How Net Neutrality May Affect Pharma Marketing

With the recent news about the FCC’s decision to repeal Net Neutrality laws dominating the headlines, many are left wondering how this will impact marketing efforts. Today, knowing very little on what Internet providers will change related to how they provide and charge for their services, it is difficult to predict exactly how it will affect pharmaceutical brands. The best predictions suggest things will essentially be status quo, as evidenced by the fact that Net Neutrality laws weren’t in place until 2015, and we did not see the dire issues that many have been discussing.

We’re seeing a big push towards integration between content and distribution companies (AT&T + Time Warner, Comcast + NBC Universal, Disney + 20th Century Fox, Verizon + Yahoo, etc.). These shifts happening against the backdrop of the repeal of Net Neutrality leaves open the possibility for these companies to use their relative position of power to suppress the free expression of content that we enjoy today.

While the worst predictions include a future where ISPs could charge consumers for access to individual sites, we believe this will be a remote possibility. A move like this will not only create such customer aversion, it will invite intense regulatory scrutiny. Along these lines, while Net Neutrality is being repealed, the government is suing to block the merger of AT&T and Time Warner. The recently announced Disney + 20th Century Fox deal will be another deal to watch.

The likely scenario will probably fall somewhere between these two extremes of status quo and a cable-like subscription model for access to the Internet.

From a marketing and media perspective, it will be critical to watch the consolidation of content and distribution into the hands of fewer companies, and the strategies those companies implement. The repeal of Net Neutrality technically makes it possible for these newly integrated companies to favor their own content delivered over their own infrastructure. They might also be able to extract rents from other distributors if their content is in high enough demand. This is contributing to why we’re seeing a virtual arms race for the procurement of quality content.

If key media owners fall into the hands of these integrated companies, we might see changes in the way in which their content is consumed, by whom, and the prices their media programs go for. All of this will take time to materialize. In the meantime we will be watching closely as these rules take effect and consolidation in the media industry continues.

We at CMI/Compas will be closely monitoring this and will keep our clients and partners posted on anything that affects their business. If you have questions, please contact your CMI/Compas representative.