Yes, Big Tech should pay more for news

Should Big Tech pay for journalism? With the news industry becoming more insolvent every day, the debate is becoming urgent. It presen...


Google News search laptop screen

Should Big Tech pay for journalism? With the news industry becoming more insolvent every day, the debate is becoming urgent. It presents a laissez-faire argument proposing that punishing successful disruptors for media failures is unfair. But society would be well advised to look at the bigger picture.

The economy is clear. Last year, the newspaper industry reported only less than $10 billion in advertising about half of which were digital; the digital portion is expected to rise slightly while print ads slump.

Google, on the other hand, introduced more 200 billion dollars digital ad revenue. Google and Facebook together account for nearly three-quarters of total digital advertising, double their share from five years ago. If Twitter matures, that will also be a factor, as it certainly has the highest proportion of news content appearing on its product. LinkedIn can also be considered.

For now, Google, with its virtual monopoly in an incredibly profitable niche, is probably the main problem. Unlike social media, where news content is posted by users or by the news platforms themselves, Google deploys news content directly and actively to the products around which it advertises – in search results. and in its news aggregation pages.

It has been argued (with considerable success in court) that displaying only titles, photos and some text is fair use. He struck various deals with publishers — I remember the nerves frayed at AP every time Google negotiations ended — but his frugality was impressive. The narrative was that the value provided by links to publishers’ pages outweighs any ad diversion.

There have been a number of clashes around the world.

In Germany, leading publisher Axel Springer briefly rebelled but backed down when he found that losing referrals was hurting site traffic to a frightening degree (which itself would drive advertising revenue down); which tended to support Google’s logic. In Spain, Google News gone for seven years rather than approaching what locals considered reasonable terms. But Australia turned out differently: the country tried to impose higher payments than the technicians wanted, and after a brief period of no news on Facebook, it was Big Tech that backed down and accepted a fee. higher – around $150 million a year now – guaranteed by law.

There is now talk in America of helping publishers through similar legislation: Sen. Amy Klobucharrecently proposed bill, the Journalism Competition and Preservation Act.

I am not advocating for any particular bill. And it’s true that Google and other tech companies have negotiated best deals during the last years. But the news media aren’t getting their money’s worth from the huge added value they offer to these platforms – and putting pressure on them is the right thing to do.

Big tech would be wise to take the lead and propose the creation of a dedicated media fund to provide some level of fair distribution to outlets whose content is featured on their platforms. It would temper outrage at the current inequitable situation and earn them Main Street points in Congress. Some would argue that this gives technology undue control, but of course the legislative threat will remain and the new situation could be governed by a lawyer with many voices represented.

The argument against this is basically based on the idea that tech giants are brilliant and that the news industry is run by idiots who haven’t figured things out in the digital space. Technology hasn’t stolen the advertising pie from the news media, and the news media are acting outrageously entitled to think they were entitled to those revenues anyway. Instead, the argument goes, digital disruptors have created better ways to target customers and report results and have therefore improved and even corrected an advertising paradigm that wallowed in guesswork and therefore prone to inefficiency and waste.

In a Politico article, Jack Shafer even predicted, without proof, that any intervention would be be a forerunner of direct government grants (as if it would be, in any form whatsoever, the end of the world).

There is evidence in the literalist approach. It’s hard to prove that someone read a print ad or saw a billboard, but clicks can be accurately measured (views, by the way, much less). Thus, Disruptors have delivered great value and indeed increased the overall pie with their exciting new inventory in video games and the like.

What is wrong is that there is no injustice already at play. Big Tech indeed has a huge advantage that creates an unbalanced negotiation situation.

Advertising works best on a large scale. Technology platforms have such reach because their products are by definition global and independent of culture, language, geography and politics.

They thus benefit from the network effect. That means people go to Facebook because lots of others are there — a motivational dynamic that doesn’t exist in the same way for content sites. Facebook can connect everyone in the world and let everyone consume the news (or any content) they want.

It is a natural result of the Internet and its ability to connect all the peoples of the world in real time. Social media sites have become catch-all destinations.

There is no way this can be achieved by a content site. Its audience will always be much smaller because it is not a platform but a set of content, and the ability to engage audiences in that content attaches to niches of geography, subject , style, language and quality. The news industry can’t just come together and put everything on one site – Norwegian sports, Japanese affairs, Egyptian sports and American politics. It wouldn’t be a very cohesive undertaking.

This scale gave Big Tech an incredible negotiating advantage, which it continued to exploit with a taste dangerous to society and inviting intervention. They traded pennies on the dollar as if their lives depended on it.

Not unrelated to this, the news industry is in terrible contraction and in many ways is simply going bankrupt, with whole swaths of it disappearing.

About half American daily newspapers are already controlled by investment groups, most of them with an imperative of profitability and without worrying about the public’s confidence in the information. About 1,800 American newspapers closed in less than two decades, leaving many places with little or no local news. Most Americans now say they get information on social networkswhich can be an area of ​​extremism and nonsense – and which tends to reinforce readers’ existing viewpoints instead of challenging them with new information presented fairly.

Purists will say that change and disruption are always essential and let go of outdated industry. But this Darwinian imperative ignores the role of the news media as a public good.

It’s one thing that civilization gets rid of its typewriters and its travel agencies. It’s another to find yourself without what Carl Bernstein called “the best version of the truth obtainable”.


Dan Perry is Managing Partner of Thunder11 communication agency. He previously ran the Associated Press in the Middle East, Europe and Africa, worked with startups in Israel, and served as an executive in the ad tech industry.

This is an opinion piece. The opinions expressed in this article are the sole responsibility of the author.



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