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There’s no reason to think that a Nextdoor-like service would have saved local news

Every so often, media observers berate the newspaper business for letting upstarts encroach on their turf rather than innovating themselves.

Weirdly enough, I’ve heard a number of people over the years assert that newspapers should have unveiled a free classified-ad service in order to forestall the rise of Craigslist — as if giving away classified ads was going to help pay for journalism. As of 2019, Craigslist employed a reported 50 full-time people worldwide. The Boston Globe and its related media properties, Stat News and Boston.com employ about 300 full-time journalists. As they say, do the math.

Sometimes you hear the same thing about Facebook, which is different enough from journalism that you might as well say that newspapers should have moved into the food-services industry. Don Graham’s legendary decision to let Mark Zuckerberg walk away from an agreed-upon investment in Facebook changed the course of newspaper history — the Graham family could have kept The Washington Post rather than having to sell to Jeff Bezos. As a bonus, someone with a conscience would have sat on Facebook’s board, although it’s hard to know whether that would have mattered. But journalism and social media are fundamentally different businesses, so it’s not as though there was any sort of natural fit.

More recently, I’ve heard the same thing about Nextdoor, a community-oriented social network that has emerged as the news source of record for reporting lost cats and suspicious-looking people in your neighborhood. I like our Nextdoor and visit it regularly. But when it comes to discussion of local news, I find it less useful than a few of our Facebook groups. Still, you hear critics complain that newspapers should have been there first.

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Well, maybe they should have. But how good a business is it, really? Like Craigslist, social media thrives by having as few employees as possible. Journalism is labor-intensive. Over the years I’ve watched the original vision for Wicked Local — unveiled, if I’m remembering correctly, by the Old Colony Memorial in Plymouth — shrink from a genuinely interesting collection of local blogs and other community content into a collection of crappy websites for GateHouse Media’s and now Gannett’s newspapers.

The original Boston.com was a vibrant experiment as well, with community blogs and all sorts of interesting content that you wouldn’t find in the Globe. But after the Globe moved to its own paywalled website, Boston.com’s appeal was pretty much shot, although it continues to limp along. For someone who wants a free regional news source, it’s actually not that bad. But the message, as with Wicked Local, is that maybe community content just doesn’t produce enough revenue to support the journalists we need to produce actual news coverage.

Recently Will Oremus of a Medium-backed website called OneZero wrote a lengthy piece about the rise of Nextdoor, which has done especially well in the pandemic. Oremus’ take was admirably balanced — though Nextdoor can be a valuable resource, especially in communities lacking real news coverage, he wrote, it is also opaque in its operations and tilted toward the interests of its presumably affluent users. According to Oremus, Nextdoor sites are available in about 268,000 neighborhoods across the world, and its owners have considered taking the company public.

There’s no question that Nextdoor is taking on the role once played by local newspapers. But is that because people are moving to Nextdoor or because local newspapers are withering away? As Oremus writes, quoting Emily Bell:

In some ways, Nextdoor is filling a gap left by a dearth of local news outlets. “In discussions of how people are finding out about local news, Nextdoor and Facebook Groups are the two online platforms that crop up most in our research,” said Columbia’s Emily Bell. Bell is helping to lead a project examining the crisis in local news and the landscape that’s emerging in its wake.

“When we were scoping out, ‘What does a news desert look like?’ it was clear that there’s often a whole group of hyperlocal platforms that we don’t traditionally consider to be news,” Bell said. They included Nextdoor, Facebook Groups, local Reddit subs, and crime-focused apps such as Citizen and Amazon Ring’s Neighbors. In the absence of a traditional news outlet, “people do share news, they do comment on news,” she said. “But they’re doing it on a platform like Nextdoor that really is not designed for news — may be in the same way that Facebook is not designed for news.”

Look, I’m glad that Nextdoor is around. I’m glad that Patch is around, and in fact our local Patch occasionally publishes some original reporting. But there is no substitute for actual journalism — the hard work of sitting through local meetings, keeping an eye on the police and telling the story of the community. As inadequate as our local Gannett weekly is, there’s more local news in it than in any other source we have.

If local newspapers had developed Nextdoor and offered it as part of their journalism, would it have made a different to the bottom line? It seems unlikely — although it no doubt would have brought in somewhat more revenues than giving away free classifieds.

Nextdoor, like Facebook, makes money by offering low-cost ads and employing as few people as possible. It may add up to a lot of cash in the aggregate. At the local level, though, I suspect it adds up to very little — and, if pursued by newspapers, would distract from the hard work of coming up with genuinely sustainable business models.

The New York Times has a David Brooks problem

David Brooks. Photo (cc) 2011 by the Miller Center.

The New York Times’ David Brooks problem has ratcheted up from “uh, oh” to “holy cow.”

Craig Silverman and Ryan Mac of BuzzFeed News reported on Wednesday that Brooks, a prominent Times columnist, is getting paid for his work at Weave, a civic-engagement project that’s part of the Aspen Institute. Among Weave’s funders is Facebook.

A week earlier, BuzzFeed reported that Brooks had written a post on Facebook’s blog singing the praises of Facebook Groups without letting his editors at the Times know about it. That was bad enough. But now that there’s money involved, the Times is going to have to take action.

It’s unclear whether the Times knows he’s been getting a second salary. If they do, then perhaps Brooks can avoid being disciplined. But whether they know or not, what about the rest of us? Every time Brooks writes about an organization in which he has a financial stake, that needs to be appended to the bottom of his column. Needless to say, the problem with that is it would look ridiculous. I’m sure the Times doesn’t want to run a piece by one of its own staff columnists that reveals he’s in the tank to someone else.

As someone who has worked in opinion journalism for many years, and who teaches it, I feel like I have a stake in calling out Brooks’ misbehavior. I stress to my students repeatedly that we have the same ethical obligations as straight-news reporters. We don’t make political contributions. We don’t put signs on our lawns. And we maintain our independence.

One of the four tenets of the Society of Professional Journalists’ Code of Ethics is to “act independently.” The code explains further: “Avoid conflicts of interest, real or perceived. Disclose unavoidable conflicts.” Brooks’ conflict seems avoidable enough, but at the very least he should have disclosed it.

A summary of Bill Kovach and Tom Rosenstiel’s “The Elements of Journalism” has this to say about independence and opinion journalism:

Journalistic independence, write Kovach and Rosenstiel, is not neutrality. While editorialists and commentators are not neutral, the source of their credibility is still their accuracy, intellectual fairness and ability to inform — not their devotion to a certain group or outcome. In our independence, however, journalists must avoid straying into arrogance, elitism, isolation or nihilism.

I assume the Times is going to take this seriously. It may be bad for Brooks that the Times’ opinion editor, Kathleen Kingsbury, is just a few weeks into her job and may want to send a message to the rest of her staff.

But I’m troubled by a statement BuzzFeed got from Times spokeswoman Eileen Murphy. Silverman and Mac write: “Murphy said other Times columnists have roles outside the paper. When asked for an example, she cited Paul Krugman, who was a professor of economics at Princeton and is currently a distinguished professor at the Graduate Center of the City University of New York.”

Seriously? Krugman is not a columnist who scored an academic gig. He’s a professor who was so highly regarded that the Times hired him as a columnist. The Times is his second job (or was; he seems to be semi-retired now), just as the Aspen Institute is Brooks’ second. And everyone knows about Krugman’s academic background. It was hardly a secret when he won the Nobel Prize in Economics.

I hope this can be resolved. Brooks is reviled in many circles, but I value his work. He often shows himself to be out of touch, and he can drive me crazy sometimes. But at his best he’s very good, and I’d hate to see him go, or set up a Substack.

It will be interesting to see what happens when Brooks and Washington Post columnist Jonathan Capehart kick the week’s news around on the “PBS NewsHour” tomorrow evening. Brooks should address it.

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Rep. Cicilline to push bill allowing news publishers to negotiate with Big Tech

Could Australian-style rules to force Google and Facebook to pay for news be coming to the United States?

U.S. Rep. David Cicilline, D-R.I., told the CNN program “Reliable Sources” over the weekend that the House will soon take up legislation that would give news publishers an antitrust exemption allowing them to bargain collectively with the Big Tech platforms. The purpose would be negotiating a compensation system.

“Local news is on life support in this country,” said Cicilline, who chairs the House Judiciary Antitrust Subcommittee. “The monopoly power of these two platforms is resulting in a significant decline in local journalism.”

More broadly, he said his committee will also take up parts of a 450-page report, compiled over 16 months, to rein in the power of the giant platforms. He told host Brian Stelter that many of the recommendations in the report have bipartisan support and are aimed at breaking up the tech companies’ monopoly power.

The most intriguing of those ideas, according to a recent story by Cat Zakrzewski in The Washington Post, involves “interoperability and data portability, which would make it easier for consumers to move their data to new or competing tech services.”

Facebook has massive market dominance, and it would be difficult for a competitor to get a toehold in the market in any case. But it would be at least somewhat more feasible if users could easily transfer all their data over to a new service and delete it from Facebook, something that is almost impossible to do at the moment.

Regardless of what happens, it seems that Google and Facebook may soon no longer be able to operate with impunity. I’m far from certain that the Australian system is the best way to go given that it privileges entrenched publishers like Rupert Murdoch. But the idea that the platforms should pay something for what they use is long overdue.

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Facebook to fund revenue models for community news projects

When Facebook has announced various initiatives to help news organizations, they have tended to benefit larger newsrooms that are less in need of assistance. For instance, when the News Tab was unveiled a year and a half ago, it was explicitly designed to benefit behemoths like The New York Times, The Washington Post and BuzzFeed.

As I wrote then: “At a time when local news is under unprecedented economic pressure, the News Tab will only widen the gap between relatively well-off, highly visible national news organizations and small local projects. The national sites will get paid; the local sites will be billed monthly.”

On Wednesday, though, LION (Local Independent Online News) Publishers announced a $1 million, two-year initiative funded by the Facebook Journalism Project to help its members develop their revenue models. Anika Anand, deputy director of LION Publishers, writes:

Through an application process, we will select a group of LION member organizations that will receive up to two years of funding to hire someone who will focus primarily on revenue generation with the goal of making their position self-sustaining at the end of the two years. For our first cohort, we will prioritize news businesses pursuing sustainability through a revenue strategy focused on readers, major donors or advertisers. Every LION member will be considered eligible for this program — their tax status will not matter.

In other words, the program is open to for-profit and nonprofit ventures alike.

News organizations that are part of LION are sources of reliable journalism, and they’re providing it on the community level, where the news implosion has hit the hardest. With 262 members, $1 million isn’t going to go a long way. But we do seem to be at a moment at which Facebook and Google understand that they are going to have to pay for the news they’ve been using. The LION program is exceptionally worthy.

Let’s call this a good start.

Can Gannett and McClatchy’s joint venture reinvigorate national advertising?

At root, the debate over whether Google and Facebook should pay for news is about how their duopoly destroyed the value of digital advertising and then kept most of the revenues for themselves.

News, which is expensive, can’t survive on the pennies brought in by Google’s programmatic ads. That’s why there’s been so much emphasis in recent years on reader revenue — an emphasis that, at least in a few places, is starting to pay off.

Still, it would surely be a positive if news organizations could develop a revenue stream other than digital subscriptions. When readers are empowered, they expect their preferences and prejudices to be catered to. You need a balance. That’s why it’s interesting to see Axios’ recent report that Gannett and McClatchy will combine forces to sell national advertising for their hundreds of local and regional papers.

Can Gannett and McClatchy’s efforts drive up the price of digital ads? That’s the real issue, and without that their effort is not going to have much of an effect. Of course, it also does nothing to boost ad sales at the local level, which have been on the decline for years. Yes, local businesses have gravitated to Facebook just like everyone else. But local newspapers aren’t exactly known for being aggressive and creative about selling to the local hair salons, pizza restaurants and funeral homes, either. It can be done. Just ask Howard Owens, publisher of The Batavian in western New York state.

The partnership shows why I differentiate between Gannett and Alden Global Capital, even though their nuke-the-newsroom approach to the bottom line looks very much the same on the ground. Alden, by all appearances, is trying to squeeze as much money as it can out of the newspapers it’s killing and then get out. Gannett, on the other hand, is hoping to build a community news chain that can be sustainable in the long run.

Gannett’s biggest mistake, carried over from its predecessor company, GateHouse Media, is that its executives think they can build for the future while failing to provide enough journalism to retain readers. No matter how smart your business model, it’s not going to work if all you’re offering your audience is a shell.

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Facebook flexes its muscles, then claims it was all a mistake

Regardless of what really happened, this had the appearance of pure extortion.

In response to Australia’s new law requiring Google and Facebook to hold negotiations with news publishers aimed at compensating publishers for their content, Facebook took down not just news — which would be a proportionate response, I suppose — but all kinds of information.

The newly banned Facebook content comprises, as The Washington Post reports, “dozens of government and charity websites as well, including public health sites containing critical information about the pandemic during the first week of its coronavirus vaccine rollout.”

The information was restored about 12 hours later, and Facebook claimed it was all a mistake. Still, it was a powerful demonstration of what Mark Zuckerberg can do if you refuse to kiss the ring.

The standoff in Australia shows why Google needs news more than Facebook does

I’m hardly the first person to make this observation, but there’s a reason that Google is trying to accommodate Australian news publishers while Facebook is fighting them tooth and nail: Google needs news much more than Facebook does. The New York Times puts it this way:

Facebook and Google ultimately value news differently. Google’s mission statement has long been to organize the world’s information, an ambition that is not achievable without up-to-the-minute news. For Facebook, news is not as central. Instead, the company positions itself as a network of users coming together to share photos, political views, internet memes, videos — and, on occasion, news articles.

Writing at the Columbia Journalism Review, Mathew Ingram notes that news makes up only 5% of the content on Facebook’s News Feed, at least according to the company.

While I have no problem with publishers trying to extract some revenues from the two tech giants, I’m disheartened to see that Google is trying to buy its way out of trouble in Australia by cutting deals with the likes of Rupert Murdoch. This shouldn’t be a matter of buying off critics and then resuming business as usual.

That’s why I prefer an idea put forth by the tech analyst Benedict Evans in a conversation with Ingram: help fund news by taxing Google and Facebook. At least theoretically, that could lead to a more equitable distribution of revenues to large and small publishers alike.

Regardless of what the road ahead looks like, though, it’s clear that Facebook is going to be harder to deal with than Google. The Zuckerborg just doesn’t need journalism as much.

Earlier:

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Microsoft’s president says Google and Facebook should pay for news content

The Overton Window has opened a bit wider for the idea of requiring Google and Facebook to pay for news content. At Axios, Sara Fischer reports that Microsoft president Brad Smith has endorsed the Australian government’s move to do just that — and thinks such a system ought to be considered in the U.S. as well.

What’s taking place in Australia is complicated, but essentially it requires Google and Facebook to bargain with the news business and come up with a compensation system. Both companies have said they would stop offering some of their services if Australian authorities don’t back off.

In the U.S., the News Media Alliance, a lobbying group for news publishers, has been pushing for several years for an antitrust exemption that would allow them the right to bargain collectively with the tech giants — which is exactly what is going to happen in Australia. With the sheen wearing off Big Tech’s once-sterling image, the likelihood of Congress passing such an exemption has increased. A lawsuit brought by a group of West Virginia newspapers that I wrote about for GBH News last week may serve as a further goad.

In a blog post, Microsoft’s Smith cites a News Media Alliance study showing that Google makes an estimated $4.7 billion a year “from crawling and scraping news publishers’ content.” That study came under fire at the time of its release a couple of years ago. But regardless of the actual figure, Google — and Facebook — are surely making a lot of money from other people’s content without paying for any of it.

Smith makes no bones about his own business imperatives, saying that Microsoft is prepared to play by Australia’s rules through its Bing search engine, writing:

Microsoft’s Bing search service has less than 5% market share in Australia, substantially smaller than the 15-20% market share that we have across PC and mobile searches in the United States and the 10-15% share we have in Canada and the United Kingdom. But, with a realistic prospect of gaining usage share, we are confident we can build the service Australians want and need. And, unlike Google, if we can grow, we are prepared to sign up for the new law’s obligations, including sharing revenue as proposed with news organizations. The key would be to create a more competitive market, something the government can facilitate. But, as we made clear, we are comfortable running a high-quality search service at lower economic margins than Google and with more economic returns for the press.

A final thought. If Congress isn’t prepared to act, might it be possible to require Google and Facebook to compensate news publishers at the state level? Jack Nicas reports in today’s New York Times that a proposal has been made in North Dakota to forbid Apple and Google from collecting app-store fees from North Dakota-based businesses.

The legislation strikes me as more than a little half-baked. Yet the principle — that states can impose their own regulations on Big Tech — is one worth pondering.

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Why I’m asking you to become a member of Media Nation

At the beginning of 2021, I decided to shift my online activities — I was going to blog more and use Facebook and Twitter less. At the same time, I decided to start offering memberships to Media Nation for $5 a month, following the lead of Boston College historian Heather Cox Richardson, pundits such as Andrew Sullivan, reporters such as Patrice Peck and others.

Most of these other folks are using Substack, a newsletter platform. I figured I had sunk way too many years — 16 — into writing Media Nation as a blog, and I didn’t want to switch to a platform that’s reliant on venture capital and could eventually go the way of most such companies. So here I am, still blogging at WordPress.com, and asking readers to consider becoming members by supporting me on Patreon.

And yes, I have been blogging more as I try to stay on top of various media stories, especially involving local journalism, as well as politics, culture and the news of the day. Just this week I’ve written about Larry Flynt and the First Amendment, Duke Ellington’s legacy, a new partnership between The Boston Globe and the Portland Press Herald, and a Louisiana reporter who’s been sued for — believe it or not — filing a public-records request.

If you value this work, I hope you’ll consider supporting it for $5 a month. Members receive a newsletter every Friday morning with exclusive content.

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Google and Facebook have decimated newspaper ad revenues. A lawsuit aims to change that.

Previously published at GBH News.

One afternoon in early 2016, I arrived at The Boston Globe’s former headquarters in Dorchester to talk with John Henry about the state of his newspaper. Before we could begin, though, he wanted to talk about something that was bugging him.

Google, it seemed, had started slapping the word “subscription” on Globe content when it came up in searches, even though few people were likely to run into what was then a relatively porous paywall. It took months to straighten out, he complained — costing the Globe readers and, therefore, advertising revenue.

Henry’s lament illustrates the complicated relationship publishers have long had with Google. On the one hand, they complain bitterly that the dominant search engine is repurposing their journalism without paying for it. On the other hand, they depend on the clicks that Google sends their way.

Now matters may be coming to a head.

Under pressure from the Australian government, Google and Facebook have agreed to start paying for the content they repackage, MediaPost reports.

In the U.S., the News Media Alliance, which represents newspaper publishers, has long sought an exemption from antitrust law so that they could attempt to negotiate a compensation package with the two companies. There are signs that Congress may finally pass legislation to let them try.

And now, a chain of newspapers in West Virginia has filed a lawsuit charging that Google and Facebook violated antitrust laws by forming an alliance aimed at perpetuating their monopoly on digital advertising.

In order to understand exactly what the two companies — especially Google — have done to harm the news business, you need to consider two different but related practices.

First there is the matter of grabbing content, which, as Henry’s complaint shows, is convoluted: Publishers can’t live with Google and can’t live without it. Years ago, before the Google-Facebook lockdown on ad revenue was even on the horizon, publishers would argue that Google should pay them. Google would counter that it was driving traffic to news sites, thus increasing the value of advertising on those sites. There was some logic to Google’s argument, though somehow it never worked out in favor of the publishers.

The problem in recent years is that Google acquired a number of advertising businesses and now controls not just search but also the advertising associated with search. Through the use of an automated auction system, the price of digital ads is being driven ever lower, making it all but worthless. As Nicco Mele, a former deputy publisher of the Los Angeles Times, explained several years ago, a full-page weekday ad in the paper that cost $50,000 had given way to Google ads on its website that brought in less than $20 to reach the same number of readers.

“To a large extent, Facebook and Google are sucking up revenue that publishers of content should be receiving,” Mele told an audience at Harvard.

It’s the ever-shrinking value of digital advertising that’s being targeted in the West Virginia lawsuit, brought by HD Media. The small chain owns seven newspapers, most notably the Charleston Gazette-Mail and The Herald-Dispatch of Huntington. Paul Farrell, the lawyer who represents the papers, told the trade magazine Editor & Publisher that Google is leveraging its control of two entirely different businesses in order to monopolize ad revenues and squeeze out anyone else.

“They 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,” Farrell was quoted as saying. “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.”

So where does Facebook fit in? According to a lawsuit filed by several state attorneys general that was reported by The Wall Street Journal, Google and Facebook are colluding through an agreement that Google has code-named Jedi Blue. The AGs contend that Google provides Facebook with special considerations so that Facebook won’t set up a competing ad network. (Google and Facebook have denied any wrongdoing, and, in the E&P story, Google reiterated that stance with regard to the HD Media suit.)

For Google, it’s a perfect closed environment: It holds a near-monopoly on search and the programmatic advertising system through which most ads show up on news websites. And it has an agreement with Facebook aimed at staving off competition.

As Washington Post media columnist Margaret Sullivan observed, the collapse of advertising is what has led to the closure of more than 2,000 newspapers over the past 16 years — as well as the shrinkage of surviving papers like the Gazette-Mail, which won a Pulitzer Prize for its coverage of the opioid crisis in 2017.

Back when newspapers were manufactured out of dead trees, advertising was responsible for about 80% of revenue. Once they started moving online, that revenue stream was decimated, first by Craigslist, a mostly free service that scooped up nearly all the classified ads, and then by Google and Facebook.

Ironically, Craigslist founder Craig Newmark today directs much of his considerable philanthropy to the news business, and Google and Facebook spend quite a bit on various journalism initiatives as well. But whereas Newmark’s only sin was to build a better mousetrap, Google and Facebook’s dominance has more in common with the robber barons of the Gilded Age. It’s time that someone brought them to heel.

At least some newspapers have come up with a formula for overcoming the digital-advertising debacle. The New York Times, The Washington Post, The Wall Street Journal and, yes, John Henry’s Boston Globe have all reinvented themselves as successful enterprises by reducing their reliance on ads in favor of digital subscriptions.

But it’s far from clear whether that will work for local and most regional papers, and even those that are doing well run the risk of becoming overreliant on one source. A reliable stream of ad revenue, freed from the depredations of Big Tech, would go a long way toward revitalizing journalism.