Is the news industry missing out on £1.9bn from platforms in the UK?
The International Festival of Journalism is taking place in Perugia, Italy this week. Thanks to live streaming of sessions, we’re keeping an eye on the big talking points for local news. Today, we dig into research claiming UK newsrooms are due far more from platforms — and how the tech giants are likely to respond
News is worth at least £1.9bn to platforms like Google, Meta and Apple in the UK, a leading figure in the industry has claimed.
Jonathan Heawood, who runs the Public Interest News Foundation, said work done in the USA to assess the true value of news to the big tech giants would, if replicated in the UK, result in a multi-billion pound figure.
The figure was put forward during a panel discussion at the International Festival of Journalism in Perugia this week.
Jonathan’s modelling was based on work done by Columbia University last year. Anya Schiffrin, from the School of Public Affairs at Columbia University, led the research with economists using an established model for economic value developed in Switzerland.
Jonathan told the audience at a panel debating the true value of news to platforms that regulation was essential to bring platforms to the table
He said: “If you take the Swiss economic model and you apply that to the UK, you get a figure of £1.9 billion.That’s that’s the nominal value of news to Google.
“You can you can question the methodology but at least it’s the beginning of a process.” And what the new regulations will do is enable us to sit down, to propose a methodology, to test that, to discover is it or is it not the right methodology? Let’s see the data. Let’s find the correct value.”
Working with economists, Anya used a randomised control trial created by experts in Switzerland, which gave users a Google with news, a normal Google and then a Google without news.
Based on that, they found that news made more of a contribution than 2%, something like 35%, Alexa, also 20% of queries were news related, although some of those results were simple informational queries, such as sports scores and stock market data.
“So we think that the amount of news that’s used is, and profited from it’s much higher than 2%,” added Anya, pointing to studies in Canada using Crowdtangle, the newsroom analytics tools Meta is about to close, which also set out to understand the value of news to platforms.
Once the value is worked out, Anya said, the challenge is how to split it between the creators — journalists — and the distributors — the platforms.
Anya added: “This is a question that economists have been working on really since the 1950s. How do you split the surplus value that comes when people work together. That’s really our mindset for thinking about what Google and Meta and the other platforms owe publishers. And if you say, a 5050 split, our finding was that in the US., Google and Meta probably owe publishers about $13 billion a year.
“We’re not saying this is the solution to save journalism. We’re saying that this is money. That’s. And it’s time to extract some of it.”
The problem with ‘crazy money’
It’s an assertion which is open to debate, not least because it doesn’t take account of the value which does flow to publishers, such as subscriptions revenue prompted by a click from a platform, or the advertising served on pages generated by a platform.
The question then becomes how to persuade the platforms to pay higher amounts they do at the moment. At the same conference, two leading news executives who have left Meta and Google in the last year, Jesper Doub and Madhav Chinnappa, looked at the view of the platforms they worked for.
Jesper, who was the director of international news partnerships at Meta until September, said: “The answer from a platform perspective is the value is none. It actually is negative. It’s a cost. And that hurts to say if you’re in news and if you spend your life in news.
“This is almost a religious discussion. And I’ve been in these discussions and you can come up with all sorts of reasonings that seem to make sense, and it’s always based on where you come from.
“If you spend your life in news you feel, I hope still, that we need journalism in our lives. We need journalism to sustain democracy and have an open and fun world that is a value in itself, and that is a civic discourse that I hope never stops. And we need to fight for this. But through the way that the whole thing was approached by demanding money and in the eyes of an exec at Facebook, crazy money.
“Facebook said, well, if you want to measure the value, take it away and see what happens. And they did. They did in Canada. They still do it today. And this is public information. Nothing happened. They took down every bit of news in Canada. Nothing happened. Some even say that the business metrics went up. That kills me.
“To Facebook, if you’re a publisher, you’re the one putting your stuff up there. If you don’t like the outcome or your result, don’t put it up there. Facebook is in position to say we are not doing anything. We’re not scraping. We’re not collecting. If you don’t think this is a fair deal, just don’t.”
Madhav, who was director of news ecosystems at Google and helped established schemes such as the Google News Initiative which has funded many journalism projects in UK, said: “I think that it’s very, very hard to value it. I’ve been involved in things on, on the Google side and it is hard and it’s also trying to relay the long term impact is close to impossible. Nobody knows.
“But the one thing that I do know is that the value that the publishing ecosystem put it at, and any kind of reasonable view of it, is far away.
“As somebody very smart said, if you force a company to pay for something that they don’t want or value. They’re just going to take less of it, right?”
Jonathan, however, remains optimistic that the pending arrival of new legislation in the UK will help the sector. The Markets, Competition and Consumers Act, currently working its way through Parliament, is due its final stage in the House of Commons on April 30. That will create a new regulator for the tech platforms, the Digital Markets Unit.
The unit will regulate the biggest tech firms, such as Google, Meta and Apple, and their impact across the whole economy, not just the news sector. This makes it far more sweeping than other global examples, such the bargaining code created by Australian law, or Canadian demands from legislators that platforms do more to support news.
Jonathan said: “There you have a very particular tech news face-off kind of win-lose battle.
“This is about the big tech firms being good economic citizens, and it’s really getting at the heart of their monopoly power, and it’s forcing them to be more competitive and to allow competition and so allow startups.
“It’s a big, big, big sweeping law, and the news relationship is only a very small part of it.”
A chance for small publishers?
While larger publishers have been able to create deals with Google and Meta in particular, smaller publishers have struggled to get any money at all.
Jonathan added: “One important point to make is that many of these outlets only exist thanks to the digital revolution, and in particular thanks to Google and Facebook. They would not have been able to find audiences to build communities around their work without those functions.
“I think there can be a win-win. Journalism does something fundamentally important, particularly the kind of small, niche local investigative journalism that we support. Tech also does something really important. Let’s find the win win.”
In the future “platforms, which have news as part of their business, will have to negotiate with news providers, and the news providers can bargain collectively,” Jonathan added.
Which will bring the question of the value of news up. Citing the £1.9bn figure, Jonathan said: “This is tough because we are flying blind on our side of the table because we don’t have access to the data. One great thing about the new arrangement is that the regulator will be able to lift the lid and ask the platforms for access to relevant data, so that we can actually see for real how much traffic is generated by news, and how is that monetised, and how to advertisers and others behave in a way that we can then actually start to look at these formulas and test them in reality.”
Lack of transparency, Anya said, has made such fact-based discussions impossible with platforms. “Google and Meta really reject the idea [of paying for news]. It’s almost like they belong to a different religion than I do. Their attitude is we’re sending traffic and stop complaining. There’s no copyright. This is all fair use.”
Experiences vary around the world on trying to establish a fairer share of revenue between platforms and publishers, but Anya said commonalities exists globally in how platforms address the issue.
“They do three things. They give money to publishers individually, hoping to kind of split the class and get them to oppose new regulation. They lobby governments very intensively, And then they also threaten to pull news.”
If other examples around the world are anything to go by, there is likely to be a bumpy road ahead if the DMU demands platforms making use of news pay more.
From champagne to being frozen out
Australia was at the forefront of ‘make platforms pay’ debate, as it pushed through a Bargaining Code which would see big platforms made to pay for news if they didn’t agree a deal.
Misha Ketchell, Editor of the Conversation in Australia and New Zealand, speaking at the value of news panel, said: “The Australian law was designed to extract some funding for journalism from Facebook and Google that were the two named, companies. We negotiated a deal with Google.
“Facebook, by contrast, just totally refused to negotiate at all. Facebook, as part of the negotiation process when the laws were being brought in, removed news that included news about emergency services. It was a big controversy and it backfired as a PR thing.
“Facebook suffered a lot through a lot of sort of reputational damage at the point of that negotiation. Interestingly, in the lead up, Facebook was playing very nice.
“So if you go back 10, 15 years, Facebook was saying, news is our future, we want to work with news organisations and is convincing us all to produce content for Facebook for free, and saying that the benefit was that we’d get access to audiences via their platform.
“And then in the two or three years before that, the, news media laws came out in Australia, Facebook got all of the media organisations flew us all to Sydney, plied us all with their fine champagne, and tried to train us in how to monetise audiences that we had on Facebook.
“I think effectively as a way of saying we don’t think we should pay for it. But we’re going to help you find a way of paying for the journalism yourselves. But then, of course, Facebook has played very, very much hardball.”
And now Meta appears to be planning to retreat from news entirely having said it won’t be renewing the deals it ultimately did strike in Australia: “Now we’re in a situation in Australia where Facebook is looking at withdrawing from news altogether. And that’s having a negative impact, particularly for a lot of the small publishers who didn’t get any money from the news media laws.
“They also relied a lot on, Facebook for their audience and for growing their audience and their small publishers that are getting 30%, 40% of their audience from Facebook. And as Facebook sort of retreats from news, they’re losing audience.”
Global threats
It’s not only Facebook threatening to pull back from news. As legislators in California plot laws to support journalism, Google is trialling the removal of news from Californian-based sources from its search engines.
South Africa is also looking at how to help journalism. Khadija Patel, head of international programmes at the International Fund for Public Interest Media, said the Competition Commission of South Africa had recently conducted a first round of hearings looking at the behaviour of tech platforms, at a time when news media is shrinking quickly.
She told the value of news panel that publishers had been “confident that they would have money in the bank account. But by the second quarter of this year all of that optimism, appears to have been dissolved because, a recent news article, on a business website revealed that there’s been dissent within the ranks of the publishers, who feel that the financial products that Google was offering them, is insulting.”
Part of the challenge comes from how the publishers respond to approaches from platforms to pay at least a little for news, delaying legislation which could help them.
Andrea Carson, from the Department of Politics, Media and Philosophy from La Trobe University, told the panel session: “In New Zealand the two major companies have gone to 46 newsrooms, old news organisations, and given these voluntary deals.
“And it was a very successful strategy because what it served to do was this was a, a very prominent policy agenda for the New Zealand government. When the news companies got the deals, they stopped writing about it. It wasn’t making headlines anymore. It lost its salience. And then there was a change of government.”
Another storm on the horizon
While the solution is far from sorted when it comes to relationships with the platforms, Anya warned history might be about to repeat itself — as publishers grapple with how to get fair funding from generative AI platforms like ChatGPT.
Anya said: “Google benefited from news now, but AI is benefiting also from search and from news.
“The thing to remember is that there’s only about five of them [generative AI platforms built on large language models which scrape the internet] at the moment that are really strong, and it costs about $100 million to build them.
“They’re in an arms race because they need good content. So this is one of the few moments in, in history when journalists are actually in a strong position, there’s model deterioration. So if the models feed on bad information, they’re just going to get worse and worse.”
