Which is more platform dependent as an industry segment, video on demand or social media entertainment?
Tentative platform dependency analysis of the Finnish media landscape
The purpose of this blog post is to test-drive the concept of platform dependence as used by Poell et al (2021). Platform dependence is a concept related to the rise of the platforms as dominant actors shaping the media landscape. The authors define platforms as data infrastructures that facilitate, aggregate, monetize, and govern interactions between end-users and content and service providers (Poell et al 2019) and platformization from an institutional perspective as the evolution of platform markets, infrastructures and governance frameworks (2021).
The platforms have become gatekeepers to media users. Think of smartphones: there are two dominating platforms operating the app stores: the Alphabet-owned Google Play Store for Android devices and the Apple-owned Apple store for iOS devices. These platforms decide what apps users can conveniently download to their smartphones.
Picture 1. Leading mobile operating systems in Finland as of December 2021, by market share (Statista).
Social Media Entertainment (SME) industry
Social media platforms and their subsidiaries, or platform instances (Nieborg & Helmond 2019) have shaped the media landscape by giving rise to an entire new industry: social media entertainment (SME).
Cunningham & Craig (2021) argue that “SME is an emerging, distinct industry based on previously amateur creators professionalizing and monetizing their content across multiple social media platforms to build global fan communities and incubate their own media brands.“
According to Cunningham & Craig “SME comprises an industry ecology of platforms, creators, intermediary firms, and fan communities operating interdependently, and disruptively, alongside legacy media industries as well as VOD portals, down the middle of Madison Avenue (the advertising industry), and across global media cultures (ibid.)”
While there have been developments toward convergence and consolidation in the media business before, the accumulation of wealth - data, power - into fewer hands, has accelerated during the platform era.
In “Platforms and cultural production” (2021) Poell et al provide a framework of analyzing the institutions and practices of platformized cultural production and call for future research from different geographies and industry segments making use of the framework.
How might one begin analyzing the platform dependency of an industry in a specific country? The authors suggest that those who wish to assess how dependent certain media industries are on platforms should consider the history of an industry first: was it previously independent of platforms?
Many cultural industries established in the 20th century were historically platform-independent: the printing press, book publishing, broadcast tv and radio, the music industry, and the film industry. An exception would be the gaming industry, which, as software, always depended on platforms such as the PlayStation or Xbox.
Social media entertainment is by nature a platform-dependent activity for any business participating in it.
Video On Demand (VOD) Industry
Another interesting industry segment is video on demand, VOD. Under 45-year-old Finns watched more streaming tv than linear broadcast tv in 2021 (Traficom). The most popular subscription-video-services (SVOD) in Finland in August 2021 were Netflix, C More and Elisa Viihde / Viaplay according to Finnpanel.
Picture 2. Most popular SVOD/Pay-TV services in Finland in August 2021. (Finnpanel, pdf)
In Finland, the national public service broadcaster Yle has provided a selection of public service programming online since 2007. It has been successful to the extent that Sanoma, the company running the leading Finnish multi-channel media company Sanoma Media Finland, has complained to the European Commission (case ongoing).
A company in the video-on demand (VOD) business can be platform-independent, if their services are accessible to customers on the open internet, by using web browsers. In that sense, for instance, the Finnish broadcaster VOD services Ruutu, MTV Katsomo as well as Yle Areena can be considered platform independent. It is when they strive to reach those customers who would only use an app, that they are rendered platform-dependent because the apps have to be accepted into the app stores by Alphabet and Apple.
Video on demand distribution to users is thus arguably partly platform-dependent. This concerns both mobile users and users at home viewing video content on their connected TV:s. So whenever the access to content is via an app, platform dependency of distribution occurs. This is true in case of various VOD business models from premium subscription to ad-supported, or some hybrid of those models, all the way to free access in the case of the public broadcaster Yle’s BVOD service Yle Areena in Finland.
Table 1. [Draft] platform dependency analysis, two video industry segments, Finland
Some differences in platform-dependence can be observed in the phase of content creation. Nowadays videos can be shot with the social video app as a camera tool, with various effects encouraged, vertical (9:16) video format being the industry standard.
The creator, who utilizes the app in content creation, where his or her followers then engage with it, are of course fully platform-dependent. They are firstly dependent on the platform instance (say, the Instagram app), and also, indirectly, dependent on the mobile app ecosystems of Alphabet and Apple, because that’s how Meta (the owner of Instagram) must deliver its apps to its users.
Quite a tangle of interdependency.
Finally, the phase where the money comes in, can be more or less platform dependent, depending on choices made by the creator/content rights owner/publisher.
When we consider for example those social media content creators, who are in the Partner Program with YouTube, they are dependent on YouTube’s platform governance on that part of their income. YouTube applies a criteria for the content’s advertising-friendliness, which the content creators have to adhere to, lest they be demonetised (denied advertising placement).
When the content creator has commercial partnerships with brands in a way that the money flows from the advertiser to the influencer (sometimes via influencer agencies, sometimes directly), it can be argued that the content creator is somewhat less dependent on the platform, because even if that content were demonetised by the platform, the creator would still have their remuneration.
However, to continue selling their channel media space, making partnerships with brands, the creator has to maintain their channel in compliance with the platform’s rules. The creator may strive to reduce their platform risk by publishing on several platforms, but this is time-consuming and may not always be successful as audiences are different on different platforms.
We can conclude that in the business of social media entertainment, one has to accept the platform dependence as a reality. It is the nature of doing such business.
If we then further examine the monetization model for the content creator, we can distinguish different strategies. In the VOD industry segment, there is the traditional intellectual property (IPR) licensing model, where the content is commissioned by the distributor and the creator is compensated whatever the fee is agreed upon by the parties. There is also venture capital involved as exemplified by the finnish IPR.vc.
Being involved in IPR sales would therefore counterbalance the platform dependencies that the creator would otherwise be subject to. Some YouTube -originated video producers such as the comedy group Justimus have in fact entered the IPR-based VOD licensing business, making them arguably that much less less dependent on platforms in terms of revenue.
To summarize, when broadcasters operated their early VOD-services at the start of the millennia, before the platforms took over the customers’ media usage habits, there was no platform dependence, as the services were only delivered and accessed on top of the open internet. Today VOD-providers are platform-dependent when it comes to the smartphone and smart TV app distribution of these services to end users and when promoting these services on social media platforms.
To regulate the use of this platform power, the EU has introduced new laws, the Digital Services Act and the Digital Markets Act.
Cunningham, S., & Craig, D. (2021). “Tech-Tonic” shifts: The U.S. and China Models of Online Screen Distribution. In P. McDonald, C. Donoghue, & T. Havens (Eds.), The US and China models of online screen distribution (pp. 145-165). NYU Press. https://doi.org/10.18574/nyu/9781479806812-010
Finnpanel 20.1.2022 TV Viewing in Finland 2021 https://www.finnpanel.fi/lataukset/tv_year_2022.pdf
McDonald, P. (Ed.). (2021). The Routledge Companion to Media Industries (1st ed.). Routledge. DOI 10.4324/9780429275340
Ministry of Transport and Communications 10.11.2022. Finland's reply on the complaint concerning YLE: Yle Areena and learning contents respond to changing consumer needs https://valtioneuvosto.fi/en/-/finland-s-reply-on-the-complaint-concerning-yle-yle-areena-and-learning-contents-respond-to-changing-consumer-needs
Nieborg, D. B., & Helmond, A. (2019). The political economy of Facebook’s platformization in the mobile ecosystem: Facebook Messenger as a platform instance. Media, Culture & Society, 41(2), 196–218. https://doi.org/10.1177/0163443718818384
Poell, T & Nieborg D.B. & van Dijck J (2019). Platformisation. Internet Policy Review, 8(4). DOI: 10.14763/2019.4.1425 https://policyreview.info/concepts/platformisation
Poell, T , Nieborg D.B., Duffy B. E. (2021). Platforms and Cultural Production. Polity. ISBN: 978-1-509-54052-5
Traficom 21.1.2022. Online streaming overtakes traditional TV viewing among Finns under the age of 45. https://www.traficom.fi/en/news/online-streaming-overtakes-traditional-tv-viewing-among-finns-under-age-45