The news wars: Will tech giants soon be coughing up big bucks for media content?

Milan Reinartz CEO at iVS

Milan Reinartz, CEO at iVS

While I still feel like a young man (on most days), I’m old enough to remember the emergence of the public internet as we know it, and with it the emergence of it, the search engines. I was a kid in Germany and still remember using Altavista and Yahoo! Search in the early days, and this new strange thing called the internet my father was talking about.

Then Google came.

Everyone started to search with Google and got Gmail accounts. I kept my Yahoo! email and it haunts me to this day with security issues and spoof mails, pretending to be me, marketing health supplements to my friends and colleagues.

But it just feels too hard to change it, so I’ve kept my Yahoo handle to this day. Largely, it does what it should for me and it’s free.

Fast forward two decades, I’ve now been working in the Internet industry for over 10 years. The landscape has developed immensely. A key issue of recent times, US and European anti-trust laws are looking to take apart major business units of Facebook, Apple, Amazon and Google (a space to watch).

Much closer to home, Australia has in February passed the News Media Bargaining Code – legislation that forces Google and Facebook to negotiate rates with news companies and pay them for content.

Or failing to come to terms, platforms could be forced to have a price set by independent arbitrators. And ripples are starting to be felt across the world all the way to the US, who might follow suit.

This was a world-first move by a federal government to protect the revenues of independent news organisations via legislation, which aims to force tech giants to pay up for what comes up in their search feeds. Will the trend of platform-based distribution prevail nonetheless, and are a few million dollars in “news fees” in one market or the other no more than the water of a duck’s back?

Or is the challenge Australia is putting to Google and Facebook on a legislative level a sentiment that is here to stay and may even meet us in Southeast Asia sooner or later?

Also Read: Ecosystem Roundup: Will Ovo complicate a gojek-Tokopedia merger?; Singapore faces talent crunch as tech giants scale up

Two sides of a coin

What felt like a very short time after the first time using Yahoo! Search, I started using Google products almost every day. For looking up facts, searching news on stocks and industries, using G-Suite for work and not to forget – Google Maps (which I’m personally a huge fan of).

Admittedly, like most people, I don’t use any other search engine than Chrome. And it serves me well. Working in the media industry, mostly with independent publishers, I have at worst considered Google as a frenemy for publishers.

Their ads suite, lead by AdSense/AdX and GAM (Google Ads Manager), have become almost irreplaceable tools for publishers’ advertising monetisation. Facebook is another story, but it also enabled a lot of publishers, i.e. gaming companies, content plays and more.

Until recently I have not given much thought to what search and social mean for media publishers and how heavy their dependence is on them.

Since listening to Pivot, a podcast by Kara Swisher and Professor Scott Gallaway, that has changed. My understanding of the role search and social plays for independent publishers, has deepened. And most importantly I’ve learned that publishers they’re not very independent at all.

In the world of media, the duopoly of Google and Facebook is not just a story of incredible success, but also a notorious one. Ultimately marketers have always used the most efficient tools available to them to reach their desired audiences at scale.

While historically, this was only achievable through a mix of TV, outdoor, newspapers and magazines – the internet and with it social media and search, engines have provided a platform to reach audiences much more efficiently.

And with eyeballs shifting heavily towards platforms, it’s only natural that independent publishers have followed to make use of the platforms to get their content in front of people.

The platforms’ arguments boiled down, are that they are simply facilitating the intention of the open internet, and as such, the consequences for news companies are a natural progression to be accepted. Vague and self-serving, yet still somewhat logical at face value.

Naturally, large independent news publishing companies may not share the same view, and with their PR and lobbying machines in play, have started to rethink their positions. This topic has long been a prominent one in Europe and the US.

Also Read: Who will benefit from America’s attacks on Chinese tech giants?

The pushback comes in many forms: lobbying government bodies, launching subscriptions and paywalls (a topic that deserves a separate article), in-housing video delivery tools (moving away from YouTube) and in some cases even boycotting Google’s ad infrastructure almost completely by working only with independent ad servers and ad tech platforms.

(I say “almost” as in the world of ad tech, it is indeed difficult to completely cut out Google as there are many layers in the buying process and Google plays a major part in each.)

Axel Springer of Germany is an example of a leading publisher that’s been cutting down on its dependence on walled gardens for quite some time.

The “grey-zones”

Let’s consider how we get our news in the first place? There are numerous studies that show that over two-thirds of the US population get their news from social, undoubtedly with Facebook and Instagram leading the charge.

How much of the remainder would be driven by Google Search is almost academic. So in terms of Search, I find this poses an interesting question – where will this go?

Facebook and Google benefit from platform users using their channels for news curation, by being able to show ads at various stages in the process. But so do the publishers, at least when the user clicks through to their pages via a web browser, AMP (accelerated mobile pages) and FBIA (Facebook Instant Articles). The devil, as usual, is in the details, so let’s go a little more micro here:

How much preview content other than headlines and images should the platforms be able to show, and at what point should they be asked to pay for showing news content? And let’s not confuse “should” with “will”. Beyond what’s perceived to be right or wrong, I believe the answer lies in assessing the leverage.

Platforms provide huge leverage for publishers and the same is true vice versa. The question is if the effort/benefit calculation can still make sense, and to what extent governments will play the role of the equaliser. Let’s not forget that Facebook and Google do not produce news, they merely act as aggregators and curation platforms, and in some cases enablers for political agendas, as we’ve seen with the Cambridge Analytica scandal that made headlines in 2018.

Such events may strengthen the argument to call for governments to intervene and protect independent journalism at its core.

Also Read: Today’s top tech news, March 22: Tech giants express concern over Singapore plan to fight fake news

So where to next …

Consumers will go where they can access their content most easily, or simply continue to do what they’re used to. Most will continue to get their news via Social or Search. However just as I’m still using my Yahoo! email handle, there are still people reading newspapers (physical or via publishers’ apps or quick links).

Undoubtedly, platforms will continue to play a major role in content distribution. And with the rise of podcasts, CTV and new platforms such as Substack, we will continue to see changes in where and how we choose to consume content.

One thing’s for sure though: quality independent news content is here to stay. And when and where publishers suffer enough financially and realise they may have recourse, they will likely push back – and government bodies will rally behind them to the extent that they can continue to exist and tell the stories of today.

Personally I find it reassuring to see awareness around this topic growing around the world. And as someone who has lived in New Zealand for over 10 years, I can comfortably give credit to the Australian government for making a bold first move.

Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. This season we are seeking op-eds, analysis and articles on food tech and sustainability. Share your opinion and earn a byline by submitting a post.

Join our e27 Telegram group, FB community or like the e27 Facebook page

Image Credit: Milan Reinartz

The post The news wars: Will tech giants soon be coughing up big bucks for media content? appeared first on e27.

,

Milan Reinartz CEO at iVS

Milan Reinartz, CEO at iVS

While I still feel like a young man (on most days), I’m old enough to remember the emergence of the public internet as we know it, and with it the emergence of it, the search engines. I was a kid in Germany and still remember using Altavista and Yahoo! Search in the early days, and this new strange thing called the internet my father was talking about.

Then Google came.

Everyone started to search with Google and got Gmail accounts. I kept my Yahoo! email and it haunts me to this day with security issues and spoof mails, pretending to be me, marketing health supplements to my friends and colleagues.

But it just feels too hard to change it, so I’ve kept my Yahoo handle to this day. Largely, it does what it should for me and it’s free.

Fast forward two decades, I’ve now been working in the Internet industry for over 10 years. The landscape has developed immensely. A key issue of recent times, US and European anti-trust laws are looking to take apart major business units of Facebook, Apple, Amazon and Google (a space to watch).

Much closer to home, Australia has in February passed the News Media Bargaining Code – legislation that forces Google and Facebook to negotiate rates with news companies and pay them for content.

Or failing to come to terms, platforms could be forced to have a price set by independent arbitrators. And ripples are starting to be felt across the world all the way to the US, who might follow suit.

This was a world-first move by a federal government to protect the revenues of independent news organisations via legislation, which aims to force tech giants to pay up for what comes up in their search feeds. Will the trend of platform-based distribution prevail nonetheless, and are a few million dollars in “news fees” in one market or the other no more than the water of a duck’s back?

Or is the challenge Australia is putting to Google and Facebook on a legislative level a sentiment that is here to stay and may even meet us in Southeast Asia sooner or later?

Also Read: Ecosystem Roundup: Will Ovo complicate a gojek-Tokopedia merger?; Singapore faces talent crunch as tech giants scale up

Two sides of a coin

What felt like a very short time after the first time using Yahoo! Search, I started using Google products almost every day. For looking up facts, searching news on stocks and industries, using G-Suite for work and not to forget – Google Maps (which I’m personally a huge fan of).

Admittedly, like most people, I don’t use any other search engine than Chrome. And it serves me well. Working in the media industry, mostly with independent publishers, I have at worst considered Google as a frenemy for publishers.

Their ads suite, lead by AdSense/AdX and GAM (Google Ads Manager), have become almost irreplaceable tools for publishers’ advertising monetisation. Facebook is another story, but it also enabled a lot of publishers, i.e. gaming companies, content plays and more.

Until recently I have not given much thought to what search and social mean for media publishers and how heavy their dependence is on them.

Since listening to Pivot, a podcast by Kara Swisher and Professor Scott Gallaway, that has changed. My understanding of the role search and social plays for independent publishers, has deepened. And most importantly I’ve learned that publishers they’re not very independent at all.

In the world of media, the duopoly of Google and Facebook is not just a story of incredible success, but also a notorious one. Ultimately marketers have always used the most efficient tools available to them to reach their desired audiences at scale.

While historically, this was only achievable through a mix of TV, outdoor, newspapers and magazines – the internet and with it social media and search, engines have provided a platform to reach audiences much more efficiently.

And with eyeballs shifting heavily towards platforms, it’s only natural that independent publishers have followed to make use of the platforms to get their content in front of people.

The platforms’ arguments boiled down, are that they are simply facilitating the intention of the open internet, and as such, the consequences for news companies are a natural progression to be accepted. Vague and self-serving, yet still somewhat logical at face value.

Naturally, large independent news publishing companies may not share the same view, and with their PR and lobbying machines in play, have started to rethink their positions. This topic has long been a prominent one in Europe and the US.

Also Read: Who will benefit from America’s attacks on Chinese tech giants?

The pushback comes in many forms: lobbying government bodies, launching subscriptions and paywalls (a topic that deserves a separate article), in-housing video delivery tools (moving away from YouTube) and in some cases even boycotting Google’s ad infrastructure almost completely by working only with independent ad servers and ad tech platforms.

(I say “almost” as in the world of ad tech, it is indeed difficult to completely cut out Google as there are many layers in the buying process and Google plays a major part in each.)

Axel Springer of Germany is an example of a leading publisher that’s been cutting down on its dependence on walled gardens for quite some time.

The “grey-zones”

Let’s consider how we get our news in the first place? There are numerous studies that show that over two-thirds of the US population get their news from social, undoubtedly with Facebook and Instagram leading the charge.

How much of the remainder would be driven by Google Search is almost academic. So in terms of Search, I find this poses an interesting question – where will this go?

Facebook and Google benefit from platform users using their channels for news curation, by being able to show ads at various stages in the process. But so do the publishers, at least when the user clicks through to their pages via a web browser, AMP (accelerated mobile pages) and FBIA (Facebook Instant Articles). The devil, as usual, is in the details, so let’s go a little more micro here:

How much preview content other than headlines and images should the platforms be able to show, and at what point should they be asked to pay for showing news content? And let’s not confuse “should” with “will”. Beyond what’s perceived to be right or wrong, I believe the answer lies in assessing the leverage.

Platforms provide huge leverage for publishers and the same is true vice versa. The question is if the effort/benefit calculation can still make sense, and to what extent governments will play the role of the equaliser. Let’s not forget that Facebook and Google do not produce news, they merely act as aggregators and curation platforms, and in some cases enablers for political agendas, as we’ve seen with the Cambridge Analytica scandal that made headlines in 2018.

Such events may strengthen the argument to call for governments to intervene and protect independent journalism at its core.

Also Read: Today’s top tech news, March 22: Tech giants express concern over Singapore plan to fight fake news

So where to next …

Consumers will go where they can access their content most easily, or simply continue to do what they’re used to. Most will continue to get their news via Social or Search. However just as I’m still using my Yahoo! email handle, there are still people reading newspapers (physical or via publishers’ apps or quick links).

Undoubtedly, platforms will continue to play a major role in content distribution. And with the rise of podcasts, CTV and new platforms such as Substack, we will continue to see changes in where and how we choose to consume content.

One thing’s for sure though: quality independent news content is here to stay. And when and where publishers suffer enough financially and realise they may have recourse, they will likely push back – and government bodies will rally behind them to the extent that they can continue to exist and tell the stories of today.

Personally I find it reassuring to see awareness around this topic growing around the world. And as someone who has lived in New Zealand for over 10 years, I can comfortably give credit to the Australian government for making a bold first move.

Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. This season we are seeking op-eds, analysis and articles on food tech and sustainability. Share your opinion and earn a byline by submitting a post.

Join our e27 Telegram group, FB community or like the e27 Facebook page

Image Credit: Milan Reinartz

The post The news wars: Will tech giants soon be coughing up big bucks for media content? appeared first on e27.

Leave a Reply