Make Google Pay for the News? Surely Not This Way

It looks increasingly like Congress is going to make moves to tighten regulation of Big Tech. The aim is to address all manner of ills, from the spread of misinformation to unfair trade practices to monopolistic behavior. Since the companies are largely operating under rules made before there even was a thing called the internet, it’s about time.

But an increasingly popular proposal to force Google and social media platforms to pay for linking to stories by news organizations demonstrates both how complicated and misunderstood the issue is. The idea is a Band-Aid solution that won’t solve journalism’s revenue needs and fails to address the monopolistic practices that force content producers to behave as the platforms would have them do.

News organizations for the most part have vastly more readers than they ever did before the internet. In pre-internet times, for example, The New York Times had a peak daily print circulation of about 1.1 million; now it boasts 130 million unique monthly readers and 3.5 million subscribers.

Great, you say. More readers means more revenue. Alas no. News organizations’ ability to earn revenue from advertising has declined precipitously. According to the Pew Research Center, advertising revenue in newspapers “fell from $37.8 billion in 2008 to $14.3 billion in 2018, a 62% decline. Newsroom employment at U.S. newspapers dropped by nearly half (47%) between 2008 and 2018, from about 71,000 workers to 38,000.”

Some news organizations like the Times and the Washington Post and the Wall Street Journal have evolved into new membership-based subscription models that seem to be working (though not without much angst along the way). The Times now has more than 1,600 journalists, more than at any time in its history. The Post has likewise gone on a hiring binge in recent years after an infusion of cash by owner Jeff Bezos. The Post is a seriously better newspaper than it was ten years ago. Politico, the politics site founded by former Times and Post reporters, built a site so successful it fetched a billion-dollar sale this week. Axios is on its way to a similar glide path. But most smaller news organizations have struggled. Many have closed – about 2,000 daily and weekly papers since 2004 – and though there are still about 7,000 newspapers in America, most are ailing.

You can see where this is going. Newspapers have seen their traditional ad-supported business models fray and fall apart, while Google, Insta, Facebook et al have grown fat and sassy. News publishers look at Google & Co.’s pots of money and cry “foul – you’ve stolen our ad dollars.” Google alone earned $147 billion in advertising last year. And that advertising is so targeted and effective and ubiquitous that, over the past 20 years these adtech companies have decimated traditional advertising platforms. Including, of course, newspapers and magazines, the formerly “mass media” of the 20^th Century. Surely reparations are in order?

In years past, such claims largely fell on deaf ears, though Facebook and Google made some token efforts at “partnerships” with the news companies to help defray the ad losses. But more recently the political tides have shifted against Big Tech in the US Congress and in other countries, and there is serious talk in both parties here about sanctions and breaking up the companies. Valuations approaching the trillions and the incredible fortunes amassed by tech billionaire founders are irresistible in concentrating the attentions of regulators and lawmakers.

In Europe and Australia, lawmakers passed laws that force the news aggregators to pay news organizations for pointing to their stories. Google fought the law in Australia last year, removing Australian news sites from its search results, but eventually came to a compromise. Now there are increasing calls in the US to similarly charge aggregators for linking to their stories. And Sen. Amy Klobuchar has introduced the “Journalism Competition and Preservation Act of 2021” in the US Senate which would allow newspapers to negotiate collectively with Big Tech to get compensation for linking to their work.

Herein lies a contradiction.

Look inside any news organization and you’ll find teams of people whose job it is to “optimize content” – not to make it better or more readable, but to attract search engines and social media notice. Search engine optimization (SEO) is one of the high black arts on the web; no one really knows how Facebook or Twitter or Instagram’s algorithms favor some content over others to spread around the web except for high priests at the companies themselves.

And though Google offers webmaster consoles and endless pronouncements about how and what webpages it will elevate in search results, it is still in the end a great big fat guessing game, one whose rules and arcane details are constantly shifting. Accordingly, last year US companies spent about $80 billion on SEO services (or rather, on the shamans of SEO who promise to bring traffic to your content), trying to jostle their wares into getting attention online.

SEO works. Story placement high on the first page of online search results or in social media feeds, is critical to determining how many people will see a story. The vast majority of readers for a given story comes not from perusing the front page of a website, but from “referrers” — other sites or searches outside the publications. And to be found, those stories need good visible placement in social media feeds and search engine results.

Many social media users are under the misunderstanding that if they are “friends” with someone, they will see that friend’s posts in their newsfeed. Not necessarily. The platforms’ algorithms assess posts and decide how many people – and who – will see them. The criteria for those assessments are entirely opaque, which explains the investment in SEO. Increasingly, though, content producers eager to get their content seen, pay social media companies like Facebook to insert their posts into reader feeds. Consequently it gets more and more difficult to get your post seen by “friends” if you haven’t paid to “promote” it.

Is there not some irony then in news organizations spending billions to get on to and better placement from these online platforms while they simultaneously attack the very platforms they’re trying to attract? Keep in mind that if news organizations are genuinely upset that Google is featuring their stories prominently in search results without compensation, they could simply block the search engine. Instead, they’re spending significant money for attracting attention. And, given that Google and Facebook provide an essential service to the publishers in getting their stories in front of people, it seems ballsy to also demand they pay for the honor of doing so.

If news orgs wanted to stop the search engines and social media platforms from linking to their work, there’s a simple technical fix that would take all of about five minutes to implement. Every website has two small files that determine which visitors are allowed to enter and which are not. A robots.txt file can be configured with one line of code to tell search engines not to index the site. An .htaccess file can block any host or IP address or visitor, again with a simple line of code.

Of course no news site would do that. Their model, whatever it is, depends on having readers. To not be findable on Facebook or Insta or Google or, to a lesser degree, Bing and some of the other search engines, would for all intents render stories invisible online. Which is, of course why it’s a problem that these platforms own their share of the web.

The early days of the web were heady with optimism for a decentralized, networked information architecture that could largely eliminate traditional gatekeepers who controlled production of and access to content. Suddenly you didn’t need printing presses to be a publisher or expensive TV studios to be a broadcaster. Over time, though, the web has hardened into what is commonly referred to as “walled gardens,” closed empires that are invisible and inaccessible to outsiders and often deeply rewarding to those who choose to come inside.

Because these empires have been so successful and grown so big – billions of users in the cases of Google and Facebook – they have come to be regarded by many as basic digital infrastructure that we can’t live without. It’s hard to imagine not using the search engines or social networks or Amazon (though it’s possible). But these are private companies, not public roadways. They seem indispensable because they are very very good at what they do. And because there’s no credible competition.

Thus we have stumbled into a new era of gatekeepers. Don’t format your SEO in the ways Google likes this week, and you’re demoted to page 172. Don’t pay Facebook to “promote” (read: buy placement for) your content, and you don’t show up in many news feeds.

But back to the news business. Pre-internet, newspapers were happy to dominate or even monopolize ad revenue in communities across the country. Now that they’ve been out-competed, they want a slice of their new competitors’ winnings. The irony is, of course, that the news industry went into the digital age with enormous advantages. News execs could see that the internet was going to transform their business. They could have innovated and led development of adtech, but they chose not to as first CraigsList replaced newspaper classified ads (Craigslist was so low-tech it now seems laughable), then the ad platforms, and finally Google and Facebook shot to dominance.

The truth is, the news industry needs Google, Facebook et al way more than the platforms need them. According to Facebook, content from the top 20 news sites accounts for only 0.57 percent of content shared on the platform.

There’s no set-in-stone tablet that says news organizations must be supported by advertising. Or that that’s the only or even best way to support journalism. Advertising has always been a problematic engine for news. Its intrusion on readers’ attentions is uninvited and often unwelcome. Its impact on less-scrupulous publishers has been corrupting. And even well-intentioned publishers have found it hard to resist influence on coverage. Moreover, advertising’s dependence on numbers and audience size mean that even in the best case, news is often more driven by ratings and clicks than it is by what’s most important or interesting or fun. What would news not driven by advertising look like? We don’t have to wonder. There’s the BBC, and in Canada the CBC. Both networks offer very different kinds of news than our ad-driven American models.

The Big Tech platforms have grown too big. They have been allowed to vertically integrate and buy up or crush budding competitors with abandon, and they are of such a size that it is increasingly unlikely any startup could survive against them. Their content algorithms are shot through with bias that promotes fake and incendiary stories and websites, and their ever-more craven grabs for personal information and data have little to do with the interests of their consumers. They own what we now regard as basic digital infrastructure which they then use to push their own products above everyone else who depends on that infrastructure. And they set the rules for how everyone else can use (or be banned from using) their products.

There are plenty of reasons to break up Big Tech. There are many ways to do it that would bust their monopoly holds and make it fairer for everyone. Forcing them to pay for the “privilege” of linking to content the creators of which are already desperate to be linked to doesn’t solve the transgressions of Big Tech even a bit. If anything, it’s anti-competitive as it would give lumbering legacy operations a leg-up over innovative young startup competitors.

And, given the tiny share of their content in the overall internet, the publishers’ bargaining position is weak. Streaming music services pay musicians a per-stream fee. But that fee is $0.00437 per stream, meaning virtually no one is getting rich from it. Do publishers imagine the platforms’ business models will grow enough to make news payouts meaningful?

But, you say, we need to do something to bulk up the resources to pay for journalism. Indeed we do. There have been numerous experiments, from micro-payments to paywalls to memberships and underwriting. There is likely not one killer app that will replace the collapsed ad revenue. On the other hand, although one could argue that much valuable reporting resources have been lost, publications are much more responsive and attentive to their audiences these days. There are many more voices. And there are some areas of journalism that are thriving, doing better journalism than before the web started.

It’s not too late to reinvent the business model. There’s a revolution coming with artificial intelligence. The possibilities for fine-tuning and customizing news at the individual reader level, the prospect of extending reporters’ work with AI tools, the ability to redefine what news is because it can be gathered and produced by new AI assistants is an enormous opportunity to develop new products. How to become essential to a consumer? Deliver information they need at the moment that it’s relevant to them, rather than being a generic broadcast-to-all model. Maybe it’s when the next bus is arriving at their location. Maybe it’s when mortgage rates go down. Whatever. Still do traditional news, but add customized personal news. Newspapers already offer segmented newsletters and alerts based on reader preference, but AI could take it to a whole new level. It requires expanding the traditional definition of journalism, but it reimagines “the news” to be essential at the personal every-day level.

And guess what? Someone’s going to do it. They’re already working on it somewhere. One early example is the AP, which has been using bots to write formulaic stories like accounts of baseball games and reporting on the daily stock market performance. But even though a reasonable prognosticator could project ahead to foresee AI opportunities for journalism, will publishers be any more forward thinking than the were when the internet came along?

People want news. They’ve shown they’re willing to pay for it. But so far news organizations haven’t shown much imagination in reinventing their model. What if, for example, publishers blocked Google and Facebook and set up a news ecosphere which would do the searching and sharing in more equitable and responsible ways? You think people would stop looking for news because they couldn’t find it on Google? Of course not. Perhaps they’d be attracted to a better user experience that eliminated the things people bitch about Facebook and Google for.

There’s an old newspaper maxim. It goes: Don’t argue with the guy who buys ink by the barrel. When newspapers owned the barrels they were happy to flex their muscles and monopolize the market. Now that ink has become pixels and they don’t control their own distribution, they’re unhappy. No kidding.

Break up Big Tech, sure, but the way to fix the news model isn’t to prop up a system that hasn’t kept up; it’s to innovate and make something better.