How Google and Facebook blackmail publishing industry
Whenever I say that Google, Facebook and the like should pay for the news and other content that fuels their platforms, it doesn’t take long before I’m asked: “If giving up this content is so bad for business, why do publishers keep doing it?”
It’s a fair question and we all know the answer: Because to turn your back on Google and Facebook is to effectively disappear from the internet — a death sentence for any digital business. And that’s precisely the problem. We should not confuse monopoly-enabled blackmail with voluntary transaction. The platforms put publishers between a rock and a hard place. Their message is simple: give up your content or give up the ghost. That isn’t a sales pitch: it’s an ultimatum.
Publishers have become dependent on traffic referred from search and social media. A recent U.K. government report found that the number of visits to news sites that originated from Google and Facebook are about equal to the number of direct visits.
On mobile devices, referrals from Google and Facebook are greater than direct traffic, and that gulf will only continue to grow as more and more people access news through intermediary in-home surveillance devices like Google Home or Amazon Echo.
Bizarrely, the platforms describe publishers’ dependence as being good for publishers. When Australia announced it will force them to pay for news, Facebook stated — without evidence — that it “sent 2.3 billion clicks … to Australian news websites at no charge” between January and June 2020.
Notwithstanding that the referrals are not “free of charge” (publishers provide a lot of content in exchange), Facebook’s statement makes no mention of the fact publishers are going out of business by the hundreds, as ad dollars and personal data flow from content producers to parasitic middlemen like Google and Facebook, that sometimes give a penny but always take a pound.
Again, the numbers don’t lie. Since Prime Minister Justin Trudeau closed the U.S. border on March 16, Facebook’s stock price more than doubled. In the same period, Google’s stock price increased by 58 per cent. Meanwhile CTV, CBC, Global, Quebecor, SaltWire, Torstar, Postmedia and many others have announced layoffs, service reductions and closures.
Obviously Facebook’s referral traffic isn’t enough to keep the lights on. Since 2006, when Facebook became available to everyone, not just students, Canada has lost some 20,000 journalists. At least 2,000 of those were lost in March and April of this year.
Since 2006, the number of people employed in Canadian private TV was cut almost in half. Even the CBC is feeling the pinch, recently announcing 130 job cuts.
Of course, these struggling content companies are not without blame; they have made plenty of bad decisions. But that doesn’t explain why publishers the world over are going broke in bunches while platforms like Facebook get rich off their content.
France’s top antitrust official recently paraphrased Google and Facebook’s terms as “a contract under which you give me all your rights for no remuneration.”
This is a bad deal for anybody, but it’s an especially bad deal for newspapers and broadcasters, who must give this content to their direct competitors, for free, only to have it used against them in the quest for digital advertising sales.
Asane person would only take this deal under duress, and that’s precisely the point. Given the choice between subsidizing their biggest competitors and effectively disappearing from the internet, publishers understandably choose the lesser evil, which at least forestalls extinction.
Governments must intervene to fix the failed digital advertising marketplace.
Canada cannot break up these U.S. companies, but we can follow France and Australia in requiring large-scale platforms to fairly compensate publishers for their content — news or otherwise.
Government can also end tax incentives to buy ads from the platforms and hold platforms legally liable for the unconscionable amount of illegal content — child sexual abuse imagery, incitements to violence, death threats, terrorist recruiting material — which they recommend to Canadians who did not seek it out.
Any other media company that promoted this vile content would end up in court, yet the likes of Facebook are held to a different standard. No wonder they can undercut Canadian publishers in the ad market. Complying with the law can be expensive. Deciding not to helps the bottom line.
If we want to have a truly free internet full of vibrant debate and a diversity of perspectives and opinion, we need to ensure it is open to full competition, and not dominated by a few behemoths who favour their own products and buy up their competitors. Because the status quo is leading to a mass extinction event that only a handful of publishers will survive.