Screenshot – City PM’s new weekly TMT column
This new weekly column brings you all the biggest stories and trends in technology, media and telecoms
This week:
** Media Moment of the Week: Piers Morgan makes a confession
** The OECD, Amazon and a terrible week for tech tax
** All streamed up: What’s next for Netflix?
Media Moment of the Week
“I am absolutely part of the problem when it comes to the culture wars in this country”
Piers Morgan indulges in a rare moment of self-reflection on BBC Radio 4’s Media Show
Tech tax troubles
Do you remember the halcyon days of 2019? It was a time when no one had ever heard the word coronavirus and it was still legal to go to the pub. In the tech world, the topic on everyone’s lips was looming new taxes. Much like the war — and Covid-19 — they said it would all be over by Christmas. But alas here we are, 18 months later, and it still rumbles on.
The OECD, which is leading the charge on a new global tech tax, has sheepishly admitted that there’ll be no deal in 2020 and warned a collapse in talks could cost the global economy $100bn every year. Add to this the revelation that Amazon will escape paying the UK’s digital services tax, and it makes for a pretty bad week for the promised shake-up.
The question now is whether these reforms will ever see the light of day. Of course, the delays are partly due to the pandemic. But diplomatic dithering and nationalistic grandstanding has made the entire process a mess from the outset.
While the OECD has valiantly trumpeted the benefits of a single taxation system, both France and the UK have forged ahead with their own levies. Meanwhile, Donald Trump has become increasingly irate about the impact on US firms.
The principle of ensuring that tech giants pay their fair share is, of course, a noble one. But the government’s decision to plough ahead with its own digital services tax has only served to undermine global negotiations and threaten trade talks with the US. Meanwhile Amazon — one of its prime targets — has simply fobbed off its increased tax liabilities on small retailers.
There’s a real risk now that tech tax plans become yet another victim of the pandemic. So if governments want to hold Big Tech to account, it’s high time they join forces and sign off on a global agreement.
All streamed up
Also causing a stir this week was Netflix, which has scrapped its 30-day free trial for new customers. It’s an intriguing move for the streaming giant, which last month announced that non-subscribers will be able to watch some of its series and films for free. It seems streaming’s golden boy has shifted to a new strategy.
Netflix has been riding a wave of success during the coronavirus pandemic, but this change of tack is an interesting sign of what’s to come. The streaming giant has now made its way into just under half of UK households (57 per cent in London), and so its growth prospects are starting to dwindle. Meanwhile, competitors such as Amazon Prime and Disney Plus are gaining ground.
Netflix has made no bones about its focus on original content. But more choice in the market means more customer churn, so as rivals pump billions into fresh programming the streamer appears to be hunkering down on its tent-pole hits. Maybe the streaming wars are just getting going…
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