All Out Of Ideas, Legacy News Providers Ask US Gov't For The Right To Collude Against Google & Facebook

from the failure-to-adapt dept

About a month ago, Buzzfeed's founder and CEO, Jonah Peretti summed up my feelings about watching old news media organizations running around everywhere blaming Google and Facebook for their own failure to innovate:

“A lot of the traditional media players are opportunistically attacking Facebook and Google because Facebook and Google have figured out a better model for delivering information and entertaining people which is real-time, personalised, shareable and global – all these things that you can't do in broadcast and print,” he says.

“These traditional media companies have had decades of massive cashflow and they decided to stockpile that instead of investing in digital. They just kept managing earnings on their traditional businesses even though we have known for 20-plus years that the internet was going to be a big thing and now all these things have unfolded, with some surprises but in a way that was not that hard to predict. Now we are at the point where Facebook’s and Google's revenues are starting to be a substantial portion of the pie, they are attacking them, saying it is unfair.

“The truth is that Facebook and Google have always taken a long term perspective – so has Netflix, so has Amazon – that the internet would win out in the end. A lot of the big media companies always took a quarter-to-quarter perspective, a maximise earnings perspective, and that has resulted in them being in a tough position and so they attack Facebook and Google because of it.”

This is, more or less, what we've been arguing for nearly two decades. There are a ton of opportunities for these companies if they actually embraced digital -- but they did so in drips and drabs and often stupidly chasing fads, rather than actually figuring out how to deliver content that people actually wanted in a way they wanted it. So, for the past few years, they've focused on whining about how it's so gosh darn unfair that the companies who did figure it out -- Google and Facebook -- are now making lots of money.

And... now those legacy firms are seeking the nuclear option. The News Media Alliance -- formerly the Newspaper Association of America -- has spent the last few years pushing bad idea after bad idea to try to "save" the news organizations that failed to actually innovate (for example: asking Trump to whittle away fair use). We mocked the fair use proposal as complete nonsense, but in order to make it happen, the News Media Alliance is... asking the government for a special exception to antitrust law to allow its members to collude against Google and Facebook... and to generally make the internet less interesting and more expensive.

Today, the News Media Alliance – representing almost 2,000 news organizations – called on Congress to allow publishers to negotiate collectively with dominant online platforms. The objective is to permit publishers to have concrete discussions with the two dominant distributors of online news content, Google and Facebook, on business model solutions to secure the long-term availability of local journalism produced by America’s newsrooms.

Supposedly there are three goals here: to get greater copyright control over news and to create a snippet tax, to force Google and Facebook to work with news organizations on some sort of subscription program, and to get "a fair share" of revenue and user data. None of these make much sense. As Matt Schruers at the Disruptive Competition Project points out, all three of these goals have issues:

Let’s consider those three objectives: IP protection, subscriptions, and a “fair share” of revenue and data. First, news publishers do not need an antitrust exemption to lobby for more IP protection; federal law already allows it. (As I’ve noted before, News Corp. is already quite fond of doing so.)

Second, Google and Facebook are already pursuing new strategies for supporting subscriptions. The NMA proposal, however, suggests a collective turn to subscription models, removing consumers’ ability to choose among products with different business models, including ad-supported ones. Individual newspapers should have the freedom to experiment, pursuing the model best suited to their business. Consumers are best served when they can choose between competing models.

Third, Chavern wants a “fair share of revenue and data.” In pursuit of this, the NMA would make an end-run around copyright law’s fair use doctrine, which permits the indexing of content, so as to force digital services to pay for the privilege of sending traffic to their sites. As I discuss below, news publishers have tried this in Europe. It hasn’t gone well.

There are lots of other problems here as well. As Mathew Ingram pointed out, there's tremendous hubris in the NMA members thinking that they're the only ones producing quality journalism:

This sense of entitlement is at the core of what the NMA is proposing. In effect, it is suggesting that mainstream newspaper companies are the only entities capable of producing quality journalism, and therefore they deserve a get-out-of-jail-free card so they can engage in what amounts to collusion. And they are hoping Congress will see Google and Facebook as the enemy.

Here’s a thought: What if these newspaper companies had spent a little more time trying to compete over the past decade or so, instead of relying on their historic market control to keep their profits rolling in? What if more had tried to improve their websites and their mobile versions, so that users wouldn’t install ad blockers, or turn to other solutions like Facebook Instant Articles?

Every single competitive threat the newspaper industry has faced, from Craigslist to Facebook, has been visible long before it decimated the industry’s profits, and most of the newspapers in the NMA did little or nothing to deal with them until it was too late.

Indeed, some more local news organizations are already pushing back against the NMA's plans. The Local Media Consortium, which admits some overlap with NMA members, points out that this whole thing seems like the wrong approach:

First, Chavern’s position ignores the LMC’s work during the last four years forging partnerships essential to us as providers of quality local content and local business solutions. Those partnerships align the news industry – print, broadcast and ultimately digital – with tech companies in a symbiotic relationship. The LMC has provided revenue opportunities for all levels of local media – and we’ve done that while leveraging our scale to garner both the attention and respect of the tech platforms. We have built partnerships based on shared value, not entitlement.

Second, I am concerned about the mixed messages the NMA’s stance is creating within the industry and our own LMC membership. The NMA board includes several members of the LMC, and these board members may not be fully aware of our relationship with tech companies. Chavern’s op-ed suggests a lack of knowledge of the tens of millions of dollars our partnership with Google has netted the industry, or the inroads we have made influencing innovation with Google, Facebook, Apple and Yahoo

That is, the LMC is looking at new tech and innovation as an opportunity. The NMA, on the other hand, seems to be looking at it as the enemy. This is a fairly typical response for legacy industries who failed to adapt, then flail about wildly against those who succeeded, but it's never good for consumers (there's a reason we don't allow collusion to happen after all...).

Rafat Ali probably summed all of this up best:

Look, I get it. Google and Facebook are big and successful and making lots of money. And because these news organizations failed to do much to adapt (or, at best, made superficial embraces of digital), they're pissed and they blame Google and Facebook for their own failures (not unlike the recording and film industries). But that misses the point. There's a reason why this happened, and we shouldn't have the US government reward those who didn't innovate by taxing those who did. The end result would be bad for the public. It would be bad for innovation.

And, sure, I'm saying this as a news publication that is concerned about Google and Facebook's power in the market -- but it's on me to figure out how to adapt and leverage the benefits that platforms like that (and others) bring. Not to go running to the government seeking to collude with others and to cement weak business models in place. Frankly, for companies seeking to blame others rather than their own failures, it's probably best that they go out of business sooner, rather than later. Clear the field for others who are willing to innovate and embrace technology, rather than whine about it.


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  • identicon
    Anonymous Coward, 14 Jul 2017 @ 11:59am

    I'm just relieved to read an article with the words "collusion" and "US Government" and have it NOT be about Russia for once.

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 14 Jul 2017 @ 12:02pm

    Only inter-fascist wrangling: ALL of them are globalists, NONE of them for "free markets" or We The People.

    Just remove any tiny shreds of a public good here -- such as that they're even going to "the government"! It's total corporatocracy. The Constitution IS just a "goddam piece of paper", with anti-trust gutted, subsidies to Tesla, no tax enforcement, Google and other keeping hundreds of billions off-shore, endless wars against countries that haven't attacked, and so on.

    Now, to the micro-realm: "I'm saying this as a news publication that is concerned about Google and Facebook's power in the market" ... Umm, okay. Skipping that Techdirt isn't exactly "news", I just haven't noticed any such "concern" in the eight years I've been glancing in, but, uh... Glad you've changed your mind at last! (Ran across one of my old comments where I said that eventually everyone here would agree with, so that too is coming true!) -- I'll link to that whenever anyone snipes at me for being "concerned" about globalist mega-corps, but like my supporting copyright, though Masnick also claims to, somehow it's just not with the same fervor.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Jul 2017 @ 12:33pm

      Re: Only inter-fascist wrangling: ALL of them are globalists, NONE of them for "free markets" or We The People.

      Out of the blueballs just hates it when the Sherman Antitrust Act is enforced.

      reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 14 Jul 2017 @ 12:04pm

    But but but the news media has embraced technology!
    They added more advertising, hosted more malware, developed more techniques to punish those who block the harmful ads, are tone deaf about autoplaying and screen take over ads that mobile users can't move to find the close button.

    They waged a war against ad blockers, ignoring the harm they were causing to readers. They demanded ad networks create new tech to push more rather than demand they clean up the networks.

    They decided they could demand you can only see 3 articles a month unless you pay them for a digital subscription that often costs more than hard copy.

    Now that people aren't flocking to their outdated, to cute with pointless bells and whistles sites, they want everyone else to pay them. This totally isn't caused by the other large industries that managed to lobby to get the government to interfere in competition & punish those that innovated.

    Maybe if the government stopped interfering to prop up legacy industries, they would get the message to adapt or die.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 14 Jul 2017 @ 12:15pm

    I think there are plenty of ways to get people to pay. Patronage, donations, subscriptions with special content (ie: first access to new videos, real time coverage etc), partnerships with other companies to get cuts in sales, product endorsement (ie: review it and make it available with a cut to the publication), offer full documentaries and content on streaming platforms as well etc etc etc.

    It sure is easier to go after the big targets but it's a losing strategy in the long turn. Hollywood turned Netflix into one hell of a direct competitor by making it harder to license their stuff. Do news outfits want Google/Facebook to enter their damn business and screw them too instead of working to extract the best of the opportunities?

    reply to this | link to this | view in chronology ]

  • icon
    hij (profile), 14 Jul 2017 @ 12:20pm

    Penalizing Google for being fair

    Google keeps getting penalized for sending people to different sites. They must be considering the costs associated with creating or buying their own news service. If google were to take over Reuters or Bloomberg and then turn off their news focused search engine then the pucker factor in some newsrooms is going to hit the roof. The news search engine is becoming more of a liability every day. The downside is that google would have to figure out how to deal with employees that want to live like regular people as opposed to Silicon Valley kids willing to live in their offices 24/7.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Jul 2017 @ 12:39pm

    What about the news creators?

    I'm talking about the people who actually create the news. You know, the ones the reporters leech off of? If it were not for them creating news, the reporters would have nothing to report! So, who's going to pay THEM (or their estates, if they died in the creation)?

    reply to this | link to this | view in chronology ]

  • icon
    Bergman (profile), 14 Jul 2017 @ 12:44pm

    Crazy talk

    Under the novel economic theories that groups like the NMA are advancing, you could found a horse-drawn buggy company and sue the automotive industry for a share of their profits.

    I'm reminded most of the old fable about the grasshopper and the ant here. The ant worked for her prosperity, while the grasshopper played in the sun. But now we have a modern twist -- the grasshopper lobbies Congress for a law giving him a 'fair share' of what the ant worked for while the grasshopper screwed around wasting time.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Jul 2017 @ 11:45pm

      Re: Crazy talk

      Alternately, a government like Rapture from the Bioshock series... I see similar results eventually.

      reply to this | link to this | view in chronology ]

  • identicon
    Christenson, 14 Jul 2017 @ 12:57pm

    Copyright..for news?

    Feel any way you like about copyright, in practice it is being destroyed by the internet, the greatest copy machine in history.

    Let them eat cake and have copyright protection...mechanical turk will just have lots of people re-writing headlines and news articles, and their bottom lines will just drop FASTER.

    In fact, it is becoming very difficult to keep much of anything secret. The question instead is really how to decide what to pay attention to, and Google and Facebook have that answer down.

    And, thank you, Techdirt, for the news you do report. Is it slanted? Yes, but so is *everything*, and Techdirt is honest about it.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Jul 2017 @ 1:06pm

    >Only inter-fascist wrangling ...

    Yes, yes, at last, someone who gets it!

    And the periodic table is a conspiracy to push Lithium on the masses, when crack is so much more beneficial, and cheaper too.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 14 Jul 2017 @ 2:12pm

    "Fair means we get everything we want for free."

    “fair share of revenue...”

    Beyond the fair use aspect discussed in the article, I find it funny that the ones making this always seem to assume that it would only work one-way. If Google needs to pay them to 'use' their stuff, then clearly they need to pay Google for all the traffic Google sends them.

    Google benefits from their content to be sure, but they benefit from the traffic Google sends them. If the first needs to be paid for, and they really do care about 'fairness' then it only seems 'fair' that they be paying out for the second.

    For some strange reason I suspect that you'd be able to hear their screams from another country were they presented with a proposal wherein they pay out though rather than just get money for free.

    " ...and data."

    This half of the statement/demand has me rather confused and worried, as it almost sounds like they want Google to hand over traffic/user stats, which is all sorts of NO. They can make use of the data they gather, there's nothing 'fair' about ordering Google to hand over the data it gathers for them to make use of.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Jul 2017 @ 2:33pm

      Re: "Fair means we get everything we want for free."

      Google benefits from their content to be sure, but they benefit from the traffic Google sends them.

      Ah but you see, Google doesn't own that traffic for life+70, so therefore it has no "real" value. Whereas each one of my "brilliant and creative" news articles is worth at least $150,000 per copy by law, Google's traffic has no legal value and therefore doesn't deserve any revenue.

      reply to this | link to this | view in chronology ]

  • icon
    orbitalinsertion (profile), 14 Jul 2017 @ 4:04pm

    Maybe they should have thought about this well more than 20 years ago while they were busy putting each other out of business or buying each other up.

    I suppose they should stop telling you to go to their twitter and fb accounts also, because in light of this and similar actions and complaints, that is just warped. And put up a simply robots.txt for search engines.

    Maybe if some of these systems let them monetize their accounts like YouTube does. @@ I know that won't make anyone perfectly happy, since others share these things, but if an org has its own presence, a snipclipsharepost will more likely point there. (Search engines already work this way entirely.)

    Really stupid is the fact that people from all over will go to read news from completely outside their area. News which would never have been shared nationally or globally before. And if you have a decent site with good writing (or other production values), they will keep returning directly to the site. To read news that barely concerns them at all. Especially if they don't ruin old content and links for it. (It's hilarious how newspapers and TV news could keep morgues of shit for a hundred years but leaving it up on some disk space in a server is just too much.)

    Obviously some of the news organizations get this, at least a little. But when most of that industry spent decades getting dumber and less news-orientated on purpose, it isn't a surprise they find or invent conflicts when everything about their models was wrong all along, but their audience was more or less captive.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Jul 2017 @ 4:15pm

    There's only one problem I see with this. Just because they passed this flimflam 'snippet" tax in Europe, doesn't mean ti will work here. Antitrust laws exist to protect consumers, NOT to protect the news media.

    Our founding fathers must be rolling over in their respective graves over this one. It's a surefire fire to convince facebook and Google to delist them from search engines. Imagine: every search engine in the country, delisting NBC, CBS, ABC, FOX, CNN, USA Today and the list goes on and on.

    I guess they saw have well this worked with forcing Google to pay the news media in Spain. End result: Google News shut down. Here's an old axiom the news media need to adopt:

    INNOVATE OR DIE

    reply to this | link to this | view in chronology ]

  • icon
    R.H. (profile), 14 Jul 2017 @ 8:37pm

    Nuclear Option?

    I just wonder if we'll see Google preemptively pull out the "Nuclear Option" for a day or two just to show everyone what would happen. You know, drop all NMA members from the index for 24-48 hours just to see how much it hurts everyone for that to happen.

    Doing something like that in a market like the US would hurt Google but, I think they'd come out the other side without too much damage. How well would the smaller members of the NMA fare though? How much of their traffic comes from Google searches or from people using Chrome address bar auto-complete without the site in their history (that uses Google search by default)?

    As an aside, why are they bothering Facebook at all? Does Facebook post things? Every news article I've ever seen on Facebook was posted by a user. If a snippet tax becomes law, I fully expect Facebook to detect links that would be subject to it and, just like they charge pages for sending updates to all followers, grey-out the post button and note that the website requests a fee to post links to it and charge that fee straight to users (transparency for the win!) No link, should mean no money for the publisher and also, no hundreds or thousands of people clicking on the article.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 Jul 2017 @ 1:51am

      Re: Nuclear Option?

      Does Facebook post things? Every news article I've ever seen on Facebook was posted by a user.

      That is the same logic as why the are going after Google for money: Their content is why people use those sites, and therefore those companies profits should belong to them.

      They would probably demand money from Google if Google stopped listing them, because Google was sending people to sites with links to their content.

      This is a case of who has the money, and how can we get some of it for ourselves.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Jul 2017 @ 3:17am

    the exact same problems as all the entertainment type industries have! stupidity and self preservation, expecting others to do the work and them get paid and then expect new laws to give them something they are NOT entitled to, but think they are, a monopoly with no competition!!

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Edward, 15 Jul 2017 @ 3:18am

    Recall reading in this comment sections a few weeks ago one poster observing how far up Google's arse Masnick tongue is stuck. Today, I understand what that comment is about.

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 15 Jul 2017 @ 8:11am

      Re:

      Facebook, too. Masnick loves his corporate sponsors.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 Jul 2017 @ 7:59am

    All this deep thought back-and-forth over how to sell people more advertising. Too funny.

    reply to this | link to this | view in chronology ]

  • icon
    MyNameHere (profile), 15 Jul 2017 @ 1:47pm

    Distribution versus Content

    Google, Facebook, and twitter have between them created huge networks for distribution of information. In all cases, they are the distribution of other people's information.

    Under normal circumstances, if I have a distribution system that really works and I am looking for things to distribute, I sign contracts and agree to pay for the content I will be distributing. This is especially true as I would be making income including my ads with their content.

    None of these companies has the slightest interest in paying for the content they profit from. Instead, they have been a huge sucking sound source, taking the money out of the publishing world. Google along has snarfed up billions.

    Now, telling the newspapers to "nerd harder" is a nice idea, but it's not backed up with reality. Techdirt itself is a perfect example: You get plenty of visitors, but your own ad revenues are down 90% by your own admissions, corporate sponsors are nowhere to be seen, and you are pretty much down to flogging t-shirts and "daily deals" to make enough money to keep a very few people employed. Clearly the business model of "get lots of traffic from GoogFaceTwitReddit isn't working out all that well, you have lots of visitors but not much income to show.

    However, those other guys sending you the traffic? They are making bank using your site content to keep people coming back to them. Google and Facebook are literally swimming in cash and working hard as hell to find ways to get it off shore and out of the American system as quick as they can. Do you honestly think it's right? Can you look at this with a straight face and say "news harder"?

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 17 Jul 2017 @ 1:47pm

      Doesn't matter how good your content is if no-one knows it exists

      Absolutely right, Google and Facebook are grabbing all those profits and not leaving any for the poor sites they're linking to, they should just drop the links entirely so that people will go back to visiting the sites directly and cut out the 'parasitic' Google/Facebook.

      ... Remind me again, how well did that work out the last few times they got what they asked for but didn't actually want?

      As the actions of those that tried to extort Google the last few times have demonstrated they want the traffic Google sends them, they just want to be paid for it too, and last I checked most people pay for increased traffic to their business/site, not expect to be paid.

      They're trying to turn a symbiotic relationship into a parasitic one, where they get all the benefits and Google/Facebook pay all the costs and maybe enjoy some benefits of their own.

      reply to this | link to this | view in chronology ]

  • identicon
    Mike W., 16 Jul 2017 @ 3:55am

    not just lack of innovation

    I grew up in a household that subscribed to two local papers and two Sunday papers. Mom and Dad still subscribe to a local and a Sunday paper as well as about half a dozen magazines.

    Why don't I subscribe to ANY? It's not just the availability of news and info on the internet.

    The newspapers used to present the factual part of a story and let the reader decide how to interpret it or feel about it. Now they focus on the part they believe will steer you to their liberal point of view and leave out relevant facts that might cause you to develop a more understanding but opposite conclusion. They also removed bylines so you can't learn which authors to ignore because of obvious trends in their biases.

    The magazines are thinner and full of ads. There is so little content that they aren't worth the subscription fees. Worse, subscribe to one and your mailbox is filled with junk mail.

    I don't subscribe to newspapers or magazines mostly because I don't want to subsidize their mistreatment of customers.

    Surf instead,

    Mike

    reply to this | link to this | view in chronology ]


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