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Apr 29th, 2021 | 1:00PM ET

Businesses across the world are changing their models because of the pandemic. How are local for-profit newsrooms shifting with the times? On Episode 22 of “Informed and Engaged,” Knight Foundation’s Paul Cheung will speak with Jim VandeHei, founder and CEO of Axios, on why he thinks there is a sustainable future for-profit local journalism — and why the time is now.

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Are Google and Facebook really the future of Journalism?
New Policies risk making it so

By Emily Bell



At the end of February this year, Australia passed a law which required Facebook and Google to either negotiate deals for news material and links carried by their services. or be forced into arbitration. If no agreement could be made, the law mandated that the links be taken down from the platforms entirely. Over the past two months, this small regional issue has become a critical test case for ways in which national regulators might start to reshape their media economies rather than simply surrender to the forces of the global online advertising market as dictated by large online platforms. 


As the implications of Australia’s News Media Bargaining Code start to sink in around the world, the subject of how technology companies like Google and Facebook support journalism is an issue of growing interest to both newsrooms and policy makers. In the US, the policy conversation has focused on the possibilities of antitrust in tackling the size and impact of advertising platforms. Similarly, there seems to be an increased need for a “digital new deal” to help rebuild independent local journalism. A number of bills and initiatives are currently on the books to help the plight of local journalism. Meanwhile, Google and Facebook both announced a tripling of their annual budgets directed towards journalism, from $100 to $300 million each per year over the next three years. 


Many have argued for some time that technology platforms need to be the source of funding for repairing information market failures precipitated by their highly lucrative business models. However, new initiatives stemming from the regulatory approach in Australia leave an open question on how platforms should play a role in the future of sustainable journalism: is the deliberate tying together of the fortunes of newsrooms and publishers with those of Google and Facebook actually counterproductive? It is possible that--almost by accident--we are creating an environment in which regulators are placated by a flashy increase in funding by Facebook and Google instead of addressing the need for actual regulatory reform to support journalism?


In a recent seminar hosted by Columbia Professor Any Schiffren and McGill University’s Taylor Owen, a remarkably wide range of competition ministers and regulatory experts from around the world discussed the implications of the News Media Bargaining Code. The chair of the Australian Competition and Consumer Commission who first introduced the Code, Rod Sims, talked about the model being a “negotiate/arbitrate model.” What this means is that arbitration becomes a threat to platforms if negotiation isn’t available or fair. According to Sims, the threat of arbitration evens up the bargaining power between platforms and publishers. He made it clear that the objective of the code“is to allow a proper commercial deal for content being produced.” But when pondering the very premise of this new Australian formula, he said: “Is this code the best code for supporting journalism? In my opinion that’s the wrong question,” explaining that the bargaining code is just an economic element amidst a suite of measures required to bolster journalism. One of the more pertinent drawbacks of the Code, though, is that instead of separating the functions of journalism from those of technology platforms, it forces them together in an opaque way. 


No details of the negotiations nor the sums of money exchanging hands between the platforms and publishers are made public by the code, though Sims added that because publishers were involved, sums are likely to leak out. This in itself demonstrates part of the problem: not one, but two sets of players (the technology companies and their journalism beneficiaries) are drawn closer together through complicity into an obscure bargain. 


Last week, the Center for Journalism and Liberty, a program of the Open Markets Institute, produced a conference on “The Future of Journalism And Democracy,” pulling together lawmakers, journalists, academics and policymakers. The day focused particularly on Google and Facebook’s roles in our democratic and news media institutions. Discussions were wide ranging, from looking at the numerous antitrust lawsuits against Google and Facebook, to discussing the prospects for philanthropy in saving local journalism, to a panel parsing the funding mechanisms through which large platforms currently support the news industry (or capture them, depending on your perspective). If you have time, the whole day is worth watching here, though the issue of exactly how we should be negotiating the issue of the dependency of journalism on technology was subsidiary to the immediacy of the overall crisis. 


A panel discussion at the conference about the nature of the relationship between Google and Facebook’s journalism funding efforts and in turn, the realities of the newsrooms they fund, demonstrated the conflicts and tensions within the issue. In the discussion, Dan Froomkin discussed his recent article in Washington Monthly, which describes how the dynamics between Facebook and the New York Times is far more embedded and lucrative than readers might realize. The Times’ media critic Ben Smith responded to Froomkin by suggesting that the dark influence was not necessarily coming just from the platforms, but they were themselves responding to pressure and adverse coverage. Smith claimed the readiness of Facebook to do deals with publishers such as the Times was effectively driven by aggressive lobbying and coverage from Rupert Murdoch’s News Corporation. Smith went on to say this could be seen as a form of extortion, just as the Facebook and Google payments might be thought of as lobbying money. 


As global regulators examine the benefits of adopting the Australian approach, whereby platforms are regulated into forging deals with publishers, both Google and Facebook are already ahead of them, signing up publishers in order to pre-empt other possible legislation. But what are the terms of those bargains? How much of the money is actually directed into journalism efforts as opposed to management budgeting or shareholder growth? Do the deals come with any contingency requirements, such as diversity or transparency? Most likely, we’ll never know for sure. The rush by platforms to swiftly doll out hush money while also outrunning policymakers is a lost opportunity to create better bargains for newsrooms and the communities they serve.


Earlier this week, The New York Times ran a piece sweeping up the regulatory moves, from China to America, which are seeking to impose regional restraints on the power of technology companies, describing it as the “global tipping point” for big tech. In the United States, disappearance of advertising support and the consequent collapse of local journalism is one of the most effective tools being used to leverage more regulatory oversight against the platforms. But the scramble to cross-subsidize leaves unanswered the uncomfortable question of whether this close relationship of corporate power and supposedly accountability journalism is something that needs dissolving rather than encouraging. 

  • Another week, another barrage of platform news. From Buzzfeed: “Facebook Knows It Was Used To Help Incite The Capitol Insurrection.”  On a related note, from Vanity Fair: “All Eyes Are on Facebook as it Weighs Whether to Ban Donald Trump for Life,” Meanwhile, at the intersection of Facebook and Apple’s growing feud: “How Mark Zuckerberg and Tim Cook Became Foes.” And finally, more on Apple’s new privacy opt-out feature from The Verge. 
  • As COVID-19 cases and deaths dramatically and tragically surge in India, platforms are facing backlash for their acquiescence to Prime Minister Narendra Modi’s demand that Twitter and Facebook censor public posts that criticize the government’s pandemic response. As outlets across the world report that the death toll from the coronavirus may far exceed the official reported numbers, last week: “India’s government ordered Twitter to block more than 50 tweets that criticized how it has handled the pandemic. Twitter complied…” Meanwhile, Facebook and Instagram also agreed “to take down posts that [the Indian government] deemed posed potential to incite panic among the public, hinder its efforts to contain the pandemic, or were simply misleading,” according to TechCrunch. These censorship efforts come amidst a surge in COVID-related misinformation, which has largely spread in WhatsApp groups across the country, according to Wired UK. The Tow Center’s Priyanjana Bengani has previously investigated how WhatsApp has provided a platform for misinformation in India, including anti-vax conspiracies.   

  • Last week, the Idaho News Guild filed an unfair labor practice complaint against McClatchy for “insert[ing] pageview quotas and other digital metrics into goals supposedly set by employees” at the Idaho Statesman. This news serves as another instance of local news (be it unionized or not) attempting to decentralize the power of publishing giants like McClatchy, which was purchased by hedge fund Chatham Management last July. Similarly, NPR reports that Tribune Publishing (which owns the Baltimore Sun, the Chicago Tribune and the New York Daily News, among others) is continuing to battle over the looming purchase of the company by Alden Capital, another hedge fund.  According to the piece by NPR: “Alden, which already owns roughly 100 daily newspapers, has said it wants to build a sustainable path for them. But it is better known for slashing its newsrooms in Denver, the Bay Area and elsewhere.” These reports come as a hellish period for local journalism marked by slashes in advertising and devastating job and budget cuts from the pandemic. 

  • Last week’s New York Times column from Ben Smith declared that, “In the Roaring Twenties, Ads Make a Comeback.” According to Smith, “The astonishing rise of subscription digital media is part of a broader rush toward the reliable, direct-to-consumer economics that has captivated investors.”  This noted increase in advertising-backed media (as opposed to non-profit entities funded by hybrid models or subscriber-backed publications) aligned with news from TechCrunch last week that, “Facebook is announcing some new capabilities for video advertisers on Facebook and Instagram, as well as new numbers about the potential audience that those ads might reach.” Another media company, audio app Clubhouse, is buying into the ad game as well. But according to this article on Digiday, a similar startup is looking to compete with the new Clubhouse feature. Newly-launched app Clubmarket is aiming to “facilitat[e] dealmaking between brands and influencers on the app by allowing...hosts to monetize their content via partnerships with brands.” In layman’s terms? Advertising-based revenue seems to be making a comeback, albeit in newer forms.  

  • Nieman Lab reports on a new Reuters Institute report that asked: “How do audiences decide what news to trust? Fairness and accuracy aren’t the only things that matter.” Below is a graphic displaying the ecosystem in which audiences choose the trustworthiness and relevance of news stories and sources.

    Source: Reuters Institute

           Over the past few years, several Tow researchers have dived into
           audience engagement, especially at the local level
Copyright © 2021 Tow Center for Digital Journalism, All rights reserved.

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