Broadband Industry Blasts FCC's 'Counterproductive' Net Neutrality Rules

• by Wendy Davis  @wendyndavis, Yesterday

Consumer advocates cheered news that the FCC is preparing to restore the Obama-era net neutrality rules, but the broadband provider industry is blasting the move as counterproductive.

The agency plans to vote later this month on Chair Jessica Rosenworcel's proposal to reclassify broadband as a utility service and impose common carrier rules -- including prohibitions on blocking or throttling traffic, and creating paid fast lanes. Those rules were approved by the FCC in 2015, but repealed during the Trump administration.

The cable lobbying group NCTA--The Television and Internet Association says the proposed rules -- which it dubs "net fatality" -- would hamper broadband deployment.

“In the absence of any harm, the FCC is barreling ahead with a backward-looking, unnecessary proposal,” president and CEO Michael Powell stated.

“Reimposing heavy-handed regulation will not just hobble network investment and innovation, it will also seriously jeopardize our nation’s collective efforts to build and sustain reliable broadband in rural and unserved communities,” he added.

Industry organization USTelecom separately called the proposed rules an “anti-consumer regulatory distraction.”

But advocacy group Public Knowledge hailed the agency's upcoming vote, arguing that classifying broadband as a utility service will allow FCC to address potentially discriminatory practices, and protect broadband users' data.

The move will “equip the FCC with the flexible authority it needs to address emerging threats to the open internet, including discriminatory interconnection and billing practices, and to safeguard internet users’ sensitive personal information from being used by broadband providers in abusive or undisclosed ways,” Public Knowledge legal director John Bergmayer stated.

Net neutrality proponent Free Press argued in a report issued earlier this week that open internet regulations won't stop broadband providers from upgrading and deploying their networks.

Rosenworcel stated Wednesday that the repeal of the Obama-era rules “handcuffed” the agency's ability to “fully secure broadband networks, protect consumer data, and ensure the internet remains fast, open, and fair."

She added in a video posted to X (formerly Twitter) that the proposed regulations will enable the agency to "protect the internet in the name of national security and public safety."

“If there's an internet outage in your area, the FCC could now have the power to work with companies to help fix it,” Rosenworcel said. “And if bad actors and foreign adversaries are using our networks for nefarious purposes, we would now have additional tools to fight them.”

Commissioner Brendan Carr, who voted to repeal the former rules, stated Wednesday that he plans to vote against the proposed neutrality rules.

"I’m a No on this unlawful plan," he posted on X. "Americans want more freedom on the Internet—not micromanagement by government bureaucrats."

The full text of the proposed rules won't be available until Thursday, but an FCC summary said that reclassifying broadband as a utility service will give the agency more authority to investigate internet outages, and to protect users' privacy -- including by prohibiting carriers from selling consumers' geolocation data.

 

Wieser Revises '24 Upward, Again

• by Joe Mandese  @mp_joemandese, March 25, 2024

Citing improvements in the U.S. economy, ad industry economist Brian Wieser this morning revised his ad outlook up for the second time since first benchmarking his estimate in September 2023.

Wieser now projects the U.S. ad economy will expand 5.6% this year -- up from the 4.3% he originally projected in September 2023, and up from 5.2% in his last upward revision in November 2023.

"To explain why I’m more positive about the market than I was before, future economic expectations -- which I already viewed positively throughout 2022 and 2023 -- have improved noticeably," Wieser writes in this morning's edition of his Madison and Wall newsletter. "GDP forecasts for 2024 in real terms were up by nearly a percentage point in February vs. November in the Philadelphia Federal Reserve’s most recent Survey of Professional Forecasters’ release, with implied nominal GDP expectations approaching 5% for 2024 vs. closer to 4% previously."

Significantly, Wieser's outlook excludes what also is expected to be a record year for political ad spending in the U.S., which is projected to add as much as $11 billion to the U.S. ad economy -- from both up- and down-ballot spending, including issues-oriented advertising.

Interestingly, most of that political ad spending will benefit traditional media -- especially linear TV -- which otherwise might be continuing its downward trend.

Nearly two-thirds of 2024 U.S. political ad spending is projected to be allocated to TV, with a third going to digital, which is the opposite ratios of the overall U.S. advertising marketplace.

In this morning's updated forecast, Wieser projects U.S. digital ad spending -- excluding political -- will rise from 64% last year to 76% by 2028.

"Meanwhile, I expect television at a national level (including connected TV) to continue to experience the challenges I have written about previously (i.e. creative destruction in the economy favoring advertisers who use little television and mix shifts from incumbent advertisers favoring “performance” media overlapping negative sentiment driven by cord-cutting and ad inventory erosion)," Wieser writes.

 

National Amusements to Sell 80% Paramount Stake to Skydance: Report

• by Wayne Friedman , Yesterday

National Amusements, which holds a near 80% voting stake in Paramount Global, has reached a deal to sell its interest to Skydance Media, a major film/TV production company on Paramount’s lot, according to a report in Bloomberg.

Representatives for National Amusements did not respond to inquiries by press time.

Skydance -- which has worked with Paramount on hit films including “Top Gun: Maverick” -- has had interest, according to previous reports, in only acquiring the studio operations at Paramount Global.

The deal is believed to be a bit complex -- predicated on Paramount also striking other deals, all of which need approval from Paramount board of directors, according to the story.

Skydance Media is run by David Ellison. His father is billionaire Larry Ellison, chairman and chief technology officer and founder of Oracle.

Shares of Paramount stock rose sharply late on Wednesday, closing up 15% at $13.52.

In addition to Skydance, Paramount continues to field other offers for the company -- a $11 billion offer for its studio from Apollo Global Management, as well as other deals that are wider in scope from media entrepreneur Byron Allen and Warner Bros. Discovery.

 

COMMENTARY

Why Does Gen Z Look So Old?

• by Aaron Paquette , Columnist, March 29, 2024

The following was previously published in an earlier edition of Marketing Insider.

Of all the conspiracy theories on social media, one of the most innocent yet perplexing: Why do millennials (born 1980-1996) look younger than Gen-Zers (born 1997-2012)?

For starters, millennials are one of the most health-conscious generations. They often developed skin-care regimens early on, and have long valued healthy eating, exercise, and abstaining from alcohol. While they’re the first generation to encounter social media in their late childhood or young adulthood, it’s not indigenous to them, and they didn’t obsess over their appearance in selfies from a young age. And when they were teens and young adults, Botox and other “enhancements” weren’t available as readily as they are today.

Millennials also benefit from the effect that many facial procedures and enhancements leave patients looking “mid-to-late-twenties.” The same is true for those who wear heavy makeup with dramatic contouring. When an older millennial gets fillers and makeup leaving them with a mask-like appearance of someone in their mid-twenties, this sets the clock back 10-15 years. But when someone who’s 18 undergoes these same procedures, they tend to move the clock forward by a decade or so.

Experts also point to other lifestyle factors that might prematurely age Gen Z. They’re a generation especially likely to vape, a habit that can create facial wrinkles. They’re digital natives, constantly glued to their screens, and the blue light emitted by these devices could be aging them more rapidly, as well as a lack of fresh air and exercise if they’re always indoors. And perhaps their higher stress levels over climate change, income inequality and student debt are aging them more rapidly as well.

As a result, numerous posters on X have started raising this question. The Daily Mail recently investigated this phenomenon, posting side-by-side photos of Taylor Swift (age 34) and Emma Chamberlain (22); Avril Lavigne (39) and Millie Bobby Brown (19); Kim Kardashian (43) and her sister Kylie Jenner (26); Sarah Hyland (33) and Billie Eilish (22); and Selena Gomez (31) and Sabrina Carpenter (24), all looking about the same age.

Even the New York Times weighed in, asking, “Why does Gen Z Believe It’s ‘Aging Like Milk’?” However, their writer came to a different conclusion, hypothesizing that Gen Z isn’t aging more rapidly, but instead, is just hyper-aware of any signs of aging, as a generation that grew up on selfies, and can trace the smallest signs of aging across their Instagram posts.

What can brands do to help Gen Z look and feel better?

*Promote age-appropriate skin care. Before teens and young adults go down the road of Botox and fillers, promote organic solutions such as sunscreen, acne treatments, moisturizer and exfoliators, to protect and preserve vulnerable skin.

*Get them moving outside. Fresh air and exercise (while using a high-SPF sunscreen) also tend to create a youthful appearance, as well as a healthy “glow” from working up a sweat. Brands can recommend fun activities to make Gen Z more physically fit while also helping them make connections "IRL” that transcend social media.

*Encourage them to quit vaping. Not only does the act of smoking cause creases on the face, but it also has the potential to artificially age the cardiopulmonary system…and nobody really knows what’s in those chemicals that Gen Z is sucking down, or their long-term effects. For any Gen Z-targeted brand, a solid CSR initiative would be to encourage them to give up vaping in favor of edibles, gummies, mocktails, coffee or just about anything else.

With a little care and creativity, brands can help Gen Z rediscover the fountain of youth, and look and feel their age once again.

 

Big Tech Vs. The Marketing Industry

• by Sara Nelson , Yesterday

The following was previously published in an earlier edition of Marketing Insider.

Recent updates and innovations from the tech giants  -- while offering some benefits to consumers and marketers -- have resulted in less control for advertisers over consumer data, campaign tactics and more.  From the pros and cons that come with increased automation to the looming deprecation of cookies, marketers once again need to learn to adapt.

The increase in automation, in campaign tools like Google’s Performance Max, has undoubtedly made digital marketing campaigns easier to run and brought more opportunities for hyper-personalization. However, this automation gives marketers less strategic control and, if the campaign is not performing up to expectations, makes it difficult to see which elements aren’t working.

In June 2021, Google first announced that third-party cookies would be removed in 2023. A  series of delays pushed the timeline to “late 2024.” In mid-January of this year, Google finally began deprecating third-party cookies for 1% of Chrome users globally, preceding stated plans to put this measure into effect for 100% of Chrome users by Q2 2024.

The drawn-out timeline gives marketers additional time to plan alternate strategies, but the year of delays raises doubts over the accuracy of the announced implementation date, and there are still questions about what deprecation will actually look like.

While objections to third-party cookies -- particularly those that monitor a user’s web activity and then re-target them with ads while they’re visiting other sites -- are understandable, there are some functions that are arguably harmless to consumers but highly important to marketers. For example, one tracking function can tell a marketer that 70% of their monthly web traffic comes from, say, Facebook, allowing them to allocate future marketing dollars based on that insight. There’s been some indication that this limited type of tracking will be retained, especially for major media players, like Meta, who have adjusted how their pixel collects data in order to preserve some of that valuable information. 

One of the newest developments from Google also comes as something of a mixed bag: Demand Generation (Demand Gen) is the latest version of Discovery ads, which users might see on their YouTube feeds, Google Discover feeds, Gmail inboxes and other places.

With Demand Gen, Discovery gets a sizable, AI-focused upgrade, and video ads are now possible. Demand Gen also promises more specialized targeting, in the form of lookalike segments and device targeting, but marketers don’t get to choose where their content will show up. So, while this represents a growth opportunity, there is also more loss of control. 

This trend continues to hold, as Google announces a slew of AI-powered updates in Q1 of 2024, expanding the reach of automated assets, which can now show in place of manually created assets if Google’s AI predicts better performance.

The digital marketing landscape changes quickly, and with it, the interface between marketers and the latest tools at their disposal. While we await updates and the impact of some of these major changes, we must adapt and learn more about the levers remaining to optimize our campaigns in this AI-focused landscape.

 

COMMENTARY

AVOD's Rocketing Future Growth - But With Higher Subscriber Fees Attached?

• by Wayne Friedman , Staff Writer, 5 hours ago

Despite the major growth of so-called advertising video-on-demand (AVOD) platforms, including those free connected TV (CTV) channels -- don't think for a minute that streaming subscription price hikes will be going away.

Far from it.

Rethink Research, an forecasting/consulting company focused on technology, estimates that by 2029 subscription revenue will make up half of revenues on those platforms. 

But it says we need to consider how those bigger streaming platforms -- those with hybrid subscription fee/limited advertising -- fit into that mix. 

Every major streaming platform -- including Amazon Prime Video, Netflix, Disney+, Max, Hulu, Paramount+ and Peacock -- not only has those new or expanding ad-option deals for consumers, but will adjust its consumer/business model in how they will need to generate future revenue.

The math, says Rethink, is obvious. By 2029, it predicts those consumers using a free CTV/streaming platform -- with advertising -- will  generate just “$8 on average”, with paid subscribers able to “generate $39.” I am guessing this data is the total average revenue per user measure (ARPU), which factors in consumer fees and advertising.

This all suggests that those fast-growing FAST channels (Free Advertising-Supported Television) might need to change their name over the next few years.

Does this mean the likes of Tubi, Pluto, Roku Channel -- among seemingly hundreds of other channels -- will begin to charging a small but alarming fee to access that content?

It sounds crazy. Still, it wasn’t that long after NBCUniversal started Peacock, with a free, no-subscription-fee/advertising option, that it abandoned the whole idea, moving to where all its product options have some subscription fees.

These advertising video-on-demand platform are projected to bring in over $546 billion in revenue over the next five years, says Rethink. 

It seems that advertisers and increasingly consumers will share as major backers of this business -- perhaps in ways we might think are unimaginable.

 

COMMENTARY

Consumers Cutting Entertainment Costs? Live Experiences Still A Good Bet

• by Wayne Friedman , Staff Writer, Yesterday

Consumers want to cut some entertainment costs -- in theory. 

Polls might suggest consumers to do the right thing when it comes to their home finances.

But will they really make the call to opt out? Maybe here and there.

The good news -- in part -- is that streaming platforms aren’t the highest on the list -- cutting broadband and internet spend is.

According to a Morning Consult poll, 62% of U.S. adults say “it's important to spend less within the next 12 months” when it comes to broadband and internet monthly outlays. Right behind this comes consumers' mobile phone plans, at 61%. 

This would make sense. Mobile and broadband are typically packaged together and that number can be anywhere from $120 to $200 a month, depending on the added products.

Increasing those added products/services are TV/video streaming services. But not always.

Video streaming subscriptions are at 51% for consumers to cut those costs, while cable/satellite TV subscription is just under that mark -- 49%.

Consumers can closely identify and associate with their important “entertainment” movie studio/TV network brands. Few really want to cut back in those areas, since for many they represent recreation, relaxation and fun.

But attaching consumers to a specific broadband/mobile brand? Perhaps that isn’t so much of a thing -- with Verizon, T-Mobile, Spectrum, AT&T, or another brand.

The survey was conducted on March 2 through 4th of this year, among 2,203 U.S. adults.

Of course, streaming/video monthly costs may look somewhat different to consumers now that they are buying around five services a month -- which can be perhaps total $50 to $65 or so, depending on the streaming options they want.

Other potential areas that might take a hit include music streaming (45%); books (42%), concert tickets (40%) and movie tickets (40%). The last two seem to be those In Real Life (IRL) entertainment areas consumers still want an attachment to -- not just to artists but to other consumers and live experiences

So what are those seemingly untouchable expenses to cut? Seemingly video gaming subscriptions and video game purchases -- 34% each.

But the entertainment area they want to most avoid is sports betting, at 30%.  And a related area at 35% is sporting event tickets. 

What can one learn from this, generally speaking?

It seems that when the excitement level rises a bit, the still "cool" medium of TV and video has nothing on the "hot" and infinitely more entertaining experience of being there.

Perhaps the "virtual/at home" entertainment world will soon need a facelift. Place a bet on the "over."