How do Platforms Matter?

Terry Flew and Cameron McTernan

The paper ‘How do platforms matter? Media power, platform power and the digital domination of Australian media’, co-authored by Terry Flew (University of Sydney) and Cameron McTernan (Adelaide University) has now been published by International Communications Gazette. The paper is part of a special issue ‘Networks of Power: Media and Internet Concentration, Platform Capitalism, and the Future of Democracy’, edited by Dwayne Winseck (Carleton University). The special issue is part of the Global Media and Internet Concentration Project (GMICP), funded through the Canadian Social Sciences and Humanities Research Council.

In the paper, we wanted to move from the question of whether digital platform companies such as Google, Meta etc. are powerful, to the question of how they are powerful. Drawing upon empirical data gathered through the GMICP and informed by the concept of the network media economy, the paper examines how digital platforms have come to embody a new form of media power, reshaping the Australian media economy and challenging traditional understandings of media influence. While legacy media power was grounded in content ownership and political influence, platform power today stems from infrastructural dominance, algorithmic control, and the commodification of user data.

This requires some reconceptualization of critical political economy and how we think about media power. For decades, we have seen the story of Australian media told through the lens of moguls—individuals such as Rupert Murdoch and Silvio Berlusconi who reshaped economies and cultures through their control of mass media. We now have a new kind of mogul—think of Elon Musk, Jeff Bezos or Mark Zuckerberg—but their power is constituted in different ways.  We sought to put flesh on the bones of the concept of “platform power” that challenges traditional understandings of media influence and dominates the Australian media economy.

We identified three key pillars of this new power:

• Infrastructural Dominance: Platforms profit from control over the underlying digital infrastructure through which all other content is accessed.
• Algorithmic Control: These companies manage and curate the algorithms that connect content to consumers, moving away from the idea of “neutral” intermediaries.
• Data Commodification: We highlight how the collection and use of user data allow these firms to refine products and dominate the advertising market.

Using the framework of the network media economy developed through the GMICP, we were able to think holistically about the interconnected nature of telecommunications, traditional media, and core internet applications. Using the Herfindahl-Hirschman Index (HHI)—where a score over 2000 is considered highly concentrated—we found the following for 2022:

We note that Alphabet (Google) is now the second-largest company in this ecosystem in Australia, followed by Meta at eighth. Both have surpassed traditional giants like News Corp Australia and Nine Entertainment in terms of overall economic scale.

The engine of this dominance is the rapid rise of digital advertising. We observed that internet advertising in Australia grew from $4.1 billion in 2012 to $14.7 billion by 2022. Remarkably, digital advertising revenue is now larger than the revenues of television, streaming, print, and radio combined. We found that Alphabet and Meta alone accounted for two-thirds of all digital advertising revenue in Australia. This has created what we call a “frenemy” relationship: traditional media companies must use these platforms to distribute their content, even as those same platforms strip away the advertising revenue needed to fund professional journalism.

The 2024 US Presidential Election and its aftermath have served as a watershed moment for platform power. Elon Musk’s whose $200 million investment in political campaigning in support of the Trump Presidency and use of the X platform to broadcast specific viewpoints mirrored the tactics of 20th-century media moguls, but was even more effective, netting $58 billion in share market valuation for Musk’s companies Tesla and SpaceX within three months of Trump coming to office.

We concluded that it is essential to reframe media power to encompass both traditional and emerging forms of dominance. We suggest three primary guardrails for news and information in an era of digital platform power:

1. Investment in News Sustainability: We argue that continuing to invest in professional news production is the most effective defense against misinformation.
2. Regulatory Intervention: We support initiatives like news media bargaining codes that address the power imbalance between publishers and platforms.
3. Normative Public Policy: We believe that concepts like the public sphere should provide the principles that inform how we regulate digital platforms today.

Ultimately, we find that while the mechanisms of power have changed, the fundamental challenges of media concentration and political influence remain as urgent as ever.