The missteps underscore how misinformation continues to undermine the credibility of Silicon Valley's biggest companies. (Oct. 3, 2017) (Sign up for our free video newsletter here http://bit.ly/2n6VKPR)
If you’re reading this in print, we thank you. But chances are, you’re reading The Sun online and probably on your phone. That’s wonderful too — the scale, immediacy and flexibility of digital news has allowed us to reach more readers now than at any point in our history. But the trouble is this: The vast majority of advertising revenue online goes not to us and our fellow news organizations but to two companies: Google and Facebook. Together, the two tech giants account for three-quarters of digital advertising revenue — a more than $20 billion annual business — and their dominance is only growing. They have helped drive the growing audience for news organizations like The Sun but without providing the revenue necessary to support all the reporters, photographers, designers, editors and others who do the hard work of finding out what’s going on in the world, checking the facts, providing the context and presenting the news to our communities.
Google and Facebook occasionally pay lip service to protecting the news media goose that lays their golden eggs. This year, for example, Facebook invested modestly in a pilot program to give a few local publishers (including Sun sister paper the Chicago Tribune) coaching on how to improve their digital subscription businesses. But the power imbalance is star. On a whim, the web firms can and do change their algorithms in ways that help or hurt individual companies or the news media generally, and given the federal government’s unwillingness to rein them in on antitrust grounds, publishers have little recourse. It’s not just legacy publishers like The Sun that are feeling the squeeze; BuzzFeed founder and CEO Jonah Peretti wrote in December that “Google and Facebook are taking the vast majority of ad revenue, and paying content creators far too little for the value they deliver to users. This puts high-quality creators at a financial disadvantage, and favors publishers of cheap media: fake news, propaganda and conspiracy theories, quickly re-written stories with sensationalistic spin, shady off-shore content farms, algorithmically generated content, and pirated videos.”
Internet platforms such as Facebook and Google capture and redistribute news media companies' journalism while paying nothing to use all that content. Now news companies including the Chicago Tribune seek a waiver from Congress so they can bargain as a group with the social and search Goliaths.
Legislation sponsored this year by Rep. David Cicilline, a Rhode Island Democrat, and backed by the News Media Alliance (a consortium of news publishers, including The Sun’s parent company, the Washington Post, New York Times, Wall Street Journal, Gannett and others), is seeking to level the playing field, at least temporarily. The Journalism Competition and Preservation Act would allow a limited exemption to anti-trust laws so that news publishers could collectively negotiate with Facebook, Google and other big digital content distributors (those with more than a billion monthly active users globally) — and jointly withhold content, if necessary — to come to a fair agreement on compensation and other issues. The legislation would be effective for four years and would only cover the negotiation of provisions that are available to all content creators, not just those who are party to the talks, and it would apply equally to legacy publications and pure new media ventures.
It’s ironic that newspapers would need to worry about antitrust law, because the companies they want to negotiate with have gotten so big through the government’s indifference to the duopoly status, and since, even in one-paper towns like Baltimore (and most others), newspapers have not been in a position to exercise monopoly power for decades. But that’s where we are.
It’s not that seeking this antitrust exemption is the only thing newspapers are doing to survive in the digital world. The Sun and our peer institutions in other cities have been working hard to adapt our news, advertising and circulation models to the new reality. We’ve had notable success in growing our revenue from digital subscriptions, our newsroom is more attuned than ever to providing our readers with the information that matters to them most, and our advertising department is developing new ways to partner with our clients. Meanwhile, there’s no guarantee that the negotiations Mr. Cicilline’s bill contemplates would work. The news industry has never attempted anything like that before.
But there is a virtue to the idea that other possible solutions lack. Our democracy relies on a strong press that operates independently of the government. The shifting business of digital media puts that at risk, but so might any direct intervention by the government. This bill would take the government out of the equation and let the news media, Facebook and Google attempt to settle matters themselves. Mr. Cicilline introduced the bill in March, but it hasn’t yet gotten a hearing. We urge the new Congress to take it up.