The Digital Duopoly

17 Jul,2017

 

By Indrani Sen

 

Internet advertising overtook television to become the world’s largest advertising medium in 2016. Zenith’s The Top Thirty Global Media Owners report 2017 (https://www.zenithusa.com/top-30-global-media-owners-2017/) shows that Google and Facebook not only held the first two ranks, but also accounted for 20% of global advertising revenue across all media in 2016.  Alphabet, the holding company of Google, emerged as the largest media owner in the world, three times the size of Facebook, the second-largest media owner. While Alphabet retained its leadership in the rankings, Facebook climbed from 5th position to 2nd position. Comcast, the largest traditional media owner, retained the third rank with US$12.9bn in ad revenue. Baidu, the Chinese equivalent of Google, moved from 14th rank in 2014 to 9th rank in 2015 to 4th rank in 2016.

 

Top Ten Global Media Companies

Rank

2016

2017

1

Alphabet (Google) Alphabet (Google)

2

The Walt Disney Company Facebook

3

Comcast Comcast

4

21st Century Fox Baidu

5

Facebook The Walt Disney Company

6

Bertelsmann 21st Century Fox

7

Viacom CBS Corporation

8

CBS Corporation iHeartMedia Inc

9

Baidu Microsoft

10

News Corp Bertelsmann

 

A comparison of the Top10 global media owners in 2015 and 2016 shows that apart from the first four mentioned earlier, The Walt Disney Company, 21st Century Fox, Bertelsmann and CBS Corporation were able to stay in the top ten, while Viacom and News Corp could not. iHeartMedia Inc and Microsoft were the two new entrants in the top ten in 2016. While iHeartMedia Inc moved up from 12th to 8th rank, Microsoft remarkably moved from 17th to 9th rank. The number of internet based media owners moved up to four from three in the top ten with Microsoft ranking 9th in 2016.

 

It is interesting to note that Google’s media revenue grew by 33% from US$59.62 billion in 2015 to US$79.4 billion in 2017, while Facebook’s media revenue grew by 134% from US$ 11.49 billion in 2015 to US$26.9 billion in 2016. ZenithOptimedia named Facebook as the main beneficiary of the transition to mobile in its earlier reports. In 2013 mobile advertising revenue of Facebook crossed its desktop advertising revenue. By 2015, mobile advertising revenue was more than 70% in Facebook’s total media revenue. If Facebook continues to grow at such exponential rate, then the gap between Google and it will become less in future.

 

Apart from Google and Facebook, there are five more pure-internet media owners in the top 30: Baidu, Microsoft, Yahoo, Verizon and Twitter, the last two being new entrants in 2016. The seven digital platforms generated US$132.8 billion in internet ad revenue in 2016, 24% of global advertising revenue across all media. In other words, these five media owners add only 4% to the 20% share enjoyed by Google and Facebook. Are we moving towards a digital duopoly in the global advertising market?

 

The dominance of the US continues in the global media market. Out of the Top 30 Global Media Owners, 20 are based in the US. China and Germany each have three media owners in the list (Baidu, Tencent and CCTV for China, and Bertelsmann, ProSiebenSat.1 and Axel Springer for Germany). One media owner each from the four countries completes the list: France (JCDecaux), Brazil (GrupoGlobo), Italy (Mediaset) and the UK (ITV).Soon after the Second World War,the policy makers in the US realised the role that media can play in making US a super power in the world economy. US media companies were actively encouraged to invest for extending their reach abroad. The US also has the biggestadvertising market, which has been boosting the domestic growth of the US media companies. Finally, Silicon Valley innovation has helped in the growth of internet media owners with Google and Facebook now ruling the roost globally.

 

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