The debate over what platform companies owe the news business goes back many years and has come to resemble a theological dispute in its passions and the certainty expressed by those on either side. Indeed, longtime digital-news pundit Jeff Jarvis immediately weighed in with a smoking hot Twitter thread responding to Smith.
Oh FFS, no, the news business crushed itself by relying on protectionism over innovation. @benyt goes all Murdoch & endorses Australia's digital Stamp Act. This isn't media criticism. It's lobbying. "Big Tech Has Crushed the News Business" https://t.co/vZJXLn4L4n
I’m not going to resolve that debate here. Rather, I want to offer some context. First, something like 90% of all new spending on digital advertising goes to Google and Facebook. Second, Google’s auction system for brokering ads destroyed any hopes news publishers had of making actual money from online advertising. How bad is it? Here’s an except from my 2018 book, “The Return of the Moguls”:
Nicco Mele, the former senior vice president and deputy publisher of the Los Angeles Times, who’s now the director of the Shorenstein Center on Media, Politics and Public Policy at Harvard’s Kennedy School [he has since moved on], explained at a Shorenstein seminar why a digital advertising strategy based on clicks simply doesn’t work for news organizations that are built around original (which is to say expensive) journalism. “Google has fundamentally shaped the future of advertising by charging on a performance basis — cost per click,” he said. “And that has been a giant, unimaginable anchor weight dragging down all advertising pricing.”
For example, Mele said that a full-page weekday ad in the LA Times, which would reach 500,000 people, costs about $50,000. To reach the same 500,000 people on LATimes.com costs about $7,000. And if that ad appeared on LATimes.com via Google, it might bring in no more than $20. “Models built on scale make zero sense to me,” Mele said, “because I just don’t see any future there.” Yet it has led even our best newspapers to supplement their high-quality journalism with a pursuit of clicks for the sake of clicks.
From $50,000 to $7,000 to $20. This is why the advertising model for digital news is broken, and it’s why newspapers have gone all-in on paid subscriptions.
Jeff Bezos is our most elusive famous billionaire. With his shaved head and gnomish smile, it sometimes seems like he’s perpetually in our midst. Yet unlike Mark Zuckerberg, who’s forever explaining himself and his intentions, or the late Steve Jobs, always ready with a boast or a putdown, Bezos only rarely puts his thoughts into words.
When he does, he is intentionally obscure. “Bezos made a statement saying all the correct and anodyne things, but he was not terribly revealing,” David Remnick wrote shortly after Bezos announced he would buy The Washington Post. You could say that’s the way Bezos has operated at Amazon, the company that made him the world’s richest person. Or how he has lived his life.
Yes, he was forced to reveal some of his most intimate secrets when The National Enquirer reported that he was having an affair and threatened to publish embarrassing photos. But even then, he acted so that he could disclose his secrets on his own terms, thus denying his enemies the satisfaction of humiliating him. It worked. If there really were any photos, they have not surfaced.
Now both The New Yorker and The Atlantic have weighed in with lengthy pieces aimed at answering the question of what drives Amazon — and Bezos. The two articles, which run more than 13,000 and 11,000 words respectively, take very different approaches.
In The New Yorker, Charles Duhigg presents us with a classic business story, deep on details, both the good and the bad — some of which is very bad indeed, such as the company’s brutal work environment and its carnivorous relationship with companies that sell products on its site. Much of the ground Duhigg covers is familiar to those of us who’ve obsessed over Amazon. The most novel insight Duhigg offers is that Amazon, based as it is on a set of ideas (Bezos’ famous 14 Leadership Principles), can be likened to General Motors in its early decades — nimble and adaptable enough to enter and dominate industries entirely unrelated to its original mission of selling books.
Amazon Web Services, the server farm that powers organizations from Apple to the CIA, would be a paradigmatic example of that, but so would the rise of Amazon Prime as a media service that offers television, movies, music and, yes, one of the world’s great newspapers. By contrast, companies like Google and Facebook are similar to Ford in those early years, tied to search and social networking for the bulk of their revenues as firmly today as they were when they were founded. Amazon, like General Motors before it, is a “process company.” Google, Facebook and Ford are “product companies.”
All this is too mundane for Franklin Foer, who, writing in The Atlantic, offers a fanciful theory of Bezos. What really motivates Bezos — what pushes him to keep earning more and more money, far more than any person, or any 10,000 people, would ever need — is that he wants to go to outer space. Or, to put it more realistically (OK, not that much more realistically), he wants humanity to colonize space before we have made the earth entirely uninhabitable. Thus the founding of his rocket company, Blue Origin, which, Foer notes, Bezos has called his “most important work.” Foer adds, “With his wealth, and the megaphone that it permits him, Bezos is attempting to set the terms for the future of the species, so that his utopia can take root.”
Bezos does not like to talk to journalists. He rarely gives interviews — not to Brad Stone, the author of a 2013 book about Amazon called “The Everything Store.” Not to Duhigg. Not to Foer. Not even to The Washington Post, although he’s been quoted when he’s addressed the staff or participated in events such as a public conversation with the Post’s executive editor, Marty Baron.
And not to me. When I was researching my 2018 book on a new breed of wealthy newspaper owners, “The Return of the Moguls,” I spent months sending emails and snail-mails to Bezos and to various other people at the Post and at Amazon. The closest I got was a brief phone conversation with a top Amazon official who said he’d talk with Bezos about my request. No dice. A colleague even suggested that I fly to a place where Bezos was giving a speech and try to ambush him afterwards for a few quotes.
I decided not to. First, I had no confidence in my ability to stake out the right spot so that I could accost him as he was passing by. Second, I had even less confidence that he would stop and say anything — at least anything that wasn’t “correct and anodyne.” Other wealthy newspaper owners, including John Henry of The Boston Globe and Aaron Kushner, formerly of the Orange County Register, spoke with me at length. But Bezos proved as elusive with me as he does with everyone else.
So what’s next for Bezos and Amazon? At cultural moment when our love affair with all things tech is turning sour, the next few years could be unpleasant. Duhigg traces the history of antitrust law, explaining that, in recent decades, the government lost interest in breaking up monopolies unless they engaged in behavior that resulted in higher prices for consumers. Since Amazon’s stranglehold on the digital marketplace has resulted in lower prices, there was no reason to think there was a problem. Same with Google and Facebook, which, after all, are free.
Now, though, the antitrust worm is turning. Older ideas that monopolies are harmful to the economy regardless of their effect on prices are being embraced by everyone from antitrust regulators in President Trump’s Justice Department to Democratic presidential candidate Elizabeth Warren, who has vowed to break up the tech monopolies. And, as we know, Trump has attacked Amazon repeatedly because of his fury over how the Post has covered him.
“We may be at a breaking point now,” writes Duhigg, who quotes the historian David Farber as telling him: “It’s like the 1880s or the 1930s all over again. The pressure is going to continue building, the powerful are going to continue being watched and criticized and gawked at, until something pops.”
What Bezos has always had going for him was his embrace of the long view, even unto the stars and beyond. “If you look at why Amazon is so different than almost any other company that started early on the internet, it’s because Jeff approached it from the very beginning with that long-term vision,” Brad Stone quotes Bezos’ friend Danny Hillis as saying in “The Everything Store.” “It was a multi-decade project. The notion that he can accomplish a huge amount with a larger time frame, if he is steady about it, is fundamentally his philosophy.”
Will Amazon keep getting bigger and bigger? Or are we at peak Amazon (and Google and Facebook), poised on the brink of a future that may look very different from what has come before? Bezos may still embrace the long view, but he’s 55 now, an age when most people in his position begin thinking about their legacy.
No doubt Bezos will continue to say correct and anodyne things. But as Duhigg and Foer make clear, he now faces a challenge unlike anything he’s had to deal with — the challenge of surviving the political and culture wars that have sprung up around him and, ultimately, becoming a good corporate citizen.
Bernie Sanders is an unlikely savior of journalism.
The iconoclastic senator has long had a prickly relationship with the press in his home state. According to Paul Heintz, a staff writer with the alt-weekly Seven Days, Sanders hasn’t granted a full-fledged interview in more than four years to the paper, which touts itself as the state’s largest. And Seven Days is not alone. “I would say that it’s highly unusual for an elected official in Vermont to not regularly speak to Vermont reporters,” Heintz said. “I think it’s problematic.”
Then, last month, Sanders claimed without evidence that The Washington Post covered him critically because of his attacks on Amazon, whose founder and chief executive, Jeff Bezos, also owns the Post. “The remark sounded an awful lot like the kind of criticism leveled by someone else,” said NPR’s Domenico Montanaro. That someone else: President Trump.
But apparently you don’t have to love the media to appreciate its vital role in a democracy. Because last week Sanders, an independent socialist who is once again seeking the Democratic presidential nomination, outlined a solid media-reform proposal in an essay for the Columbia Journalism Review.
“Real journalism requires significant resources,” he wrote. “One reason we do not have enough real journalism in America right now is because many outlets are being gutted by the same forces of greed that are pillaging our economy.”
Sanders devoted much of his piece to rehashing the financial crisis that has brought news organizations to their knees, especially at the local level. But he also offered some specific ideas that fall into three categories:
• Opposing media mergers such as the proposed combination of the GateHouse Media and Gannett newspaper chains as well as the CBS-Viacom deal. Media companies would be required to detail how many journalism jobs would be lost in such mergers. Employees would have an opportunity to buy their media companies. Unions would be strengthened. And ownership caps would be re-imposed on broadcast outlets for the first time since 1996 in the hopes of restoring localism and diversity.
• Swinging the antitrust club at Google and Facebook, which, as Sanders observed, now vacuum up some 60 percent of all digital advertising revenues. It’s not clear how any actions Sanders might take against the two internet giants would benefit journalism. He doesn’t help his cause by citing a flawed study claiming that, in 2018, “Google made $4.7 billion off reporting that Google did not pay for.” (Well, no, not really.) But there’s little question that both companies have benefited from free content provided by newspapers and other media outlets. At the very least, Sanders seems likely to support a temporary antitrust exemption that would allow the news business to negotiate some sort of revenue-sharing deal.
• Taxing targeted advertising — that is, ads served up based on the data that has been collected about you — and using it to fund “nonprofit civic-minded media.” This is an idea that has been promoted by the media-reform organization Free Press “to support local-news startups, sustain investigative projects, seed civic-engagement initiatives, and lift up diverse voices that have long been excluded from traditional media coverage.” Government funding of journalism is bound to be controversial, even though it already takes place to a limited degree with public radio and television. But there are ways to insulate such funding from political interference — though skepticism is certainly warranted.
But parts of Sanders’ plan are likely to resonate with the public — especially his targeting of Google and Facebook, which are increasingly unpopular for violating our privacy and harming democracy. Indeed, Sanders’ rival Elizabeth Warren beat Sanders to the punch by many months in proposing to break up Google, Facebook and Amazon.
One way that corporate media owners succeed in defending their turf is by controlling the terms of the debate. Thus you will hear that Sanders proposes to impose new regulations on an industry that, for the sake of the First Amendment, ought to be as unregulated as possible. But as the media scholar Robert McChesney has observed, the alternatives are not regulation or deregulation; rather, they come down to what kind of regulation we want — in the public interest, or in the corporate interest?
This is especially true in the case of broadcast media, which must be regulated because there are only a limited number of frequencies available. Sanders, to his credit, is not proposing the return of anti-free-speech policies such as the Fairness Doctrine and equal-time provisions. Rather, he seeks to ensure diversity of ownership while letting the content take care of itself.
Sanders may not like journalists very much, but he understands the importance of journalism. Far from being radical, his plan pulls together some strands that have been around for quite a while. Teddy Roosevelt would praise his stance against mergers and in favor of taking some sort of action against the monopolistic practices of Facebook and Google.
Whether Sanders becomes our next president or not, his proposals amount to a serious attempt to wrestle with the forces that have harmed journalism and have concentrated media power in the hands of a few. Voters and his fellow candidates should take notice.
The Washington Post reports some startling figures about the role of private equity firms in the retail business. According to the Post’s Abha Bhattarai:
More than 1.3 million Americans have lost their jobs in the past decade as a result of private equity ownership in retail, according to a report released Wednesday. That includes 600,000 retail workers, as well as 728,000 employees in related industries. Overall, the sector added more than 1 million jobs during that period. [my emphasis]
This is exactly what has happened to the newspaper business over the past several decades. Yes, the internet has devastated the economic model, with advertisers fleeing to Craigslist, Google and Facebook. But that’s only part of the story. The other part is that corporate chains have hollowed out newsrooms in order to maximize profits at a time when what was really needed was investment and patience.
The most notorious of the corporate raiders is MediaNews Group, formerly Digital First Media, which is owned by Alden Global Capital. MNG has all but destroyed once-great papers like The Denver Post and The Mercury News of San Jose, as U.S. Sen. Elizabeth Warren notes in her proposal to re-regulate Wall Street. Cuts continue at MNG’s Massachusetts holdings, the Boston Herald, The Sun of Lowell and the Sentinel & Enterprise of Fitchburg. Meanwhile, The Berkshire Eagle is rebuilding after a group of local business people bought the paper back from MNG.
For years we’ve been hearing that Amazon is destroying retail — yet, as the Post observes, that part of the sector not being strangled by private equity has continued to grow. Newspapers’ business problems are very real. But surely they would be shrinking a lot more slowly, and perhaps groping their way toward sustainability, if they weren’t being destroyed by our financial overlords.
A bill filed by U.S. Rep. Mark DeSaulnier, D-Calif., would make it easier for “written news organizations” to claim nonprofit status, “allowing them to focus on content instead of profit margins and reduce their tax burden.”
The bill, H.R. 3126, has been endorsed by the News Media Alliance, the National Newspaper Association, the American Society of News Editors, the Associated Press Media Editors, the Association of Alternative Newsmedia, the California News Publishers Association, Free Press Action and the Open Markets Institute.
Nonprofit news is nothing new — organizations ranging from public media to hyperlocal community websites have nonprofit status. Donors are able to write off contributions, and the news organizations themselves are exempt from most taxes.
But it’s not easy. Back in 2013, I wrote that the IRS had virtually stopped granting 501(c)(3) nonprofit status to startup news organizations as it wrestled with the question of whether journalism was among the educational activities envisioned under the tax code.
Though it’s my understanding that the agency has loosened up since then, questions remain. For instance, The Salt Lake Tribune recently announced that it would seek nonprofit status, which would make it the first regional newspaper to do so. Writing at the Nieman Lab, though, Christine Schmidt and Joshua Benton wondered whether the Tribune would run into trouble for its coverage of professional sports and the restaurant scene, which would appear to fall outside the IRS guidelines.
On the other hand, Paul Bass, the founder of the New Haven Independent, a 13-year-old nonprofit news project, told me recently that the only guidance he ever received was that the Independent could not endorse political candidates or lobby the government.
Presumably DeSaulnier’s bill will help clear up those issues. And a personal note: I played a very small role in crafting the legislation. DeSaulnier and I discussed his ideas last fall, and I suggested to his office — unsuccessfully — that the bill not be restricted to “written” forms of journalism.
The legislation is one of two stories in the news right now about the future of local journalism. The other is a proposal by the newspaper industry to suspend antitrust laws so that they may negotiate collectively with social media platforms in an attempt to obtain payment for the use of their content.
The News Media Alliance, the newspaper business’ principal lobbying group, released a study this week claiming that Google and Facebook made $4.7 billion in 2018 through its uncompensated use of material that originally was published on newspaper websites.
You can read the full text of Rep. DeSaulnier’s bill to encourage nonprofit journalism by clicking here. The text of his office’s press release is below.
June 6, 2019 | Press Release
Washington, DC – Today, Congressman Mark DeSaulnier (CA-11) announced the introduction of the Saving Local News Act (H.R. 3126), a bill to recognize newspapers as a public good and make it easier for written news organizations to become non-profits – allowing them to focus on content instead of profit margins and reduce their tax burden. The bill is supported by the News Media Alliance, the National Newspaper Association, the American Society of News Editors, the Associated Press Media Editors, the Association of Alternative Newsmedia, the California News Publishers Association, Free Press Action, and the Open Markets Institute.
“Local journalism has been a bedrock of American society for over 200 years. I remember when dedicated reporters sat in the front row of city council meetings to keep communities informed and to increase accountability. Today many local newspapers are dying out – penny pinching until they close or are bought up and sold off piecemeal by hedge funds. This bill would allow papers to renew their focus on quality content and flourish unencumbered by ever-increasing demands for greater profits,” said Congressman DeSaulnier.
“We commend Congressman DeSaulnier for introducing this important piece of legislation that recognizes the importance of nonprofit journalism to the American society. At a time when news deserts are a growing concern, we must ensure that we support all newsrooms in their efforts to provide high-quality journalism to their local communities. This journalism bill that would allow non-profit newsrooms to treat advertising revenue as nontaxable income could be helpful to a number of publishers,” said David Chavern, President and CEO, News Media Alliance.
“News organizations today must explore a wide array of avenues for sustainability, one of them being non-profit status. But the federal law lays many trip wires along this path, including the way advertising is taxed. The non-profit route could be attractive for some newspapers if and only if Congress recognizes that even a non-profit newspaper still needs good revenue sources. This proposal by Congressman DeSaulnier will open up new possibilities for sustaining quality journalism in American communities. We appreciate the concept and, even more, we welcome the interest from an important member of Congress in helping newspapers that are at risk to survive,” said Andrew Johnson, President, National Newspaper Association.
“This legislation carries the promise of helping news outlets large and small, in big cities and small towns, throughout the country. It will allow for innovation into new models of journalism and carries significant potential to address the growing problem of ‘news deserts’ around the country where the for-profit model is not sustainable,” said Angie Muhs, President, Associated Press Media Editors.
“The nonprofit model of journalism may well be one viable future of journalism, at least where smaller publications are involved. This is a constant topic of discussion among our membership which is why our organization welcomes this legislation as a means of increasing the likelihood that those who choose can convert themselves to non-profit status, while maintaining a strong journalistic enterprise,” said Molly Willmott, President, Association of Alternative Newsmedia.
“At a time when editors around the country continue to see newsrooms shrink in the face of financial constraints, we welcome every avenue to greater revenue. This legislation offers significant assistance that will allow news organizations to survive without constraining their actual journalism in any way,” said Nancy Barnes, President, American Society of News Editors.
“Community newspapers are woven into the fabric of American society and provide accurate and trusted information that improves the lives of individuals in the communities they serve. It is no secret that newspapers face an increasing number of existential threats from online competitors which have left them with a decreasing number of revenue opportunities. This measure would provide news organizations with the means to better rise to these challenges and continue to play a vital role in their communities by holding the feet of the powerful to the fire and giving voice to the powerless,” said Jim Ewert, General Counsel, California News Publishers Association.
Since 2017, estimated daily newspaper circulation fell 11 percent from the previous year (Pew Research Center). Congressman DeSaulnier recently established a working group of dedicated Members of Congress from areas affected by a drought of high-quality journalism. Together they have been working to highlight this crisis and bring attention to the need to promote local journalism, including by holding a Special Order on the floor of the U.S. House of Representatives and introducing the Journalism Competition and Preservation Act (H.R. 2054), a bill to create a temporary safe harbor from anti-trust laws to allow news organizations to join together to negotiate with dominant online platforms to get a fair share of advertising profits.
GateHouse Media will partner with Google News on a digital-subscriptions project, according to this internal email from GateHouse chief executive Kirk Davis, forwarded to me by a trusted source just a few minutes ago. The news follows Tuesday’s announcement that Google News will partner with the McClatchy chain.
The GateHouse experiment will take place at The Columbus Dispatch, followed by “a broad roll-out of our Digital Subscription Lab learnings across the GateHouse network.” GateHouse, as you know, owns more than 100 newspapers in Greater Boston and beyond, including the Providence Journal and the Telegram & Gazette of Worcester.
Certainly I would rather that Google put its efforts (and its money) into helping independent local news projects. But Google wants content, and the corporate chains are in the best position to give them that. Davis’ full email follows.
To: All GateHouse Media employees
From: Kirk Davis, CEO, GateHouse Media
Re: Google News Initiative Digital Subscriptions Lab
Date: March 27, 2019
Developing a sustainable digital subscription model to showcase the amazing work being done by our journalists across the United States is essential to preserving the vitality and viability of our local journalism. Which is why I’m thrilled to announce that GateHouse has been selected, as one of eight publishers, to participate in the Digital Subscriptions Lab, a partnership between the Google News Initiative, the Local Media Association and FTI Consulting.
This intensive six-month program will address every step of the digital subscription process from discovery to conversion to retention. Participants will receive dedicated 1:1 support from each of the three partners, as they leverage their respective capabilities in research, product, technology and analytics. Several in-person meetings over the course of the program will enable participating publishers to share strategies, insights and best practices.
We have selected The Columbus Dispatch to be the focus for our engagement; with 13,000 digital subs, The Dispatch is among our largest, paid digital subscription products. We anticipate a broad roll-out of our Digital Subscription Lab learnings across the GateHouse network. Our participation in this elite program is exciting; it reflects our very strong commitment to the future of community journalism!
In just a few years, #fakenews has moved to the top of what we worry about when we worry about the news media.
Recently the Shorenstein Center on Media, Politics and Public Policy, based at Harvard’s Kennedy School, released a report seeking to document efforts to fight fake news, from Facebook, Google, and Twitter to academic institutions, from entrepreneurial start-ups to nonprofit foundations. The report, titled “The Fight Against Disinformation in the U.S.: A Landscape Analysis,” was written by Heidi Radford Legg, a journalist who is the director of special projects at Shorenstein, and Joe Kerwin, a Harvard senior.
“Trust in news has fallen dramatically and the rise in polarizing content, created to look like news, is being driven by both profiteers and malevolent players,” Radford Legg and Kerwin write. “Add to this a president that undercuts the credibility of the press on a daily basis and who has declared the press as an ‘enemy of the people.’ American journalism, already shouldering practically non-existent revenue models that have led to the decimation of quality local news, is in deep defense.” (Disclosure: My work is briefly cited in the report.)
What follows is a lightly edited email interview that I conducted with Radford Legg.
Dan Kennedy: You’ve provided a comprehensive overview of efforts to fight disinformation. What is the main takeaway? How do you hope your paper will be used?
Heidi Radford Legg: When I arrived at the Shorenstein Center, as a journalist trained to give context to a situation and who had long worked in upstart or for-profit media, I was fascinated by all the people in academia and in the foundation world who were stepping up to solve this existential crisis for our society. It became immediately clear to me that this was the story. Here was Craig Newmark, the founder of Craigslist, which essentially disrupted the newspaper classified revenue stream, giving $70 million to journalism and the fight against disinformation.
As an entrepreneurial journalist, having founded TheEditorial.com, I was all about disruption and innovation. However, we are now in this acute moment when a deluge of disinformation and misinformation plagues our information ecosystem — exponentially, thanks to this digital age. Local news revenue is being decimated, platforms are absorbing all of the attention economy dollars, and rogue players are penetrating our information pipeline. It is the perfect storm.
Thankfully, a few bold leaders have stepped in to try to put some guard rails in place while we wait for the platforms to self-regulate or be regulated. My hope is that this paper will inspire other funders and civic leaders to get involved, because the effects of disinformation and the breakdown of traditional journalism models are quickly eroding the ability to have an informed citizenry in our democracy.
Radford Legg: I wonder if Postman might think he was too cheeky about the whole thing and should have warned us more desperately — the same way climate change advocates worry we are being too apathetic about the dire risks of climate change today. I will say, it is hard not to see that we are dumbing down as a society, with our attention span reduced to nanoseconds. I know some digital experts disagree with me and think we are at a point of great societal leaps with artificial intelligence. I am not there. I would take basic education on civics and critical thinking for all Americans, and an informed citizenry, at this point. Computer code is still binary. It is based on “this equals that.” While transformative and our future, I still believe in the ethical fortitude of the human when taught critical thinking and empathy.
Kennedy: Your section on how Facebook is fighting misinformation is appropriately skeptical, yet I sense that you accept the company’s assurances that it’s sincere about its efforts. I’m wondering if your views have changed since you finished writing this report given the never-ending stream of bad news coming out of the Zuckerborg. Siva Vaidhyanathan argues in his book “Antisocial Media” that Facebook can’t be fixed because it’s working the way it was designed to work. What do you think?
Radford Legg: I tried to stay unbiased in the reporting to list actual measures being taken by platforms at the time of the writing of this paper. I had two terrific Harvard student interns this summer, Joe Kerwin and Grace Greason, who spent hours tracking the media reports on measures the platforms were taking. We would compare the PR version to news articles by Wired, BuzzFeed, The New York Times, The Washington Post, and Harvard’s Nieman Lab. You will remember that from April to August, there was a mad flurry of deplatforming of Facebook sites, scourging of Twitter accounts, and general clean-up by the social media giants — who likely knew they were being asked to testify in front of Congress in September. Our research leads up to the moment Twitter’s Jack Dorsey finally booted Alex Jones and Infowars off the site. We tried to stick to the facts.
I do think the platforms are taking steps, but what I would really like them to address is that they are now news organizations. Rather than media entertainment companies, they need to accept that they are owning the news, and it is time they begin to hire journalists and editors with a small percentage of the insane profits they reap in this new Attention Economy. This revenue, in the form of advertising fees, was what once funded local newsrooms, and that breakdown is part of the problem.
The Shorenstein Center’s Platform Accountability Project, IDLab, and Media Manipulation Case Studies Project are all working together to create a body of research and knowledge that will put pressure on the platforms and educate Congress on what is happening in the space. One way for people to join the effort is to fund our research at the Shorenstein Center. Our goal is to be at the intersection of media and politics and help inform legislation and policy around this urgent problem as we lead up to another Presidential election in 2020.
Kennedy: You describe an impressive set of initiatives by Google to help news organizations find their way toward financial sustainability and to keep disinformation out of its search results. Ultimately, though, I wonder if what Google really needs to do is work out a system of paying for the news content that it uses. I realize that’s probably outside the purview of your study, but do you have any thoughts on that?
Radford Legg: I write in the study that “one part of Google’s effort funds journalism while the other builds tools to sell back to them. Its approach is equal parts philanthropy and capitalism. Google’s tagline makes its intent clear: ‘To help journalism thrive in a digital age.’” The question remains, for whose benefit? Ours or their bottom line? I’m hoping for the former.
What I would really like to see is for the Google News Initiative, led by Richard Gingras, to fund a number of major research projects at leading media centers like ours around revenue models for local news. The Shorenstein Center’s Elizabeth Hansen has been studying membership models like the Texas Tribune and how small and medium-sized newsrooms compete in this global digital economy. Ethan Zuckerman at the MIT Media Lab is working on a project that could share ad revenue from major platforms with the journalists or outlets that wrote a particular story. Take Flint, Michigan. The journalists who broke that story should get the largest financial gain. Today, that is not the case. Google, Facebook, and any platform or major outlet profiting from the story with clicks, should help support that local journalism.
The platforms have all the access today. Facebook alone has 2 billion users and a cash balance of $41 billion and market cap of $407 billion. Google has a cash balance of $106 billion and a market cap of $731 billion. They should start to pay and hire vetted reporters and editors steeped in the tenets of journalism — to report facts and first-person accounts. One might say it is time they grow up and be the civic leaders in the room.
Kennedy: As you note, the Berkman Klein Center has documented asymmetric polarization, which shows that consumers of right-wing media are far more susceptible to disinformation than those whose sources are more mainstream or left-leaning. What can we do about this without arousing suspicions — and anger — that we are simply seeking to impose our own liberal and elitist views?
Radford Legg: Again I go back to local news. If people who are being radicalized on the web by polarized content were instead reading about the people who live next to them and consuming news about their own city’s innovation, challenges, and progress, I believe the country would be better off and less divided. Without a trusted and reliable source on the ground in their local communities, Americans are susceptible to dogma being sold by harvesters of the Attention Economy, who are polluting the information ecosystem with untruths and content intended to polarize and divide our nation.
We should work harder to be inclusive with those in other areas of the country. As reporters, the more we can cover those stories, the better for democracy. My dream is to find paths to having journalists funded in those towns who understand the people and culture, and who can bring local back into the national conversation. This will require funding, and that is where the platforms should step up.
Kennedy: We live at a time when the president himself is our leading source of disinformation, and he has managed to convince his most committed followers that he is the ultimate source of all truth. How difficult is it to fight against disinformation in such a climate?
Radford Legg: At the Shorenstein Center’s Theodore H. White Lecture, I sat at a table with a number of our Joan Shorenstein Fellows, of whom you were one. We debated this. Should we cover the president or should we ignore him and instead cover local news and stories of progress? Should we ensure that headlines don’t repeat lies? The table was divided. But at what point do we turn away from the media circus and return to the basics? What is going on in your city hall? What ideas are changing the way you live and work in your city, town, state? What can we as a nation learn from what is going on in Corning, New York, or Beaufort, North Carolina, Portland, Oregon or Maine, or McLean County, Kentucky? I am a local kid. I think that is where the lifeblood of a democracy lives.
Kennedy: Is there any hope?
Radford Legg: Always.
Today, given the dire state of revenue models for local news, we need the wealthiest and most influential to fund and promote the research and innovation experiments desperately needed today in local journalism, and we need everyone who believes in journalism to get involved, vote, and help bridge the polarization. The late Gerry Lenfest’s legacy gift in Philadelphia is a case study many of us are watching in local news. He put the fabled Philadelphia Inquirer and sister properties into a trust and endowed it with $20 million. That’s commitment to local and that is hope. Let’s hope it inspires more of the same.
Now, though, it’s Google’s turn for some long-overdue criticism. It started last week, when The New York Times reported that Barry Lynn, a critic of monopolies, had been fired by a think tank called the New American Foundation after he wrote approvingly of European antitrust regulators for hitting Google with a $2.7 billion fine. Google is a major funder of New America.
On Friday, my students and I were talking about fake news on Facebook and what to do about it. Our focus was on for-profit content farms like the ones run by those teenagers in Macedonia, who made money by promoting such fictions as Pope Francis’s endorsement of Donald Trump (he also endorsed Hillary Clinton, don’t you know) and Clinton’s pending indictment over those damn emails.
Facebook and Google had already announced they would ban such fake news sources from their advertising programs, starving them of the revenue that is their sole motivation. And we agreed that there were other steps Facebook could take as well—tweaking the algorithm to make it less likely that such crap would appear in your newsfeed, or labeling fake sources for what they are.
But then one of my students asked: What should Facebook do about Breitbart? And here is the dilemma in dealing with fake news: not all fake news is created equal. Some of it is produced in sweatshops by people who couldn’t care less about what they’re doing as long as they can get clicks and make money. And some of it is produced by ideologically motivated activists who are engaging in constitutionally protected political speech. Facebook is not the government, so it can do what it likes. But it is our leading online source for news and community, and thus its executives should tread very lightly when stepping into anything that looks like censorship.
The stakes in the raging battle over ad-blocking software are high — but they’re not quite what you might think.
On the surface, it all seems straightforward enough. In one corner are executives at struggling news organizations who want to be sure that visitors to their websites actually see the ads. Thus did the Washington Post recently experiment with blocking the ad-blockers, a development first reported by BuzzFeed.
“Many people already receive our journalism for free online, with digital advertising paying only a portion of the cost,” a Post spokesperson was quoted as saying. “Without income via subscriptions or advertising, we are unable to deliver the journalism that people coming to our site expect from us.”
In the other corner are users who are sick and tired of popups, pop-unders, scroll-across-the-screeners and other obstrusive ads that invade your privacy by tracking your interests and that, in some cases, carry spyware or malware.
“What is unlikely to fly as a long-term strategy is begging readers to load all of the 50 or so trackers and ad-loaders and popups and banners, each of which might make a publisher three cents per thousand clicks, if they are lucky,” writes Mathew Ingram at Fortune. “That business is in a death spiral, and yelling about ad blockers isn’t going to change that.”
In fact, the ad-blocking controversy is anything but a simple morality play. Nor is it a coincidence that the issue has reached a frenzied peak thanks to Apple’s decision to include ad-blocking in its iOS 9 software for iPhones and iPads. Because the real stakes are being fought not on the Internet but in the boardrooms of the giant tech companies that want to control your online experience.
Nilay Patel, editor-in-chief of The Verge, explained it last week. Essentially, it comes down to this: publishers that rely on web advertising are helping to drive revenue to Apple’s archenemy, Google, which controls much of the infrastructure for online ads. Block those ads and those publishers are more likely to run into the warm embrace of Apple, whose new Apple News platform provides a nice, safe, closed environment with ads that can’t be blocked. And Apple gets a 30 percent cut.
Facebook offers a similar service, the still-aborning Instant Articles, which allows publishers to post their content directly inside Facebook’s all-powerful newsfeed. As with Apple News, Facebook takes a cut of the action from the unblockable ads that will be displayed. It’s such an attractive proposition that the same Washington Post that’s trying to block the ad-blockers announced Tuesday that it will also publish 100 percent of its content to Facebook. Patel writes:
So it’s Apple vs. Google vs. Facebook, all with their own revenue platforms. Google has the web, Facebook has its app, and Apple has the iPhone. This is the newest and biggest war in tech going today.
And the collateral damage of that war — of Apple going after Google’s revenue platform — is going to include the web, and in particular any small publisher on the web that can’t invest in proprietary platform distribution, native advertising, and the type of media wining-and-dining it takes to secure favorable distribution deals on proprietary platforms. It is going to be a bloodbath of independent media.
As a matter of principle, I refuse to use ad-blocking software — but I turned on AdBlock while researching this article just to see what would happen. As anyone could have told me, sites loaded more quickly and with fewer distractions. ESPN.com, which is so bogged down with ad-related bloatware that it’s become virtually unreadable, was zippier than I’ve ever seen it. A small hyperlocal site that I often visit suddenly appeared ad-free, simply because the site relies on an external ad-server business that AdBlock intercepted.
Interestingly enough, Marco Arment, the creator of the best-selling ad-blocking program Peace, pulled the software from Apple’s App Store almost as soon as it was released last week. “Achieving this much success with Peace just doesn’t feel good, which I didn’t anticipate, but probably should have,” he wrote on his blog. “Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit.”
By acting as he did, Arment may have pointed the way to a possible solution. Because the problems ad-blockers are designed to solve are real, and they run a lot deeper than mere inconvenience. As Dan Gillmor recently wrote in Slate, “The advertising and tracking industries, abetted by telecommunications carriers, are investing in all kinds of technologies aimed at thwarting users’ wishes to retain some control over their online activities.”
So why not come up with a different kind of blocker — a piece of software that informs you when you’re about to access a website that fails to follow some agreed-upon list of best practices regarding privacy and user experience?
Such an arrangement may be the best way to preserve independent media on the open web. Users would be able to protect themselves from abusive adware without freeloading. And web publishers who see their traffic drop might decide it’s time to change their ways.