Digital Publishing Platforms
6 mins read

Platforms don’t owe publishers a living, but they do owe them compensation: Here’s why

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An alternative opinion about why the tech giants should be compensating publishers, and which models would work for organisations of all sizes

There’s been a great deal of discussion over the past few years about the pros and cons of various acts from countries like Australia, Canada and the UK designed to give publishers negotiating power against tech giants like Google and Facebook.

Jonathan Heawood, Executive Director of the Public Interest News Foundation sets out an alternative opinion about why the tech giants should be compensating publishers, and which models would work for organisations of all sizes.

In the last few days, Google and Meta have threatened to switch off news in Canada, where policymakers are introducing an Online News Act to compel platforms to pay publishers. Here in the UK, the Government is proposing similar legislation. The Institute of Economic Affairs – Liz Truss’s favourite think tank – has come out against these measures, and even the team at Media Voices have expressed their doubts.

Here at the Public Interest News Foundation, we believe that everyone in the UK should benefit from news that speaks to them, for them and with them. We focus on the challenges and opportunities for small, independent news providers, who have been poorly treated by both platforms and policymakers over the last few years. That’s why we launched the News for All campaign, and why we support proposals for a news media bargaining code in the UK – with some important caveats.

Platforms don’t owe publishers a living. But they do owe them compensation if they are monetising content that publishers have no choice but to share with them.

An unbalanced relationship

If news content is posted or reposted on a social media platform, search engine or news aggregator, generating engagement among users, and the platform uses that engagement to fuel its advertising revenue, then the publisher has helped the platform to make money. 

If, at the same time, the platform directs users to the publisher’s site, and the publisher turns those users into advertising or subscription revenue, then the platform has helped the publisher to make money.

We could look at this and say, ‘Fine – they’re both making money out of each other – what’s the problem?’ And maybe that’s right. Maybe there is no problem. Maybe the money is flowing perfectly properly between the platform and publishing industries.

But what if it isn’t? What if one side is capturing the lion’s share of the economic value? What if the dominant platforms are using their control of the search, social and aggregation businesses to create an uneven playing field, in which publishers are only getting crumbs from the table which is covered in food they cooked?

And what if, where platforms are paying publishers, they’re only paying the very largest publishers, who can put them under political pressure?

Misleading analogies

Some people compare platforms’ disruption of the news publishing industry to automobiles’ disruption of the horse and cart business. The argument goes: why should Henry Ford compensate the world’s carters for building cars that went faster and further than any horse?

But this is the wrong analogy. Henry Ford didn’t need horses to make money. The Ford production line wasn’t staffed by horses and Ford didn’t use spare parts from wagons to build the Model T.

The platform-publisher relationship is completely different. Cars superseded horses, but platforms and publishers depend on each other. 

Platforms need publishers to create content that attracts users. They particularly need small and specialist publishers to create the kind of niche content that is highly relevant to some users, because relevance is crucial to platforms. Without knowing what’s relevant to different users, you can’t segment your audience into demographics for microtargeting. And without microtargeting, you can’t run the programmatic ad exchanges on which the dominant platforms depend.

So, platforms need publishers, just as publishers need platforms. 

Again, a critic could challenge this. Are you sure that platforms really need publishers? Don’t the platforms tell us that news content is a trivial part of their business – that news is even a turn-off to some users?

And again, maybe that’s right. But it would be odd to take the platforms’ word for it. These companies aren’t exactly disinterested observers of the situation. Without knowing what really goes on inside their algorithms, we simply can’t say whether or not news adds value to platforms.

So, let’s find out. Let’s crack open the black box and see how significant news publishing is to the dominant search engines, social media platforms and news aggregators. Let’s find out how data and revenue are generated from news content on these different platforms. If there is surplus value, let’s see who’s capturing it. And if there is an imbalance, let’s correct it by obliging platforms to negotiate with publishers over a fair share of data and revenue.

Short and long-term fixes

Of course, we also need other measures to address the failings of the media economy. We need to regulate the digital advertising market, so that a handful of companies can’t fix prices or stifle competition by buying up or shutting out rivals. We need to ensure that vital industries like search, social and aggregation aren’t monopolies, where publishers have no option but to accept whatever terms the monopolists impose. 

The new Digital Markets Unit should have the remit and resources to take on these challenges, working alongside other competition regulators in Europe and the United States.

But these big fixes will take time, and we need to move things forward in the short term. That’s why we need a new framework for the platform-publisher relationship, modelled – to some extent – on the Australian News Media Bargaining Code (ANMBC). We can learn from the Australian experience, but we shouldn’t copy it

The ANMBC excluded publishers with turnover below AUS$150k (about £82k at today’s exchange rate), and it isn’t actually in force. The deals that were made between Google, Meta and Australian publishers were made in the shadow of the code, not through any kind of formal arrangement. 

We need to make sure that the UK code includes the smallest publishers and compels the platforms to share meaningful data with the Digital Markets Unit, which can check the deals to see whether they represent the real economic value of these transactions. If platforms don’t want to do deals with hundreds of small publishers, then they should pay into a fund to help these publishers build sustainable business models.

As a society, we need platforms and publishers. Platforms can help us connect with each other and find important information. But they don’t create that information. For that, we need publishers, large and small. And not just any publishers, but those who prioritise public interest journalism.

One thing the ANMBC got right was its definition of ‘news’ as ‘content that reports, investigates or explains (a) issues or events that are relevant in engaging Australians in public debate and in informing democratic decision-making; (b) current issues or events of public significance for Australians at a local, regional or national level.’

The ANMBC (if it was in force) would only apply to publishers who prioritise this kind of public interest journalism and exclude publishers who don’t. We should use the same principle in the UK.

A news media bargaining code won’t solve all the problems facing publishers, and we shouldn’t expect it to. We urgently need to explore subsidies and tax incentives for public interest journalism, in particular local news, as recommended by Frances Cairncross, the DCMS Select Committee and the Scottish Public Interest Journalism Working Group (of which I was a member). 

A code is just a small part of the policy framework we need to build a vibrant public sphere. But it is a necessary part of this framework, and we should get together to make sure that we have a workable code here in the UK, rather than sit around waiting for some more perfect solution that just isn’t coming.

Jonathan Heawood

Jonathan Heawood is Executive Director of the Public Interest News Foundation. Last year, PINF launched the News for All campaign to call on policymakers to support local news that adds democratic, economic and social value to local communities.

Republished with kind permission of Media Voices, a weekly look at all the news and views from across the media world.