When it comes to the digital advertising market, the word “duopoly” has become the dominant descriptor for Google and Facebook, something neither company seems to dispute. Though estimates differ, the two online platforms receive the lion’s share of money spent on digital advertising—and that share keeps getting bigger. According to eMarketer, the Silicon Valley behemoths are expected to control nearly 60% of the booming market this year, while others say that percentage is even higher.
At the same time, the news media business is flailing. Even as audiences consume more news content, the publishers that undergo the expensive process of producing it are not reaping the monetary rewards. Digital news distribution has become more reliant on the whims of Google and Facebook, and that means those companies set the terms of the turf.
But a new effort is under way to help level the playing field. Led by the News Media Alliance, a trade group representing the newspaper industry, media companies are coming together to try and collectively bargain with the two digital media platform giants.
“The problem,” writes News Media Alliance president David Chavern in a Wall Street Journal op-ed, “is that today’s internet distribution systems distort the flow of economic value derived from good reporting.” Publishers, editors, and reporters put in the real work, while Facebook and Google reap the benefits. The trade group is asking Congress for a special exemption that would allow newspaper companies safe harbor from antitrust law as a way to seek collective bargaining.
Why Now?
Chavern is relatively new at his job. In an interview with Fast Company today, he says he’s been at the News Media Alliance for a little more than a year, and he’s been trying to take an accurate temperature of what others in the industry are feeling. He’s not a media man; he worked for years as the COO of the U.S. Chamber of Commerce. But when he spoke with media insiders, he says he noticed “a common thread,” mainly that “nothing economically sustainable was coming out of the digital world.”
But this isn’t a new problem. Though it may be an understatement now to say that Google and Facebook control media distribution, their dominance didn’t come out of nowhere. Legacy newspaper CEOs didn’t wake up in 2016 and suddenly realize their Facebook strategy just wasn’t cutting it. Publishers have long bemoaned the opaque world of Facebook’s ever-changing news feed algorithm, and they’ve been striving even longer to figure out the best SEO methods behind that perfect Google hit. The history of media in the 2010s will surely be rife with stories of news organizations trying to follow the digital tide, often to the detriment of their own journalism.
Wouldn’t it have been more advantageous for the media industry to band together five years ago?
According to Chavern, now is the right time because of the industry’s heightened frustration with the platforms. Over the last few years, Facebook has offered programs to publishers with the promise of a more sustainable outlook. Instant Articles—which lets media brands publish natively to Facebook—was an experiment publishers felt obligated to try. But Chavern says it ultimately showed little success. “Instant Articles was a huge disappointment,” he says. “You don’t want more disappointment.”
Similarly, Google’s Accelerated Mobile Pages, or AMP, program has not yielded the revenue boost some news outlets wanted, despite high hopes. The sense of complete and utter frustration among media companies, Chavern says, started to hit boiling point a little over a year ago.
Publishers Need Better Solutions
The goal, then, is to make it possible for new solutions that will create more sustainable business models. Chavern sees collective bargaining as a way to bring about four important things: more equitable revenue sharing from the platforms, better data about who the audience is and how to interact with them, more efficient ways to offer subscription models, and better ways for media companies to maintain their brand identity.
Though that last one is amorphous, for Chavern it gets at one of the nagging problems that legacy media companies face. It’s important for news organizations to connect with their readers and vice versa, and to do that, they need to be able to be differentiate themselves. But one of the worst things Facebook and Google do is make all media look the same, with uniform layouts and design specs. This, says Chavern, is deadly for news brands in a world of unlimited choices.
Though media companies have finally woken up to the Google/Facebook threat, they still have a daunting fight ahead. First, they have to get government approval to band together, which would be no small feat in a climate of widespread media antipathy. Chavern is hopeful, though: While President Trump may routinely denounce CNN and NBC as “fake news,” the News Media Alliance president points to the fact that many legislators still have good relationships with their local media.
Still, you have to wonder if it’s all too little, too late. Five years ago, Facebook was a new and interesting prospect for publishers. Had they put their foot down then, perhaps things would be different now. When asked about the alliance’s latest move, Facebook sent me a canned message about the work it’s doing with publishers to help journalism thrive. Google didn’t respond to a request for comment (updated–see below).
For Chavern, the imperative now is to save the journalism that remains. If things continue to go the way they’re going, the news business model will be destroyed, and journalism along with it. “If you can’t sustain a legitimate news business, the news will be replaced with junk,” he says.
Update: After publishing, Google provided Fast Company with this comment: “We want to help news publishers succeed as they transition to digital. In recent years we’ve built numerous specialized products and technologies, developed specifically to help distribute, fund, and support newspapers. This is a priority and we remain deeply committed to helping publishers with both their challenges, and their opportunities.”
Recognize your brand's excellence by applying to this year's Brands That Matters Awards before the early-rate deadline, May 3.
