Apple becomes a trillion dollar company, Google hit with EUR€4.3bn (US$5bn) EU fine, Facebook and Twitter experience historic losses - it's another month in media tech trends!
Apple became the world’s first trillion dollar public company at the end of July, as a rise in share price helped it beat Amazon to the long talked about benchmark. Shares in the 42 year old company hit US$207.05 on Thursday, marking a fourfold increase since Tim Cook replaced Jobs as chief executive in 2011. It means Apple’s stock market value is more than a third the size of the UK economy and larger than the economies of Turkey and Switzerland. One large area of growth has been in the company’s ‘Services’ division, which includes the App Store, Apple Pay and income from Apple Music. It just goes to show that while physical sales remain strong, there’s money to be made in digital media yet!
Facebook lost $120bn of market value in July, based on a terrible Q2 earnings report. It’s the biggest single day loss in US stock market history, and as TechCrunch reported at the time: “In two hours, Facebook lost more value than most startups and even public companies are ever worth.” The decline has been attributed to a number of factors. The shift towards stories and away from timelines has seen a lag in advertiser revenue moving in the same direction, which could see future bounceback as the market catches up with the technology. More worrying however is the downward user trend that Facebook is currently experiencing. The company saw its first ever decline in European user numbers in Q2 2018 – down 377 million to 376 million – while overall revenue growth is now decelerating around the world.
Meanwhile, Twitter experienced its worst single day percentage drop since 2014 after reporting declining monthly active users. While the company has recently been involved in severe account clean-up operations, this activity does not appear to have affected overall user figures, making the declining monthly active user figure and subsequent 20 per cent drop-off in shares look very troubling for the company indeed.
If the markets don’t end up clipping the wings of social media companies, then it looks like government intervention will. A new parliamentary report published by the Department for Digital, Culture, Media & Sport (DCMS) in the UK last week, recommended that a new category of tech company be introduced to properly define and regulate social media. The findings were delivered following an 18-month investigation by UK MPs into fake news, digital political campaigning, and Russian state-sponsored propaganda. The interim publication will make up a key part of the Government’s joint DCMS and Home Office White Paper on new cyber-laws, and also took into account the evidence and recommendations of government institutions around the world. Read more here.
While social tech giants were undergoing the scrutiny of UK Parliament in July, the search giant also incurred the wrath of European intervention as the EU slapped Alphabet with a historic €4.3bn fine regarding Android. The European Commission said that Google had breached EU antitrust rules relating to “illegal practices regarding Android mobile devices to strengthen dominance of Google's search engine.” What all of this adds up to is an extremely strong and tangible backlash against media tech giants from both markets and governments alike. This trend is now taking place around the world, and looks set to accelerate over the course of 2018 and beyond.
Closer to traditional media home, News UK title The Times reached the milestone of 500,000 subscribers, as reported by Digiday at the beginning of July. Digital-only subscriptions overtook print for the first time in the publication’s history: up 20 per cent from the previous year to 255,000. In the same month, also in the UK, Guardian Media Group revealed that overall digital revenues had now outstrip print for first time, as the company earned £108.6m (US$141m) from digital last year and £107.5m (US$139.91) from print and events.
It’s indicative of an industry in which the long talked about shift from print to digital is now being played out in real terms, and in a related article FIPP recently reported on the appointment of Troy Young as President of Hearst Magazines, having previously spent five years as the president of Hearst Digital Media. If government regulation and declining stockmarket figures are set to undermine the prominence of social media channels over the coming months and years, then there has never been a better time for quality media owners to realise their potential as the premium supplier of real digital news!
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