In the age of COVID-19, people are flocking to news outlets in record numbers.
There’s only one problem: Journalism is going broke.
As the pandemic rages, publishers are facing a triple threat of plummeting advertising revenue, an economic downturn that’s hitting subscriptions, and nationwide lockdowns that make it challenging to report on the latest developments.
The existential threat — thousands of journalists have either been furloughed or laid off, and outlets across the United States, Europe and elsewhere are starting to shutter — is reigniting a long-standing feud between publishers and the duo of Google and Facebook.
In France, the competition authority ordered Google to work with newspapers over licensing fees when using their content. In Australia, politicians said they would write rules by July to force digital platforms to fork over cash if they display publishers’ material on social media.
While these moves were in the works before the current crisis, industry lobbyists and some lawmakers see them as opportunities to demand more money from Google and Facebook in support of struggling media outlets.
“Those who use [publishers’] content must pay for it,” Franck Riester, France’s culture minister, said in response to the antitrust agency’s decision against Google on April 9. “The health crisis we are going through reminds us, once again, of the essential nature in any democracy of the mission to inform.”
The tech companies have been quick to respond.
In recent weeks, Facebook and Google announced multimillion-dollar aid packages for local and national media outlets around the globe. The search giant also said it would waive fees for publishers using its ad network to prop up their flagging online revenues and, some argue, to woo skeptics who say tech companies have hurt publishers’ livelihoods.
“It’s no accident it’s France and Australia where you see this happening,” said Rasmus Kleis Nielsen, director of the Reuters Institute for the Study of Journalism at the University of Oxford, who added that local politicians in both countries have been more willing than lawmakers elsewhere to target the digital platforms.
“Countries like Germany where there’s a lot of political sympathy for that argument will likely follow,” he added. “It’s where publishers have been aggressively fighting their corner.”
From the frying pan to the fire
The global public health crisis did not start this political fight.
For years, media outlets have complained that tech giants siphoned off advertising revenue and users’ personal data in ways that hurt their bottom line. The European Union’s controversial copyright rules, passed just over a year ago, also have given newspapers new ammunition to demand payment when their content shows up on Google News or on Facebook.
The platforms deny these accusations. They claim online advertising spending — still the lifeblood of many outlets — has shifted to social media as people’s attention has moved from news sites to Google and Facebook. The companies also argue their platforms, used by billions of people worldwide, allow media outlets to quickly reach new readers in ways not imaginable before the social media era.
These arguments, so far, have gone down better in the U.S. than elsewhere, particularly in Europe where publishers have lobbied heavily to reduce the tech companies’ perceived dominance over key industries like online advertising.
Yet COVID-19 has turned up the pressure in this “frenemy” relationship between the media and digital platforms.
Widespread lockdowns have brought sales of many print publications to a grinding halt. Digital advertising revenue, on average, is expected to fall by up to 25 percent over the next three months, according to a survey of advertising executives by the Interactive Advertising Bureau (IAB), a trade body.
And just as worrying, almost three out of four corporate advertising buyers polled by the IAB said they would change how much they spend on media campaigns because of the oncoming recession.
“This is an entirely different beast,” said David Cohen, the IAB’s president, when asked how the current slowdown compared with the 2008 global financial crisis. “We’re in a time when news has never been more important, but advertising support is declining.”
Let the lobbying commence
Angela Mills Wade is no stranger to this fight.
As executive director of the European Publishers’ Council, a trade body whose members include News UK, the New York Times and Axel Springer (a co-owner of POLITICO’s European edition), she has seen the industry struggle to change its ways long before the global pandemic.
“What the crisis has exposed is the underlying trends in the industry,” she said. “Advertising has always been part of the mix for companies. It’s really important that there’s some way to fund content for citizens, free at the point of access, for media brands that people trust.”
Mills Wade, a frequent critic of the tech giants, said the current online advertising world — dominated by Google and Facebook — had left publishers at a disadvantage, and that regulators now must step in to alter the balance.
With officials in Brussels and other capitals increasingly warning about the potential life-threatening effects of coronavirus misinformation, she said the importance of an independent media industry has quickly become clear for policymakers.
“A crisis is always good for people to understand what’s happening,” Mills Wade said. “That’s helping the European Commission understand the commercial situation that news media finds itself in.”
Executives at both Google and Facebook argue that, in times of crisis, they’ve pulled out the stops to support publishers.
Since 2016, they have doled out, collectively, hundreds of millions of dollars in funding and technical support for media outlets worldwide — a realization that publishers are an integral part of what people now read on social media.
In recent weeks, they’ve again reached into their pockets.
On April 15, Google created an emergency relief fund for small-scale publishers that would give them up to tens of thousands of dollars apiece to stay afloat. The search giant also said it would waive fees for larger outlets when they use the company’s global ad network. A Google spokeswoman declined to give a specific figure for how much the company would spend on both initiatives.
Last month, Facebook said it had earmarked just over $100 million, both in grants for media companies and for purchasing advertising within publications in North America and elsewhere. A spokesperson declined to say what type of advertising the social networking giant would buy.
The social networking giant also increased support for independent fact-checkers who work to debunk falsehoods across its platforms.
“We’ll continue to support the news industry during this incredibly difficult time and beyond to help build sustainable business models,” Campbell Brown, Facebook’s vice president of global news partnerships, said in a written statement in response to questions from POLITICO.
With the pandemic likely to drag on for months, if not years, many expect the lobbying on both sides to ratchet up as more publishers feel a financial squeeze, even as traffic to websites and smartphone apps soars.
For David Kaye, the United Nations’ special rapporteur for free speech, the crisis shows why well-funded publishers are more necessary than ever — and that governments may have to step in to support struggling outlets.
“My hope is that one of the things people get out of this moment is the importance of an independent media,” he said. “It truly can provide a life-or-death service.”
This article is part of POLITICO’s premium Tech policy coverage: Pro Technology. Our expert journalism and suite of policy intelligence tools allow you to seamlessly search, track and understand the developments and stakeholders shaping EU Tech policy and driving decisions impacting your industry. Email [email protected] with the code ‘TECH’ for a complimentary trial.
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