News companies that hold politicians accountable don’t usually turn around and ask them for a favor.
But the 2,000 companies that make up News Media Alliance are asking Congress to grant an antitrust exemption that allows them to collectively negotiate with Facebook and Google for business model changes. Our industry’s survival may depend on it.
In less than two decades, Facebook and Alphabet’s Google have become an essential part of our digital lives. In doing so, they have come to dominate digital advertising, controlling an estimated 71 percent of the $19.6 billion spent in the first quarter of this year.
Just as frustrating to news publishers is this: Google and Facebook also control much of the distribution of news online, and they make money off the journalism we pay to produce. Industry earnings reports show it is a reality that imperils quality news gathering.
The 2017 Digital News Report from the Reuters Institute found that 51 percent of Americans said they used social media to consume news. And when Americans get news online, 55 percent of them use a smartphone on which they might use Google search and see advertising placed by Google’s AdSense.
Only 16 percent of Americans pay publishers to read that news online. That’s up by 7 percent from the prior year, but much of that growth went to national news companies such as The New York Times and The Washington Post.
Regional publishers, including The Sacramento Bee, have experimented with Google’s AMP, which ensures that stories load quickly on mobile devices, a plus. But AMP doesn’t provide the same advertising revenue as a story on our website.
16% The number of Americans who pay for digital news
Journalists write headlines and provide keywords that you don’t see because they’re designed for Google’s search algorithm. Like other publishers, The Bee dedicates journalists to Facebook distribution and we write “social” headlines that grab attention. Some publishers put their content directly into Facebook’s system in a bid to find a bigger audience – think Facebook Live video coverage, for instance – but at a cost of lost revenue.
You could say that publishers have a symbiotic relationship with the technology giants, but too much of the money and control flows only to Google and Facebook.
“Because of this digital duopoly, publishers are forced to surrender their content and play by their rules on how news and information is displayed, prioritized and monetized,” the Alliance said in its Monday statement.
It costs considerable money to provide the journalism that helps protect our democracy, especially for ambitious and aggressive news organizations such as The Bee that are committed to quality investigative and accountability journalism. The Reuters Digital report points out that despite journalism’s strength at the national level, “state and local public affairs coverage generally remains a shadow of its former self.”
The Bee’s coverage of a startling rise in the region’s homeless is a good example of what it takes to produce quality journalism. We knew a much-anticipated homeless count would be released early Monday, so we started our work on the coverage the week before. We dispatched three teams of reporters and visual journalists, as well as an editorial writer and columnist, to find and interview people who are homeless in neighborhoods and suburbs throughout the region. Yet another visual journalist worked solo.
Our journalists found compelling stories of ordinary people sticking close to the neighborhoods in which they once lived. We told their stories in a written narrative, an editorial, a video and and photographs to provide context to the numbers reported Monday. It took at least a dozen people to bring this coverage to you, in time for a substantial debate about possible taxpayer-funded solutions at Tuesday’s meeting of the Sacramento County Board of Supervisors. Reporter Ellen Garrison and columnist Erika D. Smith spent hours at the meeting to provide the report and a column.
Google and Facebook won’t provide that coverage. In today’s digital world, though, they will make money from it.
That’s likely to remain the case. CNNMoney reported that legal experts give the Alliance bid only a small chance of success, and that the Alliance annoyed executives at Facebook and Google.
What we do as local media they never will be able to do. They never will have thousands and thousands of reporters covering local communities.
Rusty Coats, executive director of Local Media Consortium
Some news industry leaders prefer a more collaborative approach, pointing to changing dynamics like a new effort by Facebook to support news subscriptions and advertising through its “Instant Articles” format.
“I am concerned about the mixed messages the (Alliance) stance is creating within the news industry,” Rusty Coats, executive director of the Local Media Consortium, said via Twitter, another digital company that relies on reporters to provide news, as we depend on it for audience.
The Consortium represents more than 70 local media companies that own more than 1,600 publications. The Bee’s owner, McClatchy, is a member of the Consortium and the Alliance.
“It has nothing to do with legislation,” Coats told me. “It has to do with me sitting across from Google and saying … ‘Let’s talk about how we can work together.’ ”
“What we do as local media they never will be able to do. They never will have thousands and thousands of reporters covering local communities,” Coats said. “And (if the past is any indicator), we’re never going to develop any kick-ass technology.”
I don’t know whether the right approach is a Hail Mary plea to Congress for help, or an appeal for increased collaboration. I do know an improved business model must be urgently pursued. It’s never going to work for publishers to pay for journalism while technology companies reap the revenue and move at a sloth’s pace to change the business model. The future of news is at stake. So too is its contribution to our democracy.