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| DATE | 2023-12-10 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [Hangout - NYLXS] News, the DMCA,
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https://jacklimpert.com/2023/12/news-publishers-are-fighting-big-tech-over-peanuts-they-could-be-owed-billions/
News Publishers Are Fighting Big Tech Over Peanuts—They Could Be Owed
Billions - About Editing and Writing
Jack Limpert
7–9 minutes
From a New York Times guest essay by Julia Angwin headlined “News
Publishers Are Fighting Big Tech Over Peanuts. They Could Be Owed
Billions.”:
A bitter battle is taking place between Big Tech and the free press over
how to share in the income that news content generates for technology
giants. The future of our news ecosystem, a linchpin of democracy,
depends on the outcome.
Last week, after months of hardball negotiations, Google and the
Canadian government agreed on a deal that would require the company to
pay Canadian news outlets about $73.5 million a year. Canadians are no
longer facing the threat that Google would remove all news content from
its search results.
The settlement is far less than Canada wanted — it had sought $126
million — and a small fraction of the estimated $550 million that news
publishers deserve from Google. The lesson here is clear: As much as
publishers may be suffering right now, they must continue to stand firm
against the bullying tactics of Big Tech.
These platforms gained their audience in part by sharing news content
free. Now they are using their market power to force the press to
continue to do business on their terms.
Canada is a test case for the world. In June its government passed a law
that will force tech companies to pay for the news content featured on
their platforms. In August, Meta, the owner of Facebook, responded by
blocking Canadians from seeing or sharing any news items on Instagram
and Facebook. Meta argues that it has generated significant revenue for
publishers.
The ongoing Meta blockade is already damaging Canadian publishers,
particularly smaller ones. Chuck Lapointe, the chief executive of
Narcity Media, which operates websites designed for Gen Z and
millennials, wrote that his properties had suffered a 30 percent decline
in traffic and a 15 percent decline in revenue since the blockade began,
forcing him to lay off over 16 employees. The Meta blockade “is killing
us,” wrote Gabriel Ramirez, a journalist and co-founder of The Bridge
Canada, a news outlet for Latin American immigrants.
Canadian publishers were even more terrified of a Google boycott because
Google drives even more traffic to news. A few months before the law was
passed, the company ran a weekslong test that removed Canadian news
outlets from its results, in what it described as a “potential product
response” to the law.
It was like saying, “Nice restaurant you have here; it would be a shame
if it had a fire,” said David Beers, the editor in chief of a nonprofit
regional news site in British Columbia, The Tyee, which gets about
one-third of its traffic from Google.
The Canada-Google deal sets an important precedent: It prevents Google
from influencing which media businesses survive and fail.
In the past few years, after enduring withering criticism for profiting
by purloining news content, Google and Meta began cutting private deals
with individual news outlets across the globe (including The New York
Times). Google says it has committed $1 billion to journalism and has
cut deals with news outlets in more than 22 countries since 2020.
Critics say that without government intervention, the deals tech
companies strike allow them to determine which news outlets survive and
could allow them to financially starve those that are critical of their
business or political interests.
“The internet is supposed to be a level playing field. Instead these
platforms are picking winners,” said David Skok, the founder and chief
executive of The Logic, a business and tech news publication. He said
that his publication was one of only two Canadian national nonbroadcast
news publications that had not already signed a deal with Google or Meta
before the legislation’s passage.
Two years ago, Australia became the first country to push for a level
playing field, enacting a bargaining code that required Google and Meta
to negotiate payments to news publishers. Facebook shut off access to
news content in Australia for about a week but ultimately complied.
The Australian code proved to be a boon to the news industry there,
prompting the hiring of more than 100 reporters and generating more than
$130 million in annual payments to Australian news outlets large and
small, according to Rod Sims, a former chairman of the Australian
Competition and Consumer Commission.
When other countries initiated similar efforts, however, Google and Meta
started pushing back more aggressively. When Brazil considered a similar
law last year, Google posted ads on its popular search page stating that
the law would “force Google to fund fake news.” The bill was withdrawn.
South Africa and California are facing similar pushback.
Canada’s draft regulations required Meta and Google to each pay news
outlets a minimum of 4 percent of their annual revenue in Canada. For
Google, that would have amounted to about $126 million, according to
government estimates.
Google argues that fewer than 2 percent of search queries in Canada are
seeking news. “Simply put, the 4 percent appears to be an arbitrary
figure that overstates the commercial value of news-related links,”
Google wrote in its public comments on the law. The government appears
to have agreed to Google’s terms in agreeing to cut the minimum payment
by nearly half.
But a new working paper concluded that Google and Meta are vastly
undercounting the value of news to their platforms. The study, by
researchers from Columbia University, the University of Houston and the
Brattle Group consulting firm, estimated that about 35 percent of
searches on Google were “seeking news media content.”
“News is to Google what sports is to cable,” said one of the study’s
authors, Haaris Mateen, an assistant professor of finance at the
University of Houston. “Without it, the product loses most of its
value.”
The study estimated that Google owes U.S. publishers 50 percent of the
value created by news, which it estimated at $10 billion to $12 billion
in revenue sharing annually. The study found that Facebook, whose users
spend less time seeking news — about 13 percent of their time — owes
$1.9 billion to U.S. news publishers.
The researchers’ numbers were based on surveys of user behavior on the
platforms, which do not publicly share user behavior. But even if the
survey estimates are not perfectly accurate, they illustrate how
publishers are fighting Big Tech over peanuts — hundreds of millions of
dollars — when they could well be owed billions. That’s why Google
fought so hard in Canada: It succeeded in setting the bar extremely low
for global payments for news. Dr. Mateen estimated that Google owes $550
million to Canadian publishers. “The amount the Canadian publishers will
get under the agreement with Google is tiny compared to what they should
be getting,” he said.
But it’s a start. Now other governments need to follow suit with similar
efforts. The struggle is painful. But Big Tech needs to start paying up
and paying fairly.
Julia Angwin is a contributing Opinion writer who writes about tech
policy.
--
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