Nieman Foundation at Harvard
HOME
          
LATEST STORY
Why won’t some people pay for news?
ABOUT                    SUBSCRIBE
Feb. 2, 2022, 2:28 p.m.

Australia’s latest export is bad media policy, and it’s spreading fast

The U.K. and Canada look ready to copy Australia’s idea to force Google and Facebook to give publishers money. But it’s a warped system that rewards the wrong things and lies about where the real value in news lies.

Australia has given the rest of the English-speaking world so much. Bee Gees! AC/DC! INXS! Some bands whose names don’t sound like you’re reading the alphabet out of order, presumably!

But when it comes to media policy, Australia’s cultural exports are becoming indistinguishable from pollution. For instance:

These are all, in this reporter’s opinion, terrible ideas. The first two, if sustained, would have a chilling effect on good journalism and make it far easier for bad actors to legally harass news organizations. (Seriously, imagine being able to sue a publisher for defamation over words they’ve never even seen before!) Let’s hope they never jump the rabbit-proof fence and infect other countries.

But the third one, unfortunately, has already gone viral and is spawning new variants across the Anglosphere.

ITEM: This story was in the U.K.’s Mail on Sunday on, well, Sunday:

Tech giants such as Google and Facebook will be required to pay newspapers and other media outlets for using their stories, under new laws being drawn up by the Government.

Under the plans, which are modelled on a system that has been introduced in Australia, the platforms will be encouraged to negotiate payment deals with news organisations. If the negotiations fail, an independent arbitrator would set a fair price.

The move, being driven by Culture Secretary Nadine Dorries, comes amid growing concerns that the tech companies are dominating online advertising, to the detriment of consumers and businesses…

The unit will also investigate the algorithms used by search engines such as Google, which many news organisations believe are manipulated to disproportionately direct search enquiries towards Left-leaning news organisations, and filter how people read and access news, to the detriment of quality, paid-for journalism.

(Always fun to see the corporate-welfare part and the right-wing-culture-war part snuggled up right next to one another.)

ITEM: This story appeared on the Canadian tech/business site The Logic Monday morning:

The federal government will soon introduce legislation that will let the country’s news publishers bargain collectively with Big Tech companies like Google and Meta, and will compel them into binding arbitration if they can’t come to an agreement on a price for news content published on the companies’ platforms, multiple sources told The Logic…

According to several stakeholder sources with whom I’ve spoken over the last week, some of whom asked they not be named in exchange for their candour, Heritage Minister Pablo Rodriguez will introduce the legislation as early as Feb. 3, a few days after Parliament wakes from its yuletide slumber. That will fulfill the task, laid out in Rodriguez’s mandate letter, of delivering a legislative solution to the news business’s longstanding gripe that Big Tech has used its content while starving it of ad revenue.

I expect New Zealand to fall by mid-afternoon Thursday, followed quickly by Jamaica, Malta, Belize, Pitcairn, Botswana, and everywhere else people speak English, or to which Her Majesty Elizabeth II, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland and of Her other Realms and Territories Queen, Head of the Commonwealth, Defender of the Faith, has ever sent a Christmas message.

I feel like I need a disclaimer whenever I write about this particular terrible Australian idea. I’m not usually the one opposing schemes for getting more money to news companies, and I’m not usually the one thinking Google and Facebook’s arguments are correct. And yet here we are.

The base problem here is that these governments are telling the tech giants that their use of their country’s publishers news content has a monetary value that is somehow different from all other content in existence. And that’s the important word here: use.

How does Google use news stories? It dumps all their contents into its giant search index, alongside everything else on the web, so that when someone types “that old fake slate story about fishing for monkeys,” they get a link to the article they meant.

How does Facebook use news stories? It lets people share links to them, on Facebook. If their algorithm thinks people will like reading it, they show those links to more people. If they don’t, they don’t.

You can have a million complaints about these companies — I do! — but at a fundamental level, the ways in which they “use” content are simply inherent to their natures as a search engine and a social platform. If Google and Facebook were zapped out of existence tomorrow, would people want to stop searching for things on the internet, or sharing content with other people? Of course not. Those behaviors would move elsewhere — Bing, Twitter, tilde.club, somewhere. The “use” of news articles would change domain names, but it wouldn’t change in its nature.

If anything, whatever replaced them would likely be more structurally hostile to publishers’ interests — just as every social platform that has followed Facebook and Twitter (Instagram, Snapchat, WhatsApp, TikTok) has been harder for publishers gain audience or revenue from.

The core issue is misdirection. Publishers complain about Google and Facebook’s use of their stories — but that’s not what they’re actually angry about. What they’re angry about is that Google and Facebook dominate the digital advertising business — just as they used to dominate the print advertising business. And those are two really different things!

It’s an understandable mixup. In the old days, news publishers made giant piles of money through the “use” of their articles. Specifically, those articles attracted a loyal audience, whose attention they could then rent out to advertisers. Today, Google and Facebook make giant piles of money by attracting a loyal audience, whose attention they then rent out to advertisers. “I see our stories on Google and Facebook all the time,” a publisher thinks. “It must still be our articles that are generating all the cash!”

Um, no, it’s not. Your content may be wonderful! But if it were all raptured away tomorrow, Google and Facebook’s Scrooge McDuck pools of gold would not be affected a single iota. Journalists don’t particularly like to hear it, but news stories make up only 2% to 3% of the average user’s News Feed on Facebook, and they are less engaging than friends-and-family content. People use Google to search for news, sure, but Google usually doesn’t put ads next to those search results. You know how advertisers try really hard to not put their ads next to news stories? Same principle applies.

I looked at The New York Times’ homepage Monday and then googled phrases that should have pointed me towards the top stories I saw there:

us russia ukraine
boris johnson lockdown
moderna vaccine approved fda
senegal plastic recycling
alberto salazar disgraced
spotify joe rogan covid
ahmaud arbery plea deal

There was not one single ad on any of the search results pages. Google made no money off of those searches.

But google “plumber near me,” “snow removal boston,” “iphone 13 sale,” or “mesothelioma lawyer” if you want to see where the cash comes in. If all the news disappeared from social platforms and search engines tomorrow, Google and Facebook would breathe a sigh of relief. For the platforms, news is much more trouble than it’s worth — a throbbing PR headache that’s hard to monetize.

Google and Facebook love to respond to pushes like Australia’s by pointing out how much traffic they send to publishers, which they can then monetize with ads. And they’re right — it is a lot of traffic. Right now, out of every 100 clicks that send internet users to publishers’ websites, Google sends about 64 of them. Facebook sends another 23. (Twitter sends 1.) That traffic is a good thing!

This is how the tech giants “use” news stories. If they think a news story would be useful to a user — because it’s the best match for their search query, or because several of their friends have shared it — they’ll direct the user there. Almost every time that happens, at least with hard news, the publisher is making the most money out of the exchange. It’s the same way Google and Facebook “use” every other site on the internet.

It’s also why I get cross with media reporters who let sloppy language seep into their stories — like that this is all about setting “a price for news content published on the companies’ platforms.” None of this content is being published on Google and Facebook unless the publishers have specifically asked it to be.1 It’s being linked to, in the same way everything else in the world is being linked to. And unless you think the very concept of a search engine or a social platform is immoral, linking to things is just a fundamental part of how these things work.

Bing “uses” news stories just like Google does. Twitter “uses” news stories just like Facebook does. But you don’t hear publishers complaining about their nefarious deeds, because Google and Facebook make so much more money — for reasons that have no connection to their “use” of news stories. They make all that money by (1) making products want to use a lot, (2) using all that time spent to gather a creepy amount of data on everyone, and then (3) creating cheap, easy, and effective ways for any advertiser to send very targeted ads to their users. Their products attract the most time → their algorithms hoover up the most data → their ad targeting is the most precise → they make the most money.

Which is why these Australia-style laws are so absurd. They hang on the idea that the reason publishers have lost so much revenue is some specific malfeasance in how Googbook “uses” news stories, and thus a publisher has a natural right to negotiate with Google and Facebook over the value generated by the “use” of their news content.

If this were an honest negotiation, here’s how it would go:

FADE IN:

INT. OFFICE MEETING ROOM ROOM – DAY

On opposite sides of a long table sit PUBLISHER — looking tired, jacket shiny at the elbows; steely, resolute, and frustrated, all at once — and PLATFORM, wearing nine pastel polo shirts, each collar popped at a slightly different angle, leaning back in an Aeron chair, boat shoes propped up on the table.

PUBLISHER

I’m gonna throw out a number: $10 million.

PLATFORM

Okay, cool cool cool. I’ll counter that with our best offer, which is zero.

PUBLISHER

You drive a hard bargain, but I am willing to meet you halfway: $5 million.

PLATFORM

Nice, nice. To honor your willingness, I am now able to DOUBLE my offer: zero dollars.

PUBLISHER

$1 million?

PLATFORM

Zero.

PUBLISHER

$50,000?

PLATFORM

Zero.

PUBLISHER

$200?

PLATFORM

I can have Darcy validate your parking? Have a great rest of your day.

Because the publisher derives a lot of value from Googbook, and because Googbook derives de minimus value from the publisher, there is nothing to “negotiate.” It’s not an attempt to quantify value — it’s an attempt to determine how much money will make a publisher walk out of the room happy enough not try to use its influence with the government (and the public) against the platform. All the talk of value is for show.

Forgive me a metaphor.

Imagine two neighbors: Sam, who’s gotten stinking rich on some investments, and Dave, who has sadly lost what was once a sizable fortune.

If, as a society, you want to reduce the gap between them, you’d normally do that through government taxation and spending. The rich guy, Sam, pays a higher tax rate than the poor guy, Dave; some of that extra tax revenue funds a variety of programs aimed at helping out Dave. Reasonable enough, right?

The Australian model would be: The reason Dave is down on his luck must be Sam’s “use” of the sidewalk in front of their houses. His shoes make a weird sound on it, and that’s why Dave’s in financial trouble. Dave has a right to sit down with the rich guy in a room to “negotiate” over how much money Sam is gonna have to give him for this unspecified “use.” (Sam’s not sure what the problem is; he walks on that sidewalk the same way he walks on all the sidewalks, and they’re just normal shoes.) The government will force Sam do it — if Dave doesn’t like what Sam is offering, at any point he can head down to the station and tell the police chief Sam’s being unreasonable. At which point the chief will look at the two sides and pick whichever one he likes best — which is how much money Sam is then required by law to hand over (though the actual amount is kept a secret).

In both of these versions, Dave gets more money and Sam gets less. Which seems like a perfectly reasonable outcome! But it isn’t an actual negotiation aimed at measuring the value of Sam’s sidewalk strolls. It’s a shakedown. And how much money Dave gets doesn’t have anything to do with what a civic-minded citizen he is, or how real his needs are, or how legitimate his sidewalk complaints are — it’s about how much power he has to force a deal. Turns out Dave is pretty good buddies with the police chief! They’re in a bowling league, every Monday night. Dave knows this, and Sam knows this, and it warps the negotiation.

Which is why News Corp and Nine — Australia’s giant chains which together own 90% of the country’s newspapers and big chunks of its TV networks — both got big checks. They’re big and powerful — one of them pretty much got the police chief his job — so Google and Facebook felt they needed a little more bribing. Nine is expected to get more than $30 million per year from Googbook. Murdoch’s getting somewhere in the neighborhood of $50 million a year. Meanwhile, the small fry in Australia media are getting bupkis.

Look at some of the things publishers have said about these negotiations to Press Gazette’s William Turvill, who’s done the best reporting on this:

“[Google and Facebook] don’t explain the figures,” said one senior source at a large international publisher that rejected its offer. “They just say: ‘Here is a figure.’”

“They make it up as they go along,” said the boss of a British local news publishing company that did sign up to be a Showcase partner. “They pay you whatever they think they can get away with. There is no proportionality, and that is going to lead to a great deal of unhappiness.”

“The Morrison government initiative has served the larger news outlets well,” says Richard Bakker, the publisher of Q News. “Smaller independent public interest publishers have been largely forgotten.”

Major [U.S.] metropolitan news brands are being offered as little as $200,000 a year to partner with Google — sources we spoke to said the payments should be five, ten or 20 times the size.

It should be 20× bigger! Does that sound like an honest negotiation over value, or like two sides picking numbers out of the air and figuring how much they can squeeze out or get away with?

All of these deals with Google and Facebook are allegedly about licensing publishers’ stories for Google News Showcase and Facebook’s News Tab, despite the fact that no one uses either of those products and they are literally designed to lose money for Google and Facebook. From Turvill again:

Sources at three [Google News] Showcase partner publishers, covering the UK and Australia, reported receiving minimal traffic from the aggregation site. One spoke of “dribbles of traffic” and another revealed they had received fewer than 100 clicks over the course of a month.

The third source said their company, which viewed Showcase as a genuine opportunity for growth, had experienced “very frustrating bugs” behind the scenes. “We’re getting the sense that Google feels like: ‘Well, we’re paying you, so what do you care?’”

While these payments are allegedly for these fringe side projects, the tech giants know what they’re really buying: a little silence from publishers.

Each Showcase contract comes with a strict confidentiality clause attached. If breached, publishers risk losing millions of dollars and damaging relations with the most important company in the media world. The result? “Nobody knows how much anybody else is being paid,” says one executive at a major international media company.

Earlier this year, [publisher DMGT] launched an anti-monopoly US lawsuit against Google. One source said that Google’s News Showcase contracts contain clauses that would prohibit DMGT from pursuing such a lawsuit.

[U.S. publishers] are concerned by a contract clause stating that they agree Google does not owe them any money for their content beyond Showcase payments.

It’s not “How much money is your content worth to us?” It’s “How much do we need to give you to shut up?”

The good thing is there’s a better way. Remember Sam and Dave? You can skip all that sidewalk business and the trip to police station by just taking the other route: fiscal policy.

Google and Facebook are too big and powerful for the good of society. Their business, highly targeted advertising, is one that naturally tends toward monopolies: the more data you have, the bigger you get; the bigger you get, the more data you have. And while they make some fine and useful products, they aren’t creating the civic good that the earlier advertising gods — newspapers and other local news organizations — did by doing good journalism on a huge scale.

So tax them. Say you’re going to put a 1.5% tax on the targeted digital advertising revenue of all companies with a market cap over $1 trillion, or annual revenues over $20 billion, or whatever cutoff you want. That would generate billions of dollars a year in a way that doesn’t warp competition or let Google and Facebook use their cash as a tool for targeted PR payoffs.

Then decide how to spend it. Maybe you subsidize reporter salaries in a big way, the way the Build Back Better bill proposed. Maybe you give it all to public media and build an American BBC. Maybe you distribute it as vouchers to Americans so each of them can spend $100 a year on news subscriptions at no cost to them.

There are lots of ideas! Some you might like, some you might not. But they’re all better than giving Rupert Murdoch $50 million a year and small local publishers zilch because of who they know and how much the tech giants value their silence.

  1. Through something like Facebook Instant Articles or, if you squint at it long enough, Google AMP. ↩︎
POSTED     Feb. 2, 2022, 2:28 p.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 60,000 who get the freshest future-of-journalism news in our daily email.
Why won’t some people pay for news?
Plus: The role of class in news avoidance, how local party leaders use partisan media, and what native advertising studios say to sell their work.
How corporate takeovers are fundamentally changing podcasting
“One of the recent shifts in podcasting has been the introduction of paywalls and exclusive content. It has since become a standard feature of the medium.”
Facebook promised to remove “sensitive” ads. Here’s what it left behind.
Facebook pledged to remove race, health conditions, and political affiliation from ad-targeting options, but The Markup found advertisers can still easily target the same people.