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Big Tech Should Pay Publishers

Australia has put forward a framework to preserve journalism and its benefits. It is past time for similar measures to be implemented in the United States.  

Photo by Mustafa Youssoufi from Pexels © 2019

An independent, strong, and diverse media ecosystem is as central to democracy as free and fair elections. However, traditional media organizations, particularly local news outlets, are under threat of extinction. By syphoning off critical ad revenue, tech giants like Facebook and Google have decimated the type of journalism needed to sustain a well-functioning democracy.   

In July, the Australian Competition and Consumer Commission released a draft news media bargaining code to address the imbalance between the digital platforms profiting from the news and the diminishing number of organizations that produce the content. The code would force Facebook and Google to confront or cooperate with media companies seeking a cut of the revenue they help generate.

While coming short of describing how news organizations will be paid, the code sets up procedures for media companies to enter negotiations with Facebook and Google. Talks can last up to three months. If the two sides fail to reach an agreement, compulsory arbitration is triggered, where a panel will hear final offers and make a binding decision. 

The future of US media depends on a similar arrangement being made. The transformative power of big tech is threatening the sustainability of quality journalism. The current system that allows platforms to feature and profit from content created by news producers without paying them directly for it needs to come to an end.

Margret Sullivan, a media columnist for The Washington Post, details the economic market collapse of US news publishers in her new book, Ghosting the News. The numbers Sullivan provides are brutal. From 2004 to 2015, nearly 2,000 newspapers have been shuttered. Between 2008 and 2017, 45 percent of newsroom staffers in the United States were laid off.

Traditional news publishers have been unable to adapt their business models to a world where 93 percent of Americans consume news online. The majority of them access news through Facebook and Google, and the two tech giants have little incentive to share the profits they rake in by commanding well over half of the United States’ digital ad revenue.

In 2018, Google alone profited to the tune of $4.77 billion off news content—nearly as much as every US news organization made from digital ads in the same year. Google paid nothing to the publishers and many of their businesses failed. Forecasts predict that tech platforms will continue to take the majority of ad growth from print publishers into the foreseeable future.

While this trend is creating vacuums of credible information, tech platforms are building out an ever more profitable information space governed by algorithms that elevate extremism and normalize division. 

Local newspapers have been hit hardest. Their decline is the biggest difference between the media landscapes before and after the rise of big tech. However, even as local outlets collapse, the United States’ trust in local reporting remains high, according to recent polls.

This is a dangerous dynamic. Malign actors have been quick to take advantage of the confidence that Americans place in local news that increasingly does not exist. For example, foreign governments are posing as newspapers with familiar, local sounding names to manipulate opinions and interfere in elections. The Senate Intelligence Committee’s report on Russian active measures found that Moscow set up 54 such accounts and pushed out over 500,000 tweets to unsuspecting communities.  

Domestic actors have also inauthentically assumed the appearance of trusted, local news outlets to create anger, annoyance, and fear for partisan gain. Since 2016, researchers and reporters have catalogued over 1,200 cases of domestic political groups using these covert tactics.

Though there have been some potentially meaningful bi-partisan efforts, namely the Journalism Competition and Preservation Act, Congress has not done enough to defend US news organizations from the impact of big tech. Platforms have profited for too long at the expense of professional journalism. And the disappearance of traditional media is undermining the ability of Americans to understand, communicate, and comprise with each other.

US legislators should take a note from their Australian counterparts and increase the bargaining power of newspapers forced to deal with big tech. News publishers negotiating with platforms like Facebook and Google should have safe harbor from the outdated government rules about consolidation and collective action that prevent them from working together to compete for their share of digital advertising profits. The economic shock dealt by the pandemic gives additional urgency to this proposal.

Australian Treasurer Josh Frydenberg has stated that their “world-leading” code is designed to give news organizations “a level playing field,” noting that “nothing less than the future of the Australian media landscape is at stake.”

The risks are just as high in the United States.

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Joseph Bodnar

Joseph Bodnar is a program assistant at the German Marshall Fund's Alliance for Securing Democracy. He is also a graduate student at American University's School of International Service.
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