Lack of regulation ‘benefits tech giants’

NATPE: The lack of regulation faced by FAANG firms (Facebook, Amazon, Apple, Netflix and Google) compared with traditional TV is giving the tech giants a major advantage, a panel of Wall Street analysts told Natpe delegates.

Morgan Stanley’s Ben Swinburne

“These online scalable platforms are essentially unregulated,” said Ben Swinburne , MD of Morgan Stanley, during the View From The Street panel.

“They have no vertical integration limits. And those are huge, huge benefits – lack of regulation has given them huge advantages.”

He added that a recent German competition authority investigation into Facebook “could be an indicator” that a Europe-led challenge to the size of such tech firms may be on the cards.

His comments were echoed by Michael Nathanson, partner and analyst for MoffettNathanson, who described the FAANG players as “invaders from the north” in the TV sector. Netflix, the first of the streaming giants to move into original content, was initially seen as a friend by Hollywood studios, he added.

“But Netflix got to such a scale that everyone worries it’s become a frenemy,” Nathanson said. “The same execs who run studios and networks are very nervous to see them come down with these giant chequebooks.

Analyst Amy Yong

“The speed of change I kind of relate to a Game of Thrones episode. People used to be in set lanes, but now they no longer stay in their appointed lanes; people are converging and competing in lanes they never used to.”

Macquarie analyst Amy Yong said “the big risk for the next five to 10 years, when you think about bigger players” would be the arrival of Chinese digital giants Alibaba and Tencent into the original content market.

“You really have to start thinking about media in a global landscape,” she said, adding that traditional media firms should look to mobile for opportunities.

“Mobile really is a big thing for media companies going forward – less time is spent on the big screen as everyone is glued to their phones.”