Tag: Google

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

Google in the dock

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

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

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

Leave a comment | Read comments

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

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

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

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

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

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

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

Photo (cc) 2010 by John Marino

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

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

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

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

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

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

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

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

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

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

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

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

The Bard of Google writes a bio of me. Hilarity ensues.

My friend Bill Mitchell sent along a bio of me that he asked Google’s Bard to write — proving, once again, that artificial intelligence may be artificial, but it sure isn’t intelligent. Throughout this short bio, Bard mixes me up with marketing guy Dan Kennedy. Here’s the whole thing, with the mistakes highlighted in blue.

Dan Kennedy is a media critic, marketing consultant, and author. He is a former media critic for the Boston Phoenix and is now a professor of journalism at Northeastern University. He is also the founder of Magnetic Marketing and the author of several books on marketing and business, including “The No B.S. Marketing Letter” and “The Magnetic Marketing System.”

Kennedy is a frequent media commentator and has appeared on CNN, CNBC, and Fox News. He is also a regular contributor to Forbes and The Huffington Post. [Note: Years ago I appeared a couple of times on CNN and once on Fox News. I don’t believe I ever wrote anything for Forbes, but I could be mistaken.]

Kennedy is a controversial figure in the media industry. He has been criticized for his outspoken views on the state of journalism and his willingness to criticize his colleagues. However, he is also respected for his knowledge of the industry and his ability to help businesses grow.

Kennedy is a graduate of the University of Massachusetts Amherst and the Boston University School of Public Communication. [A bachelor’s degree in journalism from Northeastern University and a master’s in American history from BU, but not from SPC.] He lives in Boston, Massachusetts. [Not since 1980.]

Here are some of his notable works:

* The No B.S. Marketing Letter (2009)
* The Magnetic Marketing System (2012)
* The Renegade Challenge (2016)
* The No B.S. Inner Circle (2017) [LOL.]

Way back when, Boston Globe columnist Alex Beam wrote about me, the other DK and yet another DK. At least he was trying to be funny. And I should add that I’ll be smiling all week about being called “a controversial figure in the media industry.”

Why the Internet Archive’s copyright battle is likely to come to a very bad end

The Library of Alexandria via Wikimedia Commons.

Simply as a matter of copyright law, I’m afraid that the Internet Archive — one of the most valuable corners of the internet — is about to fall off a cliff, taking with it our access to countless old websites, newspapers and other content.

Let me explain. On Monday, a federal judge in Manhattan heard opening arguments in a lawsuit brought by four major book publishers who argue that the Internet Archive is violating copyright law by digitizing books in its possession and lending them for free. Blake Brittain reports for Reuters that the proceedings did not appear to go well for the Archive, with U.S. District Judge John Koeltl asking “pointed questions.”

“You avoid the question of whether the library has the right to reproduce the book that it otherwise has the right to possess, which is really at the heart of the case,” Koeltl reportedly told the Archive’s lawyer, Joe Gratz. “The publisher has a copyright right to control reproduction.” Yikes.

The Archive ramped up its lending during the COVID-19 pandemic and has not cut back even though life has more or less returned to normal. The Archive argues that it’s doing what any library does — it’s lending books that it owns, and it’s controlling how many people can borrow a book at any given time. In other words, it’s not simply making electronic versions of its books available for mass download. That may show some desire to act responsibly on the Archive’s part, but that doesn’t make it legal.

By contrast, a library typically buys one or more hard copies of a book and lends them out, or buys the right to lend e-books to its patrons. The operative word in both cases is “buys.” Money changes hands. Publishers and authors are compensated. Buying a hard copy of a book, digitizing it without any additional payment, and then lending it out is illegal, regardless of whether the lending is controlled or not. I find it kind of stunning that the Archive would put its entire free service at risk over such an obviously wrong stand.

“If this conduct is normalized, there would be no point to the Copyright Act,” Maria Pallante, chief executive of the Association of American Publishers, told (free link) Erin Mulvaney and Jeffrey A. Trachtenberg of The Wall Street Journal. Indeed, the Journal story notes that Google won its own legal battle over Google Books only by limiting what you can find to snippets of books, not the entire text.

I should point out that the Archive is not without some powerful friends of its own. The Electronic Frontier Foundation is providing legal assistance. In addition, Inside Higher Ed published a commentary written by a number of Archive supporters who argue that the Archive is a legitimate library, and that its “controlled digital lending” system, which limits lending to one user at a time, is covered by the fair use provision of copyright law.

“The argument that the Internet Archive isn’t a library is wrong,” according to the Inside Higher Ed essay. “If this argument is accepted, the results would jeopardize the future development of digital libraries nationwide.”

Oh, and by the way: Inside Higher Ed limits users to five free articles a month before you have to pay for a subscription — which, of course, it has every right to do.

I looked up my own books and found that two of the three, “Little People” (2003) and “The Wired City” (2013), are available for borrowing. I don’t mind. Whatever economic value they had has long since expired, and if someone would like to read them for free without using a traditional library, that’s fine. But I certainly would have objected during the first couple of years after they were published. Rodale paid me a decent advance for “Little People,” which funded the time off I took in order to research and write it. “The Wired City” was published by the University of Massachusetts Press, an academic publisher that survives from sales to libraries, both in hard copy and electronic form.

The Internet Archive is a godsend. Just recently I used it to look up the original version of a New York Times editorial that prompted Sarah Palin’s unsuccessful libel suit. The Archive has also digitized nearly every print edition of The Boston Phoenix through an arrangement with Northeastern University, which holds the copyright thanks to the generosity of Stephen Mindich, the late publisher. Along with Wikipedia, the Archive is one of the last uncorrupted places on the internet.

Ideally I’d like to see the Archive work out an arrangement with the book publishers that might limit but not shut down its book-lending program. My fear, though, is that this is headed for a very bad end.

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

Photo (cc) 2008 by Nick Ares

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Catching up on some stories about local news that you might have missed

I don’t do this very often, but there are a number of important stories in local journalism that are flying by, and I want to put down a marker. No need to go into detail — just click on the links to find out more.

  • California sets aside $25 million in government money to support local journalism.
    • The move follows the creation of the New Jersey Civic Information Consortium, which this year will distribute $3 million for specific projects such as a plan to expand news coverage across Jersey City; an online radio program in Creole for the Haitian community; and an oral history on efforts to clean up drinking water in Newark.
    • Unlike New Jersey, the California initiative will be used to pay reporting fellows from the UC Berkeley Graduate School of Journalism to cover under-represented communities.
  • The Journalism Competition and Preservation Act, which would set aside antitrust law to allow news organizations to bargain collectively with Google and Facebook for compensation, was dealt a huge setback.
    • U.S. Sen. Ted Cruz, R-Texas, succeeded in adding an amendment that would make it more difficult for news organizations to moderate comments. The lead sponsor of the bill, Sen. Amy Klobuchar, D-Minn., responded by withdrawing the legislation but said she’ll be back.
    • LION (Local Independent Online News) Publishers and a number of organizations came out in opposition to the proposal, calling it “ill-advised” and “enormously problematic.” A similar law in Australia has been criticized for lining the pockets of large publishers — mainly Rupert Murdoch — while doing little for smaller players.
  • Google News Showcase, touted as a source of revenue for news outlets whose content would be featured, has been stalled because the giant platform has been unable to reach agreements with several key publishers.
    • Gannett, the country’s largest newspaper chain, was offered $6 million a year to feature journalism from its flagship USA Today  as well as its local papers, according to The Wall Street Journal. Gannett’s reported counter-demand: $300 million.
  • Speaking of Gannett, a nauseating development has surfaced in a sexual-abuse lawsuit against the company’s Democrat & Chronicle newspaper in Rochester, New York.
    • According to the independent Rochester Beacon, the company is arguing that seven former newspaper carriers who say they were molested by a supervisor should have filed for workers’ compensation at the time the alleged abuse took place.
    • The carriers were 11 and 12 years old at the time of the alleged incidents.