New Media empires - Google/YouTube and Murdoch/MySpace

1. The Google YouTube Tango -- by Jeffrey Chester

Under the radar of all but the most savvy Internet users, powerful commercial forces are rapidly creating a digital media system for the United States that threatens to undermine our ability to create a civil and just society. The takeover of YouTube by Google announced October 9 and the 2005 buyout by Rupert Murdoch of MySpace are not just about mega-deals for new media. They are the leading edge of a powerful interactive system that is being designed to serve the interests of some of the wealthiest corporations on the planet. (EDITOR'S NOTE: The Nation has a content relationship with both companies: YouTube hosts our online videos and Google advertisments appear on this site.)

Aware that social networking sites like MySpace and YouTube are attracting the key youth audience, and aiming to maintain their influence over future generations of consumers, marketers are aggressively seizing the initiative. Leveraging existing relationships with Yahoo!, Microsoft, the phone and cable companies, Google and the other large players, the advertising industry are developing an array of immersive online experiences--like MTV's Virtual Laguna Beach and Studio.com's Go Deep --that seamlessly blend relationships with products and brands.

Advertisers are harnessing technology that targets and follows Internet users on their journeys through cyberspace, collecting data and tracking behavior. Virtual software marketing tools will be deployed across the digital landscape so that wherever we go, whatever we do do--e-mail, instant messaging, mobile communications or searches--we will be immersed in enticing content for the lifelong sell: Witness the work of Oddcast , a New York-based immersive media company, whose "conversational character products" represent a new medium for marketing to get inside consumers' heads.

YouTube capitalizes on the growing proclivity of Internet users to be creators of information as well as consumers. And as the network television and cable audiences age, advertisers are increasingly aware that "user-created content"--be it a cute kitty video or clips from The Daily Show --are key to attracting young audiences. But as the Goo-Tube model develops, behind each video will be a powerful connection to an ad, targeted to the user's online behavior, as well as the stealth collection of personal data. As Ross Levinsohn, president of Fox Interactive, noted about his company's acquisition of MySpace, "the digital gold inside of MySpace wasn't the number of users, but the information they're providing." [Google, it should be noted, now also represents the interests of Rupert Murdoch's US empire. In August Google became Fox's principal online advertising agent for MySpace, Fox TV and Fox Interactive.]

Given this emerging marketing model, the US broadband infrastructure may well become one giant "brandwashing" machine. The most powerful communications system ever developed by humans is increasingly being put in the service of selling, commercialization and commodification. And it will lead to an inherently conservative and narcissistic political culture, in which the interests of the self and the consumption of products are the primary, most visible, media messages. And unless we begin to challenge it now, the emerging digital culture will seriously challenge our ability to effectively communicate, inform and organize.

A handful of companies now dominate much of the US new-media market. Five corporations--Comcast, Time Warner, AT&T, Verizon and Qwest--control the wires and cable lines delivering us broadband, digital TV and, soon, much wireless service. The viral " Singing Puppy " campaign from Nokia is an early warning that soon even our phone calls will become platforms for commercials. A few other major players--especially Google, News Corp., Viacom and Microsoft--have done the necessary deals to strategically grow their broadband content businesses (buying gaming sites and other programming to insure they ensnare the key youth market). Even if the pending update to the Communications Act of 1996 preserves the core principle of network neutrality , the voices of these most powerful media companies are likely to be the loudest.

More mergers in coming years will continue the consolidation of old media giants with the new. It's only a matter of time before a handful of companies will own TV, radio and newspaper properties along with key online services. This further interferes with the ability of mainstream news media to serve as an effective watchdog on government and big business.

Though the Internet was originally envisioned to serve the public interest, there is no guarantee it will continue to do so. Like radio, broadcast TV and cable, it will continue to be shaped by politics, telecommunication policies and the market. Web activists envision a medium that will always support social change and can serve as a platform to distribute diverse points of view. But if the economic relationships between the old and new media are allowed to dominate online culture, what guarantees do we have that the Internet will continue to be the "people's" medium? Events are moving quickly; media and telecommunications giants already have a powerful hold on members of Congress; regardless of which party is in power, it is unlikely our elected officials will deliver a federal policy that that puts the needs of citizens ahead of corporations.

That's why I suggest that progressives begin to get real--and get smart--about digital media. While we have a few reliable outlets-- Democracy Now!, Alternet, Huffington Post and The Nation --the progressive community lacks a reliable well-connected broadband infrastructure that will deliver an array of news and cultural content to national and community audiences. I'm not talking about the wires and connections but about building a coalition of tech-savvy content providers that will deliver to PCs, TVs and cellphones a flow of alternative news and information challenging the status quo.

Imagine progressive organizations making smart deals with a variety of providers to carry this content deep in the heart of the digital distribution system. Imagine nimble, creative enterprises willing to experiment with new business models. Imagine having the courage to go beyond foundation grants and pledge drives and becoming adept at paying your own way. Imagine developing socially responsible advertising that respects personal privacy, is transparent about how data is collected and used, allows consumers to opt out of immersive experiences, fosters independent identity, builds community and supports social justice.

Foundations and the so-called Democracy Alliance have the potential to be the economic engines for such experiments and do the organizing necessary to patch together a content-challenge to the status quo.

As YouTube, Google, MySpace and immersive media marketing reshape the digital landscape, we need to be sure that public interest remains in the picture. And as tech-savvy progressive media find their place in that landscape, we must work together to build an online culture that not only pitches products but works for equity, social justice and the riches of a civil society.

(Jeffrey Chester is executive director of the Center for Digital Democracy ( www.democraticmedia.org ), a Washington-based nonprofit organization dedicated to maintaining the diversity and openness of the new broadband communications systems. He is the author of the forthcoming Digital Destiny: New Media and the Future of Democracy, to be published in January by The New Press.)


2. Mega-Merger vs. Internet Freedom -- by Timothy Karr

Earlier this week, the Justice Department went AWOL on protecting a free and open Internet for tens of millions of Americans. Now it’s left to three men and one woman at the Federal Communications Commission to approve or scuttle the proposed AT&T-BellSouth merger.

At issue is whether the AT&T colossus should be allowed to gobble up the nation’s third-largest phone company in its relentless march to re-assemble the Ma Bell monopoly. But the stakes are much higher today than when – prior to its 1984 antitrust break up – just one phone monopoly ruled the nation’s copper wires and rotary phones.

In 2006, AT&T is poised to control all electronic media – not just telephones, but TV, music and the Web – that will enter homes via its same Internet “tube.” The corporate giant – led by monopolist-in-chief Ed Whitacre – sees Net Neutrality as a major obstacle to this multibillion-dollar scheme. Without Net Neutrality, he’s free to toss the open, egalitarian Internet out the window.

A Big AT&T Is Bad for the Net

On Wednesday, the Justice Department stunned public interest advocates by green-lighting Whitacre’s massive deal without any conditions or judicial review. The FCC as early as today could give a final approval. FCC Chair Kevin Martin has already indicated his willingness to follow the DoJ’s lead and rubber stamp the $78 billion deal without protecting Internet freedom.

In Martin’s view, the proposed merger does not raise a significant threat to Internet choice or Net Neutrality. Regrettably, this view ignores the enormous market power that a new AT&T would wield. The merged entity would become the principal – in most cases only – DSL provider in 23 states.

Martin has also ignored prior statements by executives of both companies. In interviews with the Financial Times, Washington Post and Business Week, Whitacre and BellSouth executives have outlined plans to consolidate their control over the Internet by erecting new online toll booths and discriminating against Web sites that don’t pay their “special service” fees.

“There’s no bigger interest to the public than maintaining a free and open Internet,” writes Art Brodsky of Public Knowledge. “But, like the Justice Department, the FCC is preparing to take a dive on the issue of Net Neutrality.”

Deadlocked at the FCC?

But there is a growing glimmer of hope. Since Wednesday, when the DoJ passed on the deal, more than 20,000 Free Press and SavetheInternet.com activists have sent letters asking for a Net Neutrality condition to be placed on the merger. Two of the four commissioners who will vote, Democrats Michael Copps and Jonathan Adelstein, have indicated that they will support this as part of any merger. But they still need strong public support to prevail.

The fourth, Republican Deborah Tate of Tennessee, is expected to follow Martin’s lead – deadlocking the FCC at 2-2.

According to Harold Feld of Media Access Project, the only way to break the tie would be for Martin to force a fifth commissioner, Robert McDowell, to “un-recuse” himself from the process. McDowell had backed away from involvement due to a conflict of interest from his prior work for phone companies trying to compete with AT&T.

“The FCC General Counsel has the authority to declare McDowell’s recusal invalid if the public interest in resolving the merger application outweighs any appearance of impropriety,” Feld says. “Such a move would be extraordinary, however. To the best of my knowledge, it has never happened.”

It’s up to the FCC to step in where the Justice Department fears to tread; to put away rubber stamps and 11th-hour maneuvers and serve the interests of a free and open Internet and the millions of Americans who use it.

(Timothy Karr is the Campaign Director for the Free Press.)