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EU reforms and audience atomisation

For the EU media law landscape, 2018 promises to be a crucial year. It is the final chance before the next EU elections for the Juncker administration to make good on its ambitious proposals for the EU to really benefit from the promise of digital technologies.

December 2017

At the heart of the EU's proposals in the digital space, is the plan to bring about a Digital Single Market (DSM) across the EU, the final pieces of which should be put in place in 2018, and many of which relate to content and audiences. Meanwhile the European Commission is also trying to address what it sees as problems caused by technologies, such as the growth of fake news and the loosening of control enjoyed by European content owners.

The commercial and technological backdrop is quite different now to when the DSM was first discussed. A feature of the modern media landscape which now looms large over the EU's plans is the increasing atomisation of audiences, each of us living in our own bubble of the content we choose and the news we want to hear, when and where we want. Though water-cooler moments of collective enjoyment of TV or sports events still exist (and carry an ever-increasing price tag for broadcasters and platforms), they are becoming rarer. With each new TV box set available by subscription video on demand (SVOD) and as we follow each new influencer in our spheres of interest, so the audiences become more fragmented and harder to reach.

In 2018 this trend will continue to accelerate and its commercial impacts become more apparent. This raises the risk of more regulatory oversight and new laws. The EC's 2018 Work Programme claims that the building blocks of the DSM initiative are now 80% complete. Progress has seemed slow and patchy and many of the proposals have been controversial but the pace may change soon. Alongside anticipated new policies on fake news and the role of platforms in the New Year, April 2018 will see the Portability Regulation come into force and May will, of course, see the General Data Protection Regulation and Network Information Security Directive come into full effect.

Portability will permit end-users of subscription services to carry their subscriptions with them when they travel across European borders. While this may well prove a useful convenience for vacations, its scope extends to lengthy stays away from one's "home" market – reportedly including Eurocrats stuck working in Brussels and away from the delights of Estonian or Maltese TV. The accessibility of familiar content will mean some viewers have another reason to be insulated from their surroundings.

The distribution of video content looks likely to continue its rapid evolution. Major new video services will take hold in 2018, both from the technology players and the content owners, as they seek closer links with their audiences. Territorial and post-cinema windows will continue to shrink (some major movies even opened in the UK marginally before the USA in 2017) and much important content will launch first on SVOD services. Global distribution deals will become more common, and the search for content which attracts audiences across borders, more pressing. In this struggle, content owners look to be among the winners as the budgets for high quality content continue to grow. The other major winners should be consumers as the popularity of and choice between new services grows (are we likely to see the tipping point from terrestrial TV to SVOD soon?). Eventually a new equilibrium will be established and market consolidation will take place.

EU legal changes will be in line with some of this; as well as the portability laws, the changes to mobile roaming in June 2017 will be an important factor in making it easier for consumers to access content of their choice whenever and wherever they want (the Martini effect). The jury remains out on what the EU will do about safeguarding the cultural diversity it also seeks to champion, which its investigation of the distribution models for films, in particular, was accused of ignoring. Meanwhile, on the US horizon, the spectre of the end of net neutrality looms again. Though a less political topic in the EU than the US to date, there is a chance that it may also have a part to play in EU content policy in 2018 and beyond.

As the move to on-demand video services accelerates, advertisers face another busy year finding ways to connect with atomised audiences, and their reliance on influencers to reach those audiences will continue to grow. As the individual pioneers of user generated content have evolved into slick marketing machines, brands are increasingly paying them to endorse products. The debate over where the line lies between communicating with one's fans and advertising is not new, but will continue to grow in urgency in 2018, and looks likely to provoke an increasingly robust regulatory response as the numbers of influencers worldwide grows into the thousands. In 2017 the US Federal Trade Commission pursued its most vigorous action around influencers so far, including its first enforcement actions against influencers themselves while breathing down the necks of scores of others. In the UK, the Advertising Standards Authority has also been active against insufficiently labelled promotional social media use and ads masquerading as objective news. While the ground rules are becoming clearer (tags such as "sponsored" and "#spon" won't now cut it in UK advertising) the desperate need of brands to reach their audiences means there will be many more examples to come.

Significant progress has been made on the DSM in a number of areas with the launch of 35 legislative proposals and policy initiatives; however, only six of these had been adopted at the time of writing. The DSM programme was always ambitious but the race is now on, not only for the Junker administration, but for the EU to keep up with the rapid changes in the creation, delivery and consumption of content.

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Mark Owen

Mark looks at the Digital Single Market reforms in the context of increasing audience atomisation and developing trends in the creation, delivery and consumption of content.

"A feature of the modern media landscape which now looms large over the EU's plans is the increasing atomisation of audiences, each of us living in our own bubble of the content we choose and the news we want to hear."