service providers.

Broadcasters in general, and pay TV groups in particular, are making their voices heard under the common rallying cry of of calls for a level-playing field.

Darroch has written to digital, culture, media and sport secretary Matt Hancock, urging him to set up a new regulatory body with power to ensure that internet giants are responsible for the content published on their sites in order to “stem the flow” of “illegitimate and even dangerous” content on the web.

The Sky chief has previously called for a crackdown on the tax advantages of tech giants over national players.

Darroch is not the only pay TV executive to call for internet companies to be reined in. In fact, rarely a day passes without a European pay TV or television executive making a similar point. This week Altice France chief executive Alain Weill called for European policymakers to “stop being naïve” in the face of aggressive competition from US and Chinese internet giants that have build global businesses on the back of net neutrality and said that it is important to “open the debate” on making them pay network operators to transport their data.

Weill also told the Les Echos newspaper that there was an urgent need for a reform of France’s outdated audiovisual regulations to permit, for example, personalised addressable advertising on television, or cede the market to the ‘GAFA’ – Google, Amazon, Facebook and Apple – group of companies.

Also in France, Canal+ chief executive Maxime Saada this week blamed local regulators – rather than the internet companies themselves – for the collapse of the pay TV group’s own SVOD service, CanalPlay.

“While Netflix and Amazon were arriving in France, Our video-on-demand service, CanalPlay, was unable to benefit from exclusivity of distribution. This injunction, which has just been lifted, has been fatal for it, since it has shifted in the meantime from 800,000 to 200,000 subscribers,” said Saada.

The feeling of unfairness and a lack of a level-playing field unites pay TV and broadband players. The key elements where the internet giants are held to have the upper hand are lack of responsibility for content published on their sites, an ability to avoid paying taxes, an ability to avoid local obligations to support content creation and an ability to make use of net neutrality to transport huge amounts of data on the back of investments made by others. As areas of broad principle, pay TV companies, broadband providers and free-to-air broadcasters are united on these points.

Consensus tends to break down occasionally when detailed proposals are on the table, however, with broadcasters less keen on proposed legislative changes that they believe will restrict their own freedom of manoeuvre.

The EU’s revised Audiovisual Services Directive, which forced video sharing sites to put in place measures to protect minors and imposed minimum quotas of European content for VOD providers, was welcomed by public broadcasters but condemned by commercial players, in part because they believed it not go far enough  to provide a more equitable regulatory balance between broadcasting and online rules.

Reforms to copyright that would make internet firms directly responsible for material posted on their sites have also proved divisive, with broadcasters and media groups united with internet players in finding proposed changes – now kicked into the long grass by the European parliament – over-burdensome.

It is clear that the current regulatory environment does not provide the sought-after level-playing field between media companies and online players. The media groups will however need to unite around a common set of principles if they are to more effectively take on the formidable lobbying power of the tech giants.