Will Big Tech save journalism?

Google and Facebook are starting to pay publishers for content featured on their sites. But media economist Christian Wellbrock tells DW this might not be good news for the struggling industry.

It’s been a wild month for Facebook. Just weeks after temporarily blocking all news content in Australia, the social media giant turned around and revealed it had agreed to pay dozens of publishers in Germany for content to be featured in „Facebook News,“ a news showcase that will launch on the platform in Germany in May. 

Going forward, Facebook will help publishers „monetize their content and expand their business model in the long term and sustainably,“ said Jesper Doub, director of News Partnerships Europe at Facebook, announcing the deals last week.

Similar deals have also been struck in the US and UK. Search engine Google also recently started agreeing to pay publishers for content.

It sounds like it could finally be payday for publishing. The industry has struggled to adapt its business model to the digital era. But critics say these are deals with the devil that could ultimately do more harm than good.

Sidestepping regulation

„Strategically speaking, that’s very, very smart. Facebook gains a lot more from maintaining their market power than they lose from paying a couple of publishers,“ Christian-Mathias Wellbrock, an economist and professor for media management at the University of Cologne, tells DW. Wellbrock researches possible ways to finance journalism in the digital world.

„Facebook’s idea is to make money off of advertising, and whatever serves that goal they’re going to do,“ he says.

Antitrust regulators around the globe have been coming down with increasing force on Google and Facebook. They want to make the companies pay publishers for the journalistic content that ends up on these platforms. Until recently, it has been the norm not to pay publishers when links to their content appeared on third-party websites. Google and Facebook are doing these companies a service by exposing them to increased traffic from their users, so the argument from Big Tech goes.

But financing models for news and publishing have been upended as more and more people get their news via social media and search engines. Advertising revenue that once went to publishers has now followed readers to Google and Facebook. The duopoly won some 75% of digital advertising spending in France and Germany in 2019, according to the market research company eMarketer. Comparable figures can be found in the US, UK, and India.  

But problems arise when digital companies become the gatekeepers of information.

„If content that is relevant for the working of a democratic society is based on diversity,“ says Wellbrock, „then of course a commercial, algorithmic way of distributing personalized content isn’t going to serve the goal of people being exposed to different ideas in the public arena.“

Less innovative than it appears

The fanfare around Facebook’s German deals stands in contrast to the rebellious tone struck in Australia, where the prospect of being forced to share advertising revenue with publishers pushed Facebook to block all news content on its platform for a week. Whatever their attitude, getting Big Tech to pay up may not be the victory it seems at first glance.

„These types of deals essentially entrench the status quo,“ Wellbrock says.

With agreements now struck in Germany, Australia, the US and UK, market power is likely to stay concentrated in areas dominated by Big Tech, i.e. advertising, search, social media and messaging. And while it makes publishers more dependent on the big platforms in the long run, it also puts money in their pockets now and helps them shore up their remaining market dominance vis-a-vis smaller competitors.

It would be natural for Google and Facebook to favor content from the companies they are paying over that of smaller or emerging organizations, says Wellbrock.

Lack of alternatives

„The best thing would be if nobody signed that deal and the publishers, or even regulators, would establish a platform of their own,“ the professor says.

Alternative platforms do exist, but nothing yet on a scale that could challenge the current model.

Apple offers the subscription-based Apple News+, which gives users access to hundreds of newspapers and magazines. But it doesn’t feature all publications, and it only works within the Apple ecosystem. Other smaller services, like the magazine platform Readly, may do what they promise, but they’re not large or known enough to compete with the likes of Google and Facebook, and never will be if the tech giants can help it.

„From a journalistic or a democratic perspective, I think we need a solution that makes pretty much all journalistic content available to pretty much everybody,“ says Wellbrock.

Power in groups

Wellbrock has one idea how this might be achieved: through what he calls a „cross-publisher platform,“ a subscription-based platform that would provide access to practically all journalistic content for one flat rate.

While he can’t resist comparing it to Netflix or Spotify, this concept would be different in that it wouldn’t be a one-stop shop. Instead, a log-in through the platform would allow consumers to navigate through the paywalls and onto the websites of all participating providers.

This would be less technologically costly than merging content management systems, and it keeps the content within the brand world of the producing companies, both key concerns that publishers have when discussing such an idea, Wellbrock says.

Criteria for who can use the platform to distribute content could be based on a set of journalistic standards. An algorithm to recommend articles could be developed with an eye toward avoiding filter bubbles. The participating content providers would negotiate the revenue distribution regime.

„Such a platform would actually be a support system for two things that are vital for the working of democratic societies,“ he says. „That’s media diversity, because it would give smaller publishers a fair chance to be found on the internet. And secondly, it would make this content broadly accessible.“

Old rivalries die hard

The main difficulty is that publishers are used to seeing each other as competition. While this may be the case for national publications, regional and local publications tend to hold monopolies in the geographical areas they cover, he says.

„If all the publishers would collaborate, or if their content were accessible on one platform, essentially, I think that would actually be a good experiment to determine whether people are really willing to pay, say, €25 ($30) per month for pretty much all journalistic content that is out there,“ Wellbrock says.

„If there was a big enough competitor who could advertise saying, ‘look, we have essentially the same functions as Facebook, but our algorithm doesn’t push you into radical thinking,’ people might actually opt for that. Currently, they don’t have that choice.“

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