As the prophets of doom circle about supposedly struggling traditional media, Google, Apple and Facebook increasingly appear to be potential saviours for legacy media players willing to convert to their ways of doing business.
The story is often overwrought, but there is no doubt that all media are in the throes of wrenching changes. And at the heart of these changes, several things stand out.
First, Canadians are and always have been extensive media users. We are the biggest Internet users in the world, spending on average more than 43 hours per month online – greater than the 33 or 36 hours per person in the U.S. and Korea, respectively. We are some of the biggest users of Google, Facebook, online video and generous contributors to Wikipedia, as well.
Digital media are growing and the profits and revenues of most media have done well, with the partial exception of newspapers and some debt-addled companies, notably Canwest, that have crashed and burned. Meanwhile, Google, Facebook and Apple have staked out a commanding place within their own domains and at the junction between new and old media.
The three digital behemoths are the corporate face of digital capitalism. They also embody a shift that has made the Internet more searchable (Google), sociable (Facebook) and mobile (Apple) over the past decade.
None of these entities creates much content, but Google audaciously wants to organize it all. Apple wants to make information available anywhere, any time, on any of its devices, while Facebook wants you to share as much of your life as possible.
These three firms compete with other media content companies and with one another. This is especially true with respect to Internet advertising (Google versus Facebook), which grew tenfold worldwide over the decade into a $66.2-billion (U.S.) business, and the massive information and communication technology domain (Google versus Apple) valued at roughly $1.6-trillion.
The shift to a more searchable, social and mobile Internet can be discerned in the evolution of Google. Its great innovation originally was to make the Web easily accessible and to help shatter the walled garden model of the Internet, where media giants such as AOL Time Warner and Bell Globemedia used their portals to direct people primarily to their own branded content.
Google has since spawned a ballooning suite of functions – search, GMail, Google Books, Blogger, browsers (Chrome), Docs, video (YouTube), operating systems (Android) – that aim to grab more of users’ time and to put more of the Internet on its own servers, or in the cloud as the industry jargon now puts it. Its unrivalled role as provider of the general search utility is also expanding in lockstep with the rapid growth in smart phones and mobile Internet.
This extensive range of services provides more reason for people to stick around, rather than just search and run. Consequently, Google dominates search – accounting for 65 (the U.S.) to 95 per cent (Australia) of all searches – in every country worldwide, except China, Japan, Korea, Russia and Taiwan. With revenues of $30-billion in 2010, nearly all of which came from advertising, it accounts for just under half of all Internet advertising revenue worldwide.
So far Google has consolidated its position by providing mostly utilitarian functions: search, scan (Google Books), link (Adwords) and store (YouTube). There are many reasons to be concerned about the possibility of a Googlopoly and some regulators are beginning to probe the company’s grip on search, advertising markets, privacy, and the recently rejected Google Books Agreement.
The fact that Google has forced wrenching changes upon the music, television, film and news industries has also bred a small army of enemies. This, in turn, has played into its growing rivalry with Apple and Facebook – for users, content, capital investment, and advertising revenues.
Rather than curbing its powers, however, many want to use Google’s colossal reach to make websites that encourage copyright infringement invisible to its search engine, as the Protect IP Act now before the U.S. Congress would do. Its refusal to play such a role is commendable. However, such instances also reveal one of the bad things about any big media company, including Google: they are easy prey for all manner of regulation.
