Data Monopoly by Media Companies - Is It Better After All?

Media companies are becoming more and more dependent on advertising revenue. On the other hand, this business is all about performance (tech) and data. Should media companies in one region put their user data together and invest on a common tech platform to be able to compete with giants like Facebook and Google on their market share for advertising? This is the question I am being asked frequently these days ....

There is not an easy answer to this question ....

What I observed so far, smaller local media companies are less disrupted. Practices in the media industry, especially the cable conglomerates and "monopolization" of the local markets, show that monopoly takes away the decision-making from the local media organization. Moreover, smaller more localized media firms function as the voice of the community because they are familiar with the background of the community. When a large national conglomerate takes over a local media firm, they take away the community’s "local media."

In general, "diversity" and "localism" are desirable in the sense that "control over information must be geographically as well as structurally diverse." https://www3.niu.edu/acad/powers/MediaConglom02.htm 

The other important issue is how this "profit seeking" move will be perceived from audience/users point of view. User privacy is still a big issue when it comes to building data platforms, realtime behavioral data gathering and development of data-driven solutions and products such as personalization. These are the similar underlying building blocks for advertising (targeting and DMPs).

If media companies joins to a monopoly for advertising, i.e., their main source of revenue in near future, then what would encourage them for competition on user attention? 

Another argument is that "network effects and advantages of scale do not in themselves amount to barrier to entry," according to the Economist article, https://www.economist.com/node/21635077/print. In other words, it might be good enough that media companies recognize the disruption and take actions by getting hold of their data and building the technology for advertising in-house. Whatever barriers Google may enjoy, they are clearly not sufficient to put off all comers.

There are many concerns here. Even if this monopoly be achieved easily, how easy would it be to keep it? How the revenue should be shared between media companies based on the data they put together? What about data governance? 

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