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Instagram to crack down on ‘hidden advertising’ in UK | Technology

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Facebook-owned Instagram is to crackdown on social media influencers and celebrities who make posts without telling followers when they have been paid to do so, following an investigation by the Competition and Markets Authority.

The CMA said it has been investigating the issue of “hidden advertising” by social media influencers and has been concerned that Instagram has not been doing enough to tackle the problem.

Social media influencers can make considerable income by charging fees to companies to promote products with posts that can be seen by thousands of followers of their Instagram profiles.

Facebook Ireland, which operates Instagram in the UK, has committed to a package of measures including prompting users to clearly disclose if a post has been paid for, and use technology and algorithms to spot posts where this has not been done. Clear labelling of incentivised posts is required under UK consumer protection law, so that people are not misled.

“For too long, major platforms have shied away from taking responsibility for hidden advertising on their site,” said Andrea Coscelli, the chief executive of the CMA. “So this commitment to tackle hidden adverts and overhaul the way people post on Instagram – making it difficult for users to ignore the law – is a welcome step forward. These changes mean there will be no excuse for businesses to overlook how their brands are being advertised either, making life a lot harder for those who are not upfront and honest with their followers.”

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Instagram will now make regular reports on its progress in tackling the problem to the CMA, which said the commitments apply to all Instagram users in the UK as well as anyone globally who directs their posts towards UK users. The CMA said it has not made a finding on whether Instagram’s practices have breached consumer protection law.

“We’re pleased to be working with the CMA on our continued efforts to help people be transparent about when they are paid to post content on Instagram,” a spokesperson for Facebook said. “We are also proud to be launching a programme with Media Smart to help educate young people about branded content and how to identify it.”

Last year the CMA secured formal commitments from 16 celebrities, including Alexa Chung and Ellie Goulding, to clearly state if they have been paid or received any gifts or loans of products when making posts on Instagram.


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Congress fails to pass Big Tech legislation ahead of election

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Why Netflix will keep raising prices with confidence

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CEO Of Netflix, Reed Hastings, attends the red carpet during the Netflix presentation party at the Invernadero del Palacio de Cristal de la Arganzuela on April 4, 2019 in Madrid, Spain.

Juan Naharro Gimenez | Getty Images

Netflix announced Thursday it will raise prices for U.S. customers.

Don’t be surprised if you’re reading the same story next year, and the year after that, and the year after that.

The company’s decision to raise its standard plan by $1 per month, from $12.99 to $13.99, and its premium plan by $2 per month, from $15.99 to $17.99, is an essential part of Netflix’s long-term strategy. It’s why Netflix has a market valuation of $218 billion on just $2.8 billion of net income in the last 12 months.

Netflix’s last price increase was January 2019. The video streamer has largely been able to avoid significant price hikes because it has consistently added subscribers, giving investors a clear growth story. But Wall Street is counting on consistent price increases as customer growth wanes. By that time, investors hope Netflix is an inexpungible staple in people’s homes, much like cable TV has been for the last four decades.

Early evidence suggests Netflix is on the right track. Monthly churn for Netflix (near 2%) is far below that of other streaming services, such as CBS All Access (soon to be renamed Paramount+) and Starz, according to data from Antenna, a measurement and analytics company that tracks purchase behavior.

The key to increasing prices without significant spikes in cancellations or dissatisfaction is to convince customers they’re still getting a superb value. The genius of Netflix over the past two or three years has been a subtle shift away from trying to be HBO and toward being a replacement for the entire cable bundle.

Replacing cable, not HBO

“The goal is to become HBO faster than HBO can become us,” Netflix co-CEO Ted Sarandos said in a GQ interview in 2013.

But that’s not actually what Netflix has done. Netflix has focused on a wide breadth of offerings, including animated kids’ shows, breezy romantic comedies, Adam Sandler movies, reality shows like “Love is Blind,” lowbrow documentaries like “Tiger King,” food shows like “The Great British Bakeoff,” and fun game shows like “The Floor is Lava.” It’s hard to imagine any of these series on HBO. And, sure, it’s got HBO-style fare too — movies like “Roma,” series like “The Crown,” and “Sex and the City” knockoffs like “Emily in Paris.” The full suite is similar to a cable bundle.

Ironically, HBO didn’t want to become Netflix until quite recently, despite Sarandos’s claim otherwise. While HBO made the decision to go direct to consumers as an a la carte application in 2015, HBO chief Richard Plepler focused on premium programming while actively shunning most other content. Only recently, after AT&T‘s takeover of Time Warner (and a new slate of executives), has HBO tried to emulate Netflix with HBO Max.

Netflix’s decision to become the cable bundle lite — excluding live events, news and sports — gives the company an excellent argument to raise rates from a price-value perspective. Netflix’s premium service is now $17.99 a month. The average cable TV bill is about $100 a month, according to LightShed Partners. While there are cheaper digital alternatives, YouTube TV is $64.99 a month. AT&T Now (formerly DirecTV Now) is either $55 or $80 per month. Even Sling TV is $30/month.

Meanwhile, the cable bundle quality is likely to decline in the coming years as most premium content gets pushed to streaming services. This should embolden Netflix to keep raising pricing, as it won’t just be the leader among streaming services (thus justifying it as the most expensive offering), but also an increasingly appealing alternative to cable.

WATCH: Netflix shares move higher after company announces subscription price hike



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Apple, Amazon and Facebook warn about pandemic, civil unrest

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Tim Martin | Getty Images

Tech companies had more to report Thursday night than the billions in profits they generated last quarter.

They also painted a dire picture of the world as we head into the winter months with Covid-19 cases spiking across the U.S. and Europe, and the potential for a heavily contested presidential election.

To recap:

Amazon will spend $4 billion on Covid-related expenses this quarter. That’s the same investment it made at the beginning of the pandemic as the country locked down and turned to online shopping instead. Amazon will spend the money testing employees for the virus, cleaning facilities, and making other changes it needs to keep things running in the world of Covid. Amazon is on pace to spend $11 billion for the year just to fight Covid-19.

The company also said it couldn’t accurately predict its operating income for this quarter due to uncertainty caused by the pandemic. Amazon gave extremely wide guidance, predicting between $1 billion and $4.5 billion. Who knows where it’ll actually land.

Apple CEO Tim Cook said that the spike in Covid-19 cases makes it hard for the company to provide sales guidance for this quarter. “If you look at the case count, the case counts are climbing in Western Europe,” Cook told told CNBC’s Josh Lipton on Thursday. “They’re climbing in the United States. And so there’s still a sufficient level of uncertainty out there… we don’t believe that’s an environment to guide into.”

With lockdowns restarting in countries like France and Germany, there’s increasing doubt that people will even be able to buy the hottest gadget in the world in the coming months.

Facebook CEO Mark Zuckerberg warned of civil unrest following Election Day next week. Facebook‘s core business isn’t about shipping and building things, so Zuckerberg’s Q4 warning was different than his peers’, but it was equally as dire.

“I’m worried that with our nation so divided and election results potentially taking days or weeks to be finalized, there is a risk of civil unrest across the country,” Zuckerberg said on Facebook’s earnings call Thursday night. “Given this, companies like ours need to go well beyond what we’ve done before.”

He also warned of an “increased risk of violence and unrest.”

These warnings are coming from some of the savviest business leaders in the world, with reams of data about the state of their businesses, and decades of experience managing crises. They have trillions of dollars in market value on the line. They’re sounding the alarm now to their investors, demonstrating that they’re willing to pour in the resources necessary to keep moving even if the rest of the world crumbles.

These companies have the money to weather the storm. They’ll be fine. They can spend billions adjusting their shipping networks (Amazon), reshaping their retail and manufacturing operations (Apple) and tweaking their algorithms to suppress calls to violence and unrest (Facebook).

It’s not the same for the rest of the country. Small businesses like restaurants and retail stores are struggling under pandemic restrictions with no stimulus bill in sight, while both political parties and their most ardent supporters are focusing on winning the election. While Big Tech companies go into panic mode, the U.S. government had decided to stall until after the election to decide whether or not to provide aid.

If you want to see a clear example of a K-shaped recovery in the economy, look no further than Big Tech companies. They win, while the millions of people reliant on small businesses for their livelihoods lose.


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