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A new study argues that Google and Facebook should be paying billions for news

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On November 14, 2023

In Local News

Photo (cc) 2013 by Robbie Shade

A new study argues that Google and Facebook should be paying U.S. news publishers between $11.9 billion and $13.9 billion a year for the use of their journalism. Of that total, Facebook owes $1.9 billion and Google between $10 billion and $12 billion. That’s a lot of money. By way of comparison, the recently announced Press Forward philanthropic initiative seeks to raise $500 million to support nonprofit local news over the next five years.

An overview of the study, conducted by researchers at the University of Houston, Columbia University and the Brattle Group, an international consulting firm, was published Monday in The Conversation. “Digital platforms benefit from having varied, credible and timely news content provided by publishers,” write two of the four reseachers, Anya Schiffrin and Haaris Mateen. “This enhances user engagement and makes their platform more attractive to advertisers. News publishers benefit by finding an avenue through which they can distribute their content, thereby reaching more readers.”

The study itself, which is based on “game theoretical insights into cooperative bargaining in cases where value is jointly created,” argues that the platforms and news publishers should split the revenue generated by that mutually beneficial relationship on a 50-50 basis rather than allowing the platforms to keep virtually all of it, as is now the case. “We document that Google and Facebook are making payments to publishers around the world that are vastly below our estimates of a ‘fair payment,’” they write.

The study looks at an Australian law passed several years ago that mandated such revenue sharing. The authors also note that the Journalism Competition and Preservation Act, whose principal sponsor is U.S. Sen. Amy Klobuchar, D-Minn., would establish similar payments by forcing the giant platforms to negotiate with publishers for a share of their revenue.

Ben Smith, writing in Semafor, observes that attempts to extract money from the platforms came about because efforts to support news with digital advertising hit a dead end. “The drive to force digital platforms to pay news publishers came after a decade in which publishers chased online ad revenue generated by traffic from social and search platforms — only to find that clicks simply couldn’t underwrite the cost of quality journalism,” according to Smith, who adds: “The new study will be a cudgel for regulators looking to squeeze Meta and (especially) Google.”

The question is whether anything is likely to happen and, more important, if the push for platform revenues is coming too late. The platforms don’t look quite as powerful today as they did a few years ago. Google is currently on trial in a massive antitrust case over its ubiquitous search engine. Moreover, after Canada passed a revenue-sharing law, Facebook simply withdrew all news content, and Google has threatened to do the same.

I’ve long argued that lawsuits filed by news publishers over Google’s ad tech are a more promising route to getting some money out of the platforms. About 200 newspapers are suing Google, claiming that the platform’s control of all aspects of the digital advertising market has driven ad prices through the floor to Google’s benefit. The publishers are also suing Facebook, claiming that Google and Facebook colluded illegally. Separately, Gannett is suing Google, but not Facebook.

The new study takes an interesting look at the extent of the damage that Google and Facebook have caused the news business, but I don’t see how that translates into actual revenues for news — especially with Facebook and Google signaling that they’re willing to walk away from news altogether rather than pay.

The ad-tech cases, on the other hand, are grounded in well-established law banning monopolistic practices that cause harm. Google and Facebook have made it impossible for anyone to extract more than a pittance from digital advertising. That’s fine with the platforms because of their massive scale — but it doesn’t work for news outlets, especially small, local enterprises, because they need more than pennies to pay for quality journalism in their communities.

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Google in the dock

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On September 6, 2023

In Media, Technology

The New York Times today reports on the U.S. Justice Department’s antitrust case against Google. The federal trial is scheduled to get under way next Tuesday.

The lawsuit, according to the Times’ David McCabe and Cecilia Kang, revolves around accusations that Google monopolizes search by paying off the likes of Apple and Mozilla to make Google their default search engine. But I think a group of newspaper publishers are pursuing a more interesting antitrust case against Google (and Facebook), charging that Google’s control of every aspect of online advertising technology has allowed the giant platform to drive down ad prices and leave media organizations on the sidelines.

Facebook is part of the suit because the publishers claim that Google and Facebook have colluded in order to keep Facebook from setting up its own competing ad system. Separately, Gannett has sued Google, but not Facebook, over the same issues.

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Sue Cross of INN tells us why this is a golden age of news innovation

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On June 26, 2023

In Local News

Sue Cross at the recent INN Days gathering in Washington. Photo by Will Allen-DuPraw and used with permission.

On the latest “What Works” podcast, Ellen Clegg and I talk with Sue Cross, the veteran journalist who will step down as executive director and CEO of the Institute for Nonprofit News (INN) by the end of 2023. Sue has led INN since 2015, and has overseen a period of tremendous growth. There were 117 nonprofit newsroom members listed in the INN’s 2015 annual report. This year, INN has 425 member newsrooms.

She has also been a driving force in the NewsMatch program, a collaborative fundraising project that has helped raise more than $270 million for emerging newsrooms since its launch in 2016. Before joining INN, Cross was a journalist and executive at The Associated Press. Cross says we are in a golden age of news innovation, and she hopes to continue to lend her support. She also says she hopes to spend time on personal projects.

Ellen has a Quick Take on the launch of the Houston Landing, a nonprofit digital site serving Greater Houston. I provide an update on efforts to extract money out of Google and Facebook in order to pay for news.

You can listen to our conversation here and subscribe through your favorite podcast app.

In a separate lawsuit, Gannett joins antitrust effort aimed at Google (and Facebook)

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On June 21, 2023

In Local News

Photo (cc) 2010 by John Marino

Since early 2021, Google has faced legal challenges over its control of digital advertising. Essentially, the tech giant stands accused of violating antitrust law by controlling all aspects of the ad market. As Paul Farrell, the lawyer for a group of seven newspapers in West Virginia, told Gretchen A. Peck of the trade publication Editor & Publisher:

They [Google] have completely monetized and commercialized their search engine, and what they’ve also done is create an advertising marketplace in which they represent and profit from the buyers and the sellers, while also owning the exchange. Google is the broker for the buyer and gets a commission. Google is the broker for the seller and gets a commission. Google owns, operates and sets the rules for the ad exchange. And they are also in the market themselves.

The suit filed by Farrell on behalf of the West Virginia papers was later joined by about 200 papers and included Facebook, which was accused of colluding with Google in order to receive preferential treatment. Attorneys general in Texas and several other states filed a separate suit, with BuzzFeed News reporting that the CEOs of Google and Facebook “personally signed off on a secret advertising deal.” The Justice Department got involved, and the European Union is suing Google on similar grounds.

On Tuesday, Google’s legal woes grew that much more complicated as Gannett, the country’s largest newspaper chain, filed its own lawsuit against Google in federal district court. Writing in USA Today, Gannett’s flagship publication, chair and CEO Mike Reed accused Google of “monopolization of advertising technology markets and deceptive commercial practices.” He added:

The core of the case and our position is that Google abuses its control over the ad server monopoly to make it increasingly difficult for rival exchanges to run competitive auctions. Further, Google’s exchange rigs its own auctions so Google’s advertisers can buy ad space at bargain prices. That means less investment in online content and fewer ad slots for publishers to sell and advertisers to buy. Google always wins because it takes a growing share of that shrinking pie.

In addition to USA Today, Gannett owns about 200 daily papers and other publications across the country, including local papers such as the Telegram & Gazette of Worcester, The Patriot Ledger of Quincy, the MetroWest Daily News of Framingham and The Providence Journal.

So why did Reed decide to file his own lawsuit rather than joining antitrust efforts that are already under way? It’s a good question, and it’s one that Editor & Publisher’s Mike and Robin Blinder asked him about in their vodcast, “E&P Reports.” Reed’s answer: “You know, as far as us going by ourselves, we just felt like we had the right size, we had the right legal counsel, and we felt like we didn’t want to wait.”

Jeff Jarvis, a well-known digital media observer and director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York Graduate School of Journalism, was critical of the Gannett suit, telling E&P:

It is tragic that once-great Gannett is resorting to protectionism and retribution against its competitors rather than have a strategy for innovation and growth in a changed marketplace. There are legitimate questions to be addressed regarding Google’s power in both sides of the advertising market and authorities in both Europe and the U.S. are investigating them. But for Gannett to blame Google’s alleged monopoly for its present troubles is just sad.

But you can disparage Gannett for decimating its newspapers while still supporting legal efforts to hold Google to account. Few media observers have been more critical of Gannett than my What Works partner Ellen Clegg and I. Greed and crushing debt have led the chain to cut its journalistic capacity far more deeply than would have otherwise been necessary. Yet it’s simply a fact that very little digital advertising money has flowed to the news business, and that lack of innovation on the part of the news business is only partly to blame. If news publishers and government investigators are able to show that situation is either partly or wholly the result of illegal practices on the part of Google (and Facebook), then there’s no reason why Gannett shouldn’t be one of the beneficiaries, regardless of the company’s otherwise loathsome behavior.

Moreover, the antitrust route strikes me as far more promising than congressional efforts to force Google and Facebook to pay for the news they repurpose. Last week, the Senate Judiciary Committee passed the Journalism Competition and Preservation Act on a bipartisan 14-7 vote, according to Ted Johnson of Deadline. The JCPA would allow the news business to bargain collectively with Google and Facebook for a share of their revenues. Even if the JCPA passes the full Senate, though, it seems unlikely to prevail in the Republican-controlled House. A similar law in Australia has served mainly to enrich press baron Rupert Murdoch, and there’s no guarantee that the JCPA would bolster journalism at the local level.

Regulating a monopoly often leads to unintended negative consequences. Breaking one up, as Gannett and its numerous co-plaintiffs would like to do, can spark innovation. Local news today is getting by through a combination of paywalls, low-value programmatic ads and — in the nonprofit sector — foundation grants, membership fees and events. Nothing would be more welcome than to see that bolstered by a reinvigorated ad market.

The Globe agrees to a $5m settlement for sending user video data to Facebook

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On May 20, 2023

In Media

Web publishers are notorious for violating our privacy, and news organizations are no exception. Now, though, one of those organizations, The Boston Globe, is being held to account. The paper has agreed to a $5 million settlement of a lawsuit brought by a California man named David Ambrose over the Globe’s practice of hoovering up the identifying information of users who watch videos on its website and sending it to Facebook.

The proposed settlement, now pending in U.S. District Court, would encompass $4 million to compensate subscribers, who could receive $22 to $44 apiece, and another $1 million to extend the subscriptions of affected users for one week. News of the proposed settlement was first reported Friday evening by Adam Gaffin of Universal Hub. The Globe has denied any wrongdoing.

Before paid digital subscriptions overtook free news, it was understood that the only way news organizations could make money online was to barrage readers with popups, pop-unders, autoplay digital ads and other forms of obnoxious, intrusive commercial messages. That set up a downward spiral, with users fleeing and news orgs ratcheting up the ads even more. You’d think those days would be in the past — but they’re not.

Now that the Globe has agreed to end one of those privacy-violating practices, I hope the paper’s business-side executives will think about how much inconvenience and privacy violations they want to inflict on their digital subscribers, who pay an industry-high $30 a month. I hope other news outlets take heed as well.

The Boston Globe leads in pocketing money from Facebook’s news project

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On February 27, 2023

In Local News

A new study by the Tow Center at the Columbia School of Journalism has found that The Boston Globe was the top recipient of Facebook’s miserly efforts to help fund local journalism.

The study found that the Meta Journalism Project, announced in 2018 and now winding down, provided 564 news organizations with $29.4 million spread across 17 programs. Nearly half of them got the minimum of $5,000. The Globe, though, did considerably better, receiving three grants totaling $390,000, of which $240,000 was for assistance with building and retaining digital subscriptions.

No. 2 on the list is Long Island’s Newsday ($375,000) and No. 3 is The Seattle Times ($355,000). Coming in at No. 4 is a real head-scratcher — the Chicago Tribune, under the chaotic ownership of Tribune Publishing for many years and, since 2021, the notorious hedge fund Alden Global Capital. Rounding out the top five is the Star Tribune of Minneapolis.

The Globe, Newsday, the Times and the Star Tribune are all independently owned — although Newsday has received some unwelcome attention recently for being asleep at the switch while George Santos was lying his way into Congress last fall.

The numbers show why it’s difficult for many to walk away from Twitter

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On December 26, 2022

In Media Nation, Technology

Thanks for the traffic, Bob! Photo (cc) 2011 by Francisco Antunes.

I was looking at my WordPress statistics for 2022, and one number really leaped out at me. Twitter was the third-largest source of traffic to Media Nation in 2022. Search engines were responsible for 70,626 views, Facebook was second at 27,126, and Twitter was right behind at 25,371.

As you probably know, I’ve stopped using Twitter. But it shows you why walking away is pretty close to impossible for self-employed journalists and marginal operators who can’t afford to spurn any service that drives traffic to their site. Although I have a voluntary membership program for $5 a month (please consider!), my livelihood is not dependent on Media Nation.

Search, Facebook and Twitter were the big three, followed by LinkedIn at 4,047 and, in fifth place, an unexpected source: Editor & Publisher, the news industry trade publication, at 3,827. E&P has been kind enough to feature my posts in its daily newsletter on a fairly regular basis, so I guess that’s the explanation. Other notable entries in the top 10 were Universal Hub and Expecting Rain, a site for fans of Bob Dylan, who I’ve been known to write about from time to time. From there it quickly dribbles down to double and single digits.

I’ve taken most of my Twitter-like posts to Mastodon, so I was curious to see that there was nothing. The explanation, I found out, is that Mastodon contains code that makes referrals invisible, which is supposedly some sort of privacy protection. I don’t quite get it, and I’ve learned about a workaround that will supposedly make Mastodon referrals show up. I am getting some referrals from Post News, which, like Mastodon, is emerging as a leading Twitter replacement.

Sticking Twitter in the freezer

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On December 14, 2022

In Media Nation, Technology

Photo (cc) 2014 by Monteregina

When making ethical decisions, we all have to decide where we’re going to draw the line. I’ve been watching Elon Musk’s behavior closely since he purchased Twitter in late October and thinking about where I ought to draw my own line.

It’s different for everyone, and I’m not going to criticize anyone else’s judgment. For Jelani Cobb, it came when Musk restored Donald Trump’s Twitter account, which had been locked because he incited violence during the Jan. 6 insurrection. I semi-shrugged my shoulders. No, I wasn’t thrilled that Musk had brought back Trump and his merry band of Q-adjacent loons, including the loathsome Marjorie Taylor Greene. But my goodness, have you seen the internet? Twitter’s a big place, and I didn’t see any particular reason why we couldn’t all co-exist in our own spaces.

Then there are the deeply stupid “Twitter Files,” promoted by house journalists Matt Taibbi and Bari Weiss, internal documents given to them by Musk that show evidence of some mistakes in moderation but that mainly demonstrate Twitter was attempting to enforce its publicly stated policies about hate speech, incitement and misinformation. There’s some big-time hyperventilating going on about one of those mistakes — the decision to suppress the New York Post’s story about Hunter Biden’s laptop. But that decision was reversed within 24 hours, and it’s worth noting that it was based on an actual policy not to share hacked information. This is a scandal? (Brian Fung of CNN has more.)

What has brought me to this moment, though, is Musk’s own behavior. In late November, Twitter announced that it would no longer take action against misinformation about COVID-19, in accordance with the Chief Twit’s wishes. And then, within the past few days, came the end of the line, at least for me. First Musk attacked Yoel Roth, his former head of trust and safety. Musk tweeted out a short section of Roth’s Ph.D. dissertation to make it appear, falsely, that Roth supports the sexualization of children. “Looks like Yoel is arguing in favor of children being able to access adult Internet services in his PhD thesis,” Musk tweeted. (If you’re interested in the particulars, see this piece at Business Insider by Sawdah Bhaimiya.)

Then, on Sunday, Musk tweeted, “My pronouns are Prosecute/Fauci,” and followed that up with a meme from some fantasy movie (“Lord of the Rings”?) of Fauci whispering in President Biden’s ear, “Just one more lockdown my king.” (Details from Jesse O’Neill in the New York Post.)

At what point does indifference morph into complicity? What we have now is the head of Twitter, with 121 million followers, tweeting out messages that are putting actual people and their families at risk. In what should have been a surprise to no one, Roth has had to flee his home and go into hiding, according to Donie Sullivan of CNN. Fauci, as you no doubt know, has been facing death threats throughout the pandemic, and Musk’s amplifying a bogus call to arrest and prosecute him could make matters worse. I realized that was my line, and Musk had crossed it.

I’ve downloaded my Twitter archive and will no longer be posting there except to help those who contact me and are looking for an alternative. I’ll set my account to private as soon as I’ve tweeted this out. I considered deleting my account altogether, but who knows what’s going to happen? Maybe next week Musk will enter a monastery and donate Twitter to the Wikimedia Foundation. Yes, that’s pretty unlikely — as unlikely as one of Musk’s SpaceX rocket ships safely taking you to Mars and back. For the moment, though, I don’t want to do anything that I can’t reverse if conditions change.

This was not an easy decision. I’ve been a heavy Twitter user since I joined in 2008. I’ve got more than 19,000 followers, and I know that not all of them are going to move to other platforms. But here are some alternatives below. You might also want to check out this roundup from Laurel Wamsley at NPR.

  • If you’re not doing so already, you can sign up to receive new posts to Media Nation by email. It’s free. Just scroll down the right-hand rail on the homepage, enter your email address and click on “Follow.”
  • The most promising Twitter alternative is Mastodon, which is a decentralized network of networks that — once you get past the clumsiness of figuring out how to sign up — works very much like Twitter. I joined in early November, and more than 1,300 people are following me there already. I’m at @dankennedy_nu@journa.host. There are various guides on how to get started. Here’s one from CUNY journalism professor Jeff Jarvis.
  • If Mastodon is the earthy-crunchy alternative to Twitter, then Post News is the corporate version. Like Mastodon, Post News is promoting itself as a civil environment free of abuse and trolling. I know that some Mastodon folks are criticizing Post News for being just another venture-capital play that may eventually come to as bad an end as Twitter. They’re not wrong. For now, though, I’m looking at Mastodon as a place where I can connect mainly with journalists, academics and the extremely online, and then mosey over to Post News to engage with normal people. The interface is simple and attractive; the site is still in beta and will continue to improve. You can follow me at dankennedy_nu.
  • Let’s not forget that Facebook isn’t going anywhere. If we don’t know each other, please don’t send me a friend request; follow my public feed instead. Here’s where you can find me.
  • I’m also on LinkedIn and Instagram, but I prefer not to use those to engage the way I do on the other platforms.

There are a million takes on what has happened to Twitter that I could point you to, and believe me, there are very few that are worth reading. But this one is worthwhile. It’s by Ezra Klein, and he questions whether any of these platforms, even the nice new ones, are doing us any good.

Finally, what we need more than anything on Mastodon and Post News is some diversity, which, at its pre-Musk best, is what was great about Twitter. Black Twitter needs a home, and I really miss my non-Trumpy conservative followers and the less politically engaged. I invite you all to take the plunge. Join one of the alternatives. Cut down or eliminate your Twitter activity. And discover the joys of de-Muskifying your life.

A bill to force Google and Facebook to pay for news moves closer to passage

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On December 6, 2022

In Local News

Photo (cc) 2008 by Nick Ares

A controversial measure that could force Google and Facebook to pay for the news they repurpose has suddenly been revived in the last days of the lame-duck Congress. The Journalism Competition and Preservation Act, or JCPA, would allow news organizations to skirt antitrust law and band together so they can negotiate with the two giant platforms over compensation. If negotiations fail, an outside arbitrator would be brought in to impose a settlement.

On the “What Works” podcast, Ellen Clegg and I recently interviewed U.S. Rep. David Cicilline, D-R.I., one of the co-sponsors of the JCPA. Cicilline spoke of the measure in terms of breaking up Google and Facebook’s monopoly on digital advertising, which is certainly real enough. According to Statista, the two tech titans control 52% of the market.

I last wrote about the JCPA in August. And though I described the bill as having lurched back to life, there hadn’t been many signs since then that it was going anywhere. That is, until this week, when the measure was added to a “must pass” defense-funding bill. House Republicans oppose the JCPA, and with Rep. Kevin McCarthy, R-Calif., on the verge of taking the speaker’s gavel, right now is the last chance. Sara Fischer and Ashley Gold have the details at Axios.

In August, I expressed some reservations about the JCPA but thought it was worth passing to see what would come out of it, especially since it was time-limited to four years (since doubled to eight). You often hear simplistic claims by proponents that Google and Facebook are republishing journalistic content without compensation. In fact, they’re not republishing anything. There’s no stealing and no copyright violation taking place. But there’s also no question that Google is far more valuable and useful because users are able to search for news content, and that some not-insignificant portion of Facebook’s traffic comes from users linking to and commenting on news stories. It does not strike me as unfair to insist that the platforms pay something for that value.

And yet the JCPA carries with it the possibility of some real downsides. Greedy corporate owners like Gannett and Alden Global Capital would benefit without any obligation to invest more in journalism. And though the legislation excludes larger news organizations like The New York Times and The Washington Post, a similar law in Australia has served mainly to line the pockets of the press baron Rupert Murdoch.

A better bill, in my view, is the Local Journalism Sustainability Act, or LJSA, which would provide for three tax credits: one for consumers who pay for a local news subscription; one for advertisers; and one for publishers that hire or retain journalists. As Steve Waldman of the Rebuild Local News Coalition told Ellen and me on “What Works,” that last provision, at least, would only benefit the corporate chains if they actually invest in journalism. But the LJSA has been seemingly stuck in congressional limbo for several years. If the JCPA passes, I can’t imagine that the LJSA will do anything other than disappear.

Facebook is threatening to eliminate all news content if the JCPA becomes law, a threat similar to one that it made and backed away from in Australia. The company, formally known as Meta, also ended its program of supporting local journalism recently, which will remove millions of dollars from what is an already shaky revenue stream.

I have to say that I was struck by a letter of opposition to the JCPA issued Monday by a coalition of 26 public-interest and trade organizations including the ACLU, the Internet Archive, LION (Local Independent Online News) Publishers, Common Cause, the Wikimedia Foundation and the United Church of Christ Ministry (!). Among other things, the letter claims that the money will mainly benefit media conglomerates and large broadcasters without setting aside anything for journalists. The coalition puts it this way: “The JCPA will cement and stimulate consolidation in the industry and create new barriers to entry for new and innovative models of truly independent, local journalism.”

We’ll see how it works out. There’s no question that many local news organizations are in difficult straits, and that a guaranteed source of income from Google and Facebook may be the difference between thriving and just barely getting by. If the JCPA is approved, I just hope it doesn’t become one of those government programs that become a permanent part of the landscape. If it works, fine. If there are problems, fix them. And if it’s a disaster, get rid of it.

Rep. Cicilline on why he favors extracting revenues for news from Google and Facebook

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On October 21, 2022

In Local News

Congressman David Cicilline. Photo (cc) 2018 by the Brookings Institution.

On the latest “What Works” podcast, Ellen Clegg and I talk with U.S. Rep. David Cicilline, who represents the First District of Rhode Island in Congress. Cicilline, who is a Democrat, is part of a bipartisan group of U.S. representatives and senators sponsoring the Journalism Competition and Preservation Act. Co-sponsors include Democratic Sen. Amy Klobuchar from Minnesota; Republican Sen. John Kennedy from Louisiana; Republican Rep. Ken Buck from Colorado; and Senate and House Judiciary Committee chairs Dick Durbin, an Illinois Democrat, and Jerrold Nadler, a New York Democrat.

The JCPA would remove legal obstacles to news organizations’ ability to negotiate collectively and secure fair terms from gatekeeper platforms that proponents say use news content without paying for it. Critics counter that it’s more complicated than that. The legislation also allows news publishers to demand arbitration if they reach an impasse in those negotiations.

Ellen has a Quick Take on new research being done by the Institute for Nonprofit News. The INN just released 2022 fact sheets on three types of nonprofit newsrooms: local news, state and regional news, and national and global news. While each group shares some similarities, INN found that geography matters in terms of revenue models and audience development.

I take a few more whacks at Gannett because newsrooms are being hit with unpaid furloughs, buyouts, a freeze on their pension benefits and more.

You can listen to our latest podcast here and subscribe through your favorite podcast app.

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