By Dan Kennedy • The press, politics, technology, culture and other passions

Tag: Google Page 1 of 10

Illinois nears enactment of tax credits and other measures to boost local news

Illinois Gov. J.B. Pritzker. Photo (cc) 2018 by SecretName101.

The state of Illinois has taken a major step forward in trying to ease the local news crisis, with the legislature approving tax credits for publishers to hire and retain journalists; creating a 120-day cooling-off period to slow the sale of independent local news outlets to out-of-state chains; and funding scholarships for students who work at an Illinois news organization for at least two years after graduation.

Mark Caro reports for Northwestern University’s Local News Initiative that the tax credits amount to a modest $25 million over five years, but he quotes state Sen. Steve Stadelman as saying that the measure nevertheless represents a good start. “It was a tight budget year for Illinois, which always makes it difficult to pass legislation,” Stadelman, a Democrat, told Caro. “Was it as much as I wanted? No. But it showed that there’s a commitment by the state of Illinois to local journalism, and that’s significant.”

Gov. J.B. Pritzker is expected to sign the bill.

A couple of points I want to raise.

• The legislation grew out of the state’s Local Journalism Task Force, which was created by Gov. Pritzker in August 2021. Stadelman chaired that bipartisan group. Illinois was the second state to create a commission to study the local news crisis and make some recommendations. The first, you may recall, was Massachusetts; I had a hand in drafting the legislation that created it and would have been a member. But the Massachusetts commission, signed into law by then-Gov. Charlie Baker in January 2021, never got off the ground. There are some favorable rumblings coming out of Beacon Hill, though, and I hope to have better news to report at some point later this year.

• The Illinois tax credits avoid some pitfalls that developed almost immediately after New York State approved $90 million over three years. The New York credits are currently being implemented through an administrative process, and Gothamist reported recently that it’s not clear whether nonprofits and digital-only media outlets would be included, even though some prominent proponents understood that that they would be. The language is also contradictory as to whether out-of-state chains would be able to take advantage of the credits.

By contrast, the language of the Illinois legislation makes it clear that nonprofits and digital-only projects are included and that out-of-state chains are excluded.

The Illinois bill represents just part of a comprehensive package that was unveiled last February. As Caro reports, the Stadelman bill originally called for state agencies to spend half or more of their ad budget on local news outlets, but that provision was dropped.

In addition, a separate bill that would have required Google and Facebook to pay for the news that they repurpose has been put on hold depending on how things go with a similar measure in California. Forcing Big Tech to hand over some of their profits sounds appealing, but it hasn’t been working out very well elsewhere, as Facebook is getting rid of much of its news content and Google is threatening to walk away from the modest assistance it provides to journalism, such as the Google News Initiative.

Any form of government assistance for journalism has to be evaluated for whether it compromises the independence that news outlets need in order to hold public officials to account. Still, the modest action being taken in Illinois seems worth trying, at least on an experimental basis.

Leave a comment | Read comments

Apple News Plus: Promising, or just another example of promises, promises?

Photo (cc) 2019 by Lisa Main Johnson

There was a time in the not-too-distant past when news organizations were all-in on social media as a way to distribute their journalism. But that was then. In recent years, Facebook has fiddled with its algorithm repeatedly in order to play down the amount of news that will show up in users’ feeds. Actual partnerships with the likes of The Washington Post are a thing of the past. Google is unreliable. And let’s not get started with what has happened to Twitter/X, the other main source of click-throughs to news stories.

To compensate, media outlets doubled down on newsletters, which don’t drive as much traffic as social but which do have the advantage of being under their control. Of course, all this is playing out at a time when many if not most newspapers and magazines have put their journalism behind paywalls, which further degrades the value of relying on social. A click from Twitter doesn’t mean much if the clicker can’t read the story they’re interested in or — more to the point — see the ads.

Now we’re experiencing a bit of excitement over a newish platform: Apple News Plus. The free version comes preinstalled on everyone’s iPhones and Macs. For $12.99 a month, you get a whole lot more (though not The New York Times, which is skeptical).

Apple News Plus got a big boost earlier this week when Semafor media reporter Max Tani wrote a mostly favorable story. He begins with quite an anecdote about The Daily Beast, which had been on the ropes as its reliance on Facebook and Google was resulting in a dwindling number of clicks. Thanks to its partnership with Apple News Plus, though, the Beast is on track to earn between $3 million and $4 million this year, more than its own in-house subscription program.

Better yet, you don’t have to click through. Stories load instantly and in many cases are more attractive than the publications’ own websites. Tani writes:

The Beast is hardly alone in its increased reliance on the iOS [and Mac] news aggregator. The free version of Apple News has been a source of audience attention for news publishers since it launched in 2015. But while many publishers have come to the conclusion that traffic has less business value than they once thought, they’re still desperate for revenue. Executives at companies including Condé Nast, Penske Media, Vox, Hearst, and Time all told Semafor that Apple News+ has come to represent a substantial stream of direct revenue.

Which raises a question: Haven’t we been down this road before? Indeed, Facebook and Google both experimented with partnering with news organizations and republishing their content on its own platforms, but those arrangements ultimately came to a bad end. Needless to say, Apple News Plus also privileges national publications over local media outlets. Tani mentions partnerships with large regional newspapers such as The Philadelphia Inquirer and The Atlanta Journal-Constitution, but it’s hard to imagine that they’ll get down to the level of hyperlocals that cover small communities and neighborhoods.

Chris Krewson, the executive director of LION (Local Independent Online News) Publishers put it this way on Twitter: “Every time I watch this movie the ending is the same.”

Let me point out another problem. A few large newspapers, both national (principally the Times and The Wall Street Journal) and regional (including The Boston Globe and the Star Tribune of Minneapolis), have achieved profitability on the strength of digital subscriptions. Key to that is that they get all the revenue. The Globe’s non-discounted digital subscription rate of $30 a month is more than double what you’d pay Apple, and that money is being split among all of the media partners that are taking part, as well as with Apple itself.

Journalism is expensive, and news organizations with large reporting staffs need as much subscription revenue as they can get. What Apple is offering, essentially, is iTunes for news, an idea that the late David Carr was promoting 15 years ago. There are good reasons it’s never caught on — until now, maybe.

Long-term, no tech company is going to be a reliable partner for news organizations. Apple is attractive in ways that Facebook and Twitter never were: it’s not a social network, and charging subscriptions for users provides a more solid underpinning than anything the platforms offered. And of course journalism should take advantage of what Apple is offering. At this late date, I think every news executive knows the rug could be pulled out from under them at any moment. But they ought to take the money while it’s there.

Leave a comment | Read comments

Publishers sound alarm over Google’s AI search plans. But let’s dial it back a bit.

What does AI say about RFK Jr.’s anti-vax activism? Photo (cc) 2023 by Gage Skidmore.

The latest freakout inspired by artificial intelligence has hit the news business. On Tuesday, Google announced that it will merge its AI tool, Gemini, with its search engine. What that means for publishers is that someone seeking information about, say, Robert F. Kennedy Jr.’s anti-vax crusade will receive an answer right in Google rather than being prompted to click to a news source. Let’s try it:

First, I entered <Robert F. Kennedy Jr. anti-vaccine activism> in Google Search. The top five results were from The Associated Press (two), Scientific American, the Annenberg Public Policy Center and the PBS “NewsHour.” In other words, good, respectable sources of independent journalism.

Next, I entered the same search at Gemini and got this: “I’m still learning how to answer this question. In the meantime, try Google Search.” OK! But then I tried the same thing at the free version of ChatGPT, which provided the following answer:

Robert F. Kennedy Jr., son of former U.S. Senator and Attorney General Robert F. Kennedy and nephew of President John F. Kennedy, has been known for his anti-vaccine activism. He has been a prominent figure in the anti-vaccine movement, particularly regarding his views on the safety of vaccines and their alleged connection to autism.

Kennedy founded the Children’s Health Defense organization, which has been criticized for spreading misinformation about vaccines and promoting unfounded claims about their dangers. He has spoken at numerous events and rallies, advocating against vaccination and promoting alternative views on the subject.

It’s important to note that the overwhelming scientific consensus supports the safety and effectiveness of vaccines, and the alleged link between vaccines and autism has been thoroughly debunked by multiple scientific studies. Kennedy’s activism has been met with criticism from public health officials and medical professionals, who argue that his views are not supported by scientific evidence and pose a danger to public health.

I think we can agree that’s pretty good — and it includes exactly zero links to any of its sources, depriving some excellent news organizations of web traffic. I should note that, according to CNN media reporter Oliver Darcy, Google is promising to include links in Gemini, so it may end up looking something like Perplexity, an AI-powered search engine that provides plain-English answers and reliable links.

When I tried our RFK Jr. search at Perplexity, I got a very good answer — as good as ChatGPT, if not better — along with links to Wikipedia, The AP, the “NewsHour” and NBC News. But would I click on them? At the moment, I would, because of AI’s well-known proclivity for providing fake answers. At some point, though, that problem will be solved.

“This will be catastrophic to our traffic, as marketed by Google to further satisfy user queries, leaving even less incentive to click through so that we can monetize our content,” Danielle Coffey, chief executive of the News/Media Alliance, told Darcy. The alliance represents some 2,000 news publishers.

I also took a look at the internal metrics of the only news site I have access to: this one. According to Google Analytics, over the past month Media Nation received 40% of its traffic from “organic search” — that’s traffic from search engines, nearly all Google, that I didn’t boost by paying for ads on Google. And yes, that’s a lot. Next up was direct traffic (25.6%), organic social (21.2%) and referrals (12.1%), which are links from other websites.

Now, I happen to think that some of the lamentations we’re hearing from publishers are overblown. It’s fine to complain that Google is taking steps that will result in fewer clicks on your website. But how much money does that really bring in? These days, you’re likely to hit a paywall when you try to click through from a search. Programmatic ads on news sites are terrible and bring in very little money.

In the end, there is no substitute for building a relationship with your audience. For-profit publishers need to persuade their readers to become digital subscribers and local businesses to advertise. Nonprofits must convince their audience to become voluntary supporters and to raise money from underwriters, foundations, events and whatever else they can think of.

To use Media Nation as an example again: I currently have more than 2,300 subscribers who receive new posts by email. I consider those to be my most engaged readers. I don’t do much to monetize this site, although I have a modest paid supporter program, which, needless to say, you are invited to join. The future of news, though, is being built right now by serving our communities — not through Google search.

Leave a comment | Read comments

Look out, Oregon: Ken Doctor is planning a new media outlet to challenge Gannett

Eugene, Oregon. Photo (cc) 2012 by Visitor7.

The pixels were barely dry on my post about the Pulitzer Prize awarded to Lookout Santa Cruz when I learned about plans by founder Ken Doctor to launch a second Lookout Local site in Oregon’s Eugene area. The Oregonian reported last month that Lookout Eugene-Springfield will launch in late 2024 or early 2025 with a newsroom of 20, of whom 15 will be journalists. That’s more firepower than Gannett’s Eugene Register-Guard can muster. Indeed, The Oregonian published a pretty depressing report on that paper a year ago that began:

The Eugene Register-Guard, once one of the best newspapers in the region, today has no local editor, no publisher, no physical newsroom and little love from a dismayed citizenry. The news staff that once exceeded 80 now stands at six.

As was the case in Santa Cruz, California, Doctor’s reputation in the news business is standing him in good stead. He said he has already raised $2.5 million for his Oregon project and plans to scrounge up another $1.5 million. Doctor is a graduate of the University of Oregon’s journalism school, so this is something of a homecoming for him.

Doctor also has a long post up at Nieman Lab about efforts in California to bolster local news. Like longtime media analyst Jeff Jarvis, Doctor opposes efforts to extract money from Google and Facebook, noting that Meta, Facebook’s parent company, has made it clear that it doesn’t need news, and that going after Google would harm the uneasy balance between the good and bad that the company has done for (and to) journalism.

Instead, Doctor is looking to New York State, which recently created tax credits for news publishers who create and retain jobs. The key, he writes, is to ensure that those credits go to California-based publishers rather than to out-of-state conglomerates. And though he doesn’t name names, he’s presumably referring to the hedge fund Alden Global Capital, with whom he competes in Santa Cruz, and Gannett.

Leave a comment | Read comments

Local news round-up: Disturbing revelations in NH, plus pink slime and Google’s thuggish tactics

New Hampshire Statehouse in Concord. Photo (cc) 2012 by AlexiusHoratius

The Boston Globe published a story Friday about a New Hampshire state representative named Jonathan Stone, an ex-police officer who — according to recently released records that he tried to keep secret — “spoke of killing police and raping the chief’s wife and children.”

As the Globe notes, the story was broken on April 5 by Damien Fisher of InDepthNH, a nonprofit news organization that covers politics and public policy in the Granite State. Fisher’s story begins:

Republican Rep. Jon Stone’s New Hampshire law enforcement career ended when he threatened to kill fellow police officers in a shooting spree, and murder his chief after raping the chief’s wife and children, all while he was already under scrutiny for his inappropriate relationship with a teen girl, according to the internal investigation reports finally released this week.

Yikes. Fisher writes that he first filed a right-to-know request in 2020, and that the records were ordered released last month by New Hampshire’s Supreme Court. InDepthNH executive editor and founder Nancy West was a guest on our “What Works” podcast in November 2022.

In Ohio, DIY pink slime

Jack Brewster of NewsGuard, a project that tracks the rise of pink slime news sites, has written an essay for The Wall Street Journal (free link) that is at turns harrowing and hilarious. Spending just $105, he put together a website powered by artificial intelligence that’s designed to look like a local news outlet. Per his specifications, the site, which he called the Buckeye State Press, was designed with a right-wing bias, favoring Republican Senate candidate Bernie Moreno over the Democratic incumbent, U.S. Sen. Sherrod Brown.

Brewster used an Israeli-based service called Fiverr.com to build the site, which in turn was programmed by a Pakistani freelancer named Huzafa Nawaz. Brewster writes:

From there, all I had to do was answer a few questions about what kind of site I was looking for and the topics I wanted the site’s articles to cover. The domain and site hosting added an extra $25 to the total. The entire AI content farm cost me just $105, and I literally have to do nothing to operate it. It runs itself, auto-publishing dozens of articles a day based on the instructions that I gave to it.

I’ve been following developments in pink slime off and on for the past decade, and what I’ve found is that they are pretty inept. That proved to be the case with Brewster’s experiment as well — at one point his site hallucinated Brown’s attendance at a local fig festival. At some point, though, these projects are going to evolve into effective sources of political propaganda, which we all need to be concerned about.

Google plays hardball in California

As I’ve said repeatedly, I’m skeptical of legislative attempts to force Google and Facebook to pay news organizations for the journalism that they repurpose. If anything, the notion has become more nonsensical over time, as Facebook’s parent company, Meta, has made it clear that it would just as soon eliminate news content on platforms like Facebook and Threads.

Google is a different matter, but no less complicated. News publishers want money from Google, but at the same time exactly none of them add the necessary code to their sites which would make them invisible to Google, because they’re dependent on traffic from the giant search engine, too.

Still, it’s hard not to be outraged by Google’s latest tactic. According to Jeremy B. White of Politico, Google is blocking access to some local news content in parts of California as it fights against state legislation that would force them to pay news organizations. White writes:

“We have long said that this is the wrong approach to supporting journalism,” Google’s vice president for global news partnerships, Jaffer Zaidi, said in a Friday blog post. Zaidi warned the bill could “result in significant changes to the services we can offer Californians and the traffic we can provide to California publishers.”

Well, I guess so. These are the tactics of a thug, and yet another sign that the tech giants have amassed way too much power.

Leave a comment | Read comments

A smackdown over programmatic ads and why reader revenue is crucial

We are having a smackdown over an unlikely topic — programmatic ads, those low-quality ads fed to websites by a third party, nearly always Google.

At one time they were fairly lucrative and supported news organizations like The Huffington Post. But their value diminished over time. Indeed, it seemed anachronistic when The Messenger launched last year with a pretty substantial newsroom, offering free access in the hopes that it would attract a mass audience and thrive on programmatic. Its quick demise was as predictable as it was depressing.

Anyway, last week Josh Marshall, the founder and editor of the political news site Talking Points Memo, wrote a post explaining what had happened to programmatic ads over the years. He included a chart (above) showing that revenue from such ads had collapsed at TPM, from nearly $1.7 million in 2016 to just $75,000 in 2023. “As I think is pretty clear, if this is your business, you’re dead,” he wrote. “You don’t have a business.” He added that TPM had successfully pivoted to reader revenue, which was how his project had survived the programmatic meltdown.

Enter Ben Smith, the co-founder of Semafor. Smith called Marshall’s numbers “a dramatic oversimplification,” arguing that the reason TPM’s programmatic ad revenues had fallen so much was that Marshall had put much of his content behind a paywall — and even charged a higher rate for an ad-free experience, meaning that of course ad revenues were going to drop significantly. “The drop in ad revenue is a feature, not a bug, of that strategy,” Smith wrote. “Meanwhile programmatic ad rates, for instance, have actually increased — modestly — over the period that Marshall’s chart covers.”

Smith also quoted Foster Kamer, the editor-in-chief of Futurism, as calling Marshall’s post “sensationalist bs.”

Well, now! I’ve been waiting to write until Marshall responded, and on Tuesday he did. Essentially his counter-argument is that his programmatic revenues didn’t drop because of TPM’s paywall; rather, he implemented a paywall because programming revenues were dropping. He writes:

[W]e didn’t just decide this was money we didn’t need anymore. The changes we made that played a direct role in the decline were entirely in reaction to reductions in potential revenue which we knew we couldn’t sustain. While we were making those changes we still fought for every dollar we could get out of the rapidly diminishing programmatic advertising pie. The results are what you see in that chart, which not surprisingly got a lot of people’s attention.

Now, there’s no way of knowing exactly how much programmatic revenue TPM would be earning if Marshall had left the site wide open and had tried to get as much money as possible from such ads. But he guesstimated that it might be about a third of what TPM was getting in 2016 — in other words, maybe around $570,000, a significant decline from $1.7 million. “Needless to say,” Marshall adds, “no company can withstand a 2/3rds drop in a primary revenue stream.”

Noting that Kamer and Futurism really are making a go of it with programmatic, Marshall points out that certain categories such as tech and science are still able to generate decent revenues from Google ads. “There are no industry sectors for cultural polarization and societal decay, where we operate,” Marshall writes. “They also don’t face the negative premium that news publishers — in the sense of news about daily events and politics — face in a polarized age.”

My own take on all this is that Marshall’s initial post was only a little bit deceptive, and only for readers who weren’t paying attention. He laid out his paywall strategy quite clearly. It’s obvious that if your response to the cratering of programmatic is to start charging for your journalism, then your programmatic revenue is going to drop even more quickly than it otherwise would.

This is relevant, too, to local news. There’s a reason that some 2,900 newspapers have closed since 2005, and that reason is the ad revenues publishers were hoping for to support what were initially free websites never materialized. For-profit local news has become extraordinarily difficult. A few large regional newspapers, like The Boston Globe and the Star Tribune of Minneapolis, have achieved profitability through digital subscriptions, but that strategy has proven to be a pretty much a non-starter at smaller outlets. That’s why we’re seeing a major shift to nonprofit for local news.

As Marshall puts it, “who are we trying to kid here? Does anyone think that advertising — direct or programmatic — still sustains digital news organizations, especially independent ones? Really? I think the almost weekly lists of bankrupt and shuttered news outlets tells the story pretty clearly.”

Leave a comment | Read comments

The end of programmatic ads

This is mind-boggling. Josh Marshall writes that his political news and commentary site, Talking Points Memo, took in nearly $1.7 million in programmatic ad revenues in 2016 — and was down to just $75,000 in 2023. Marshall says that TPM is doing OK because he made the move to paid memberships a few years before the ad-pocalypse really set in. But it shows that the symbiotic relationship between news and the tech platforms has now completely disintegrated.

Marshall’s numbers show why for-profit news outlets can’t survive without fairly strict paywalls. They also show why nonprofit is so much more robust than for-profit — it’s easier to get money from foundations, wealthy individuals, paying members and earned income such as sponsorships and events. That’s not to say local publishers can’t succeed at selling ads to businesses in their community. But it does show that relying on third-party ads served up by Google is over.

Leave a comment | Read comments

Illinois seeks to bolster community journalism. Plus, a local news round-up.

The Illinois Statehouse. Photo (cc) 2023 by Warren LeMay.

Illinois lawmakers this week unveiled a massive package aimed at bolstering local news. According to Mark Caro of the Local News Initiative, based at Northwestern University in Chicago, the package comprises two separate bills:

The Journalism Preservation Act would require Big Tech companies such as Google and Facebook to compensate news organizations for the content that they share, display or link to on their platforms. The Strengthening Community Media Act offers a broad array of incentives, tax breaks and scholarships intended to repopulate local newsrooms. Included in that bill is a provision that calls for 120 days’ written notice before a local news organization may be sold to an out-of-state company.

As I’ve said before, I’m less than enthusiastic about going after the tech platforms, which presupposes that they are somehow stealing journalistic content without paying for it. Facebook executives have made it clear that they can live quite nicely without news. With respect to Google, media outlets find themselves in the awkward situation of demanding compensation while at the same time depending on the search giant to drive traffic to their websites. Indeed, any one of them could insert a simple line of code in their sites that would make them invisible to Google. None of them does. I would like to see Google and Facebook do more for local news, and maybe it ought to be mandated. But this bill seems like too much of a blunt instrument, as does similar legislation being pushed by Sen. Amy Klobuchar at the federal level.

The second Illinois bill includes a number of different ideas. I particularly like the proposed requirement for a 120-day notification period. As Steven Waldman, the president of Rebuild Local News, said recently on the podcast “E&P Reports,” a mandatory delay can give communities time to rally and prevent their local newspaper from falling into the hands of chain ownership.

Other provisions of the Strengthening Community Media Act would mandate that state agencies advertise with local news outlets, provide tax credits to publishers for hiring and retaining journalists, enact additional tax credits for small businesses that advertise with local outlets, and create scholarships for students who agree to work at a local Illinois news organization for two years or more.

It’s good to see action taking place at the state level given that several federal proposals in recent years have gone nowhere despite bipartisan support. It’s also notable that the proposals were drafted by Illinois’ Local Journalism Task Force, which was created in August 2021. Here in Massachusetts, legislation was signed by then-Gov. Charlie Baker way back in January 2021 to create a commission that would study local news. I had a hand in drafting that legislation and would be one of its members, but the commission has yet to get off the ground.

There are several other developments in local news that are worth taking note of.

• Gannett is making a $2 million investment in its Indianapolis Star aimed at bolstering the newsroom and the advertising sales staff. Two top Gannett executives recently appeared on “E&P Reports” about Gannett’s plans to reinvest in its properties. Unfortunately, Holly V. Hayes of the Indy Star writes, “This is the only site in the USA TODAY Network, which includes more than 200 local publications across the country, where such an investment is being made.” My hope is that if the investment leads to a boost in circulation and revenues, then it will serve as a model for what Gannett might do elsewhere.

• A new hyperlocal news project has made its debut in Boston. The Seaport Journal, a digital news outlet, covers the city’s newest neighborhood. Meanwhile, the Marblehead Beacon, one of three independent projects covering that town, has announced that it’s ending regular coverage but will continue to “pursue periodic and unique pieces, and shift away from daily, weekly, or otherwise regular articles.” A reminder: We track independent local news organizations in Massachusetts, and you can find a link to our list in the upper right corner of this website. Just look for “Mass. Indy News.”

• Local access cable television plays an important role in community journalism by carrying public meetings, providing a platform for residents to make their own media, and, in some cases, by covering the news directly. Unfortunately, cord-cutting has placed access television at risk since stations’ income is based on a fee assessed to cable providers for each subscriber. In CommonWealth Beacon, Caleb Tobin, a production technician at Holbrook Community Access and media and a junior at Stonehill College, argues in favor of Massachusetts legislation that would impose a 5% fee on streaming services. “While often viewed as a relic of the past,” Tobin writes, “the services that cable access stations provide are more important now than they’ve ever been.”

• Many thanks to Tara Henley, host of the Canadian podcast “Lean Out,” who interviewed Ellen Clegg and me about our book, “What Works in Community News.” You can listen here.

Leave a comment | Read comments

Why Google’s AI search tool could harm news publishers

Photo (cc) 2010 by Robert Scoble

The question of whether Google should pay for news is about to get a lot more complicated. The Wall Street Journal is reporting that news publishers are freaking out over a new search tool powered by artificial intelligence that Google is working on.

The problem is that current Google search protocols drive a lot of traffic to news websites, and that could change. AI-powered search may very well keep users inside Google, thus denying clicks to the originators of the journalism that users are looking for. As an example, here is what The Atlantic believes it’s up against, according to the Journal’s Keach Hagey, Miles Kruppa and Alexandra Bruell:

About 40% of the magazine’s web traffic comes from Google searches, which turn up links that users click on. A task force at the Atlantic modeled what could happen if Google integrated AI into search. It found that 75% of the time, the AI-powered search would likely provide a full answer to a user’s query and the Atlantic’s site would miss out on traffic it otherwise would have gotten.

That 40% figure is typical for news publications. And though Google executives say that they intend to roll out AI search in such a way that journalism will continue to benefit, the Journal story makes it clear that’s nothing more than a vague promise at the moment.

The AI threat comes at a time when much of the media business is pushing for passage of the Journalism Competition and Preservation Act (JCPA), which would require that Google and Facebook come to the bargaining table and reach a deal to compensate news organizations for repurposing their content. It’s a dicey proposition — Facebook has been moving away from news, and as the Journal story shows, publishers are dependent on traffic from Google even as they insist that Google ought to pay them.

Just this week, Brier Dudley of The Seattle Times wrote that the NewsGuild-CWA, the union that represents 26,000 employees at a number of news outlets, now supports the JCPA as the result of a possible tweak to the legislation that would be more explicit about protecting jobs. Brier also touted a recent study that claims the two tech giants should be paying news organizations some $12 billion a year.

Despite some bipartisan support for the JCPA, finding agreement within our dysfunctional Congress may prove impossible. And the rise of AI-based search isn’t going to make passage any easier.

Leave a comment | Read comments

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

Leave a comment | Read comments

Page 1 of 10

Powered by WordPress & Theme by Anders Norén