News Industry

According to News Media Alliance’s Economic Study Google Generated $4.7 Billion from News Content in 2018

According to News Media Alliance’s Economic Study Google Generated $4.7 Billion from News Content in 2018

According to News Media Alliance’s Economic Study Google Generated $4.7 Billion from News Content in 2018.

A total of $4.7 billion was made by Google in 2018 from news content, nearly equaling the profits from all areas of the news industry combined. According to an economic study by News Media Alliance, a trade association that represents thousands of American and Canadian newspapers, published this month found that:

In June 2018, roughly nine-in-ten adults (93%) in the U.S. accessed at least some news online. Most importantly, this shift to online fundamentally changed how consumers access and consume news content. For example, Pew Research Center’s study in 2016 found that more digital news consumers get their news online in the process of accomplishing other digital tasks (55%) than specifically seek the news out.4 Additionally, the shift to online was followed by a further shift from desktop to mobile devices. A Pew Research Center survey found that 88% of U.S. adults get news on a mobile device at least some of the time, up from 72% in 2016 and 54% in 2013.5 These major shifts in the news industry have allowed for increasing engagement of emerging technology players at the expense of news publishers who had traditionally relied on news subscriptions.’

To read the full report click here.

Google has become a key player in bridging the gap between consumers and online news content. Roughly 70 percent of referral traffic that was directed towards the major news websites resulted from Google search and Google News. ‘Since January 2017, traffic from Google Search to news publisher sites has risen by more than 25% to approximately 1.6 billion visits per week in January 2018.’ Taken from newsmediaaliance.org.

Google and Facebook bridge the gap between users and online news content

Google’s profits from its circulation of news content are just slightly behind the $5.1 billion revenue from the entire US news sector combined. However, News Media Alliance has raised the issue that the numbers may be underestimated because the report excludes the value of personal data every time they use Google to access news content.

Aron Pilhofer, the James B. Steele Chair in Journalism Innovation at Temple University, was critical of the report’s findings after taking to Twitter saying:

‘Oh my god is this nonsense. Marissa Mayer makes an offhanded comment in 2008 about a product that has *literally no advertising or monetization whatsoever*, and suddenly a decade later Google News accounts for 3.3% of Google’s revenue? Second of all, even if you accept the methodology (which I do not), I think it’s fair to also account for all the traffic Google is pushing to publisher sites, wouldn’t it? This is just silly. If this were any other industry group, it would never get this treatment by the NYT.’

A Google representative also voiced disapproval of the study, implying that the results are unreliable:

“Every month Google News and Google Search drive over 10 billion clicks to publishers’ websites, which drive subscriptions and significant ad revenue. We’ve worked very hard to be a collaborative and supportive technology and advertising partner to news publishers worldwide.”

Taken from inc.com.

Nevertheless, the study by the News Media Alliance highlights just how dependent the news industry is on the global tech and social media giants to get their news stories across to consumers and readers; moreover, it suggests that Google is unfairly gaining revenue from the bilateral cooperation.

David Chavern, President and Chief Executive Officer for News Media Alliance said: “News publishers need to continue to invest in quality journalism, and they can’t do that if the platforms take what they want without paying for it. Information wants to be free, but reporters need to get paid.”  

Google Search depends on news content as a catalyst to maximize consumer and visitor engagement. Users are exposed to news content through searches regarding current affairs online, or through Google Ads supplementing the search results pages. 10 years ago, the unique visitors in the United States for Google News was roughly 25 million, whereas the New York Times and CNN had a joint figure of 50 million. In the space of 10 years, Google’s monthly unique visitors had skyrocketed to 150 million, overtaking and dominating the US news industry.

David Chavern is set to put a case forward for a fairer revenue distribution between the tech giants and the news industry. News Media Alliance is pushing for the approval and establishment of the Journalism Competition and Preservation Act.

What is the Journalism Competition and Preservation Act?

On the 3rd of April, 2019, David Cicilline, Chairman for House Antitrust introduced the Journalism Competition and Preservation Act which if passed is legislation to give news publishers the ability to discuss and negotiate business agreements and deals with the major tech firms and social media platforms including Google and Facebook.

‘Currently, the Duopoly is capturing 90 percent of all digital ad revenue growth and approximately 60 percent of total U.S. digital advertising. Like Cicilline and Collins, the Alliance believes the solution to this problem is to provide a safe harbor for news publishers to allow them to come together to negotiate with the platforms on their overall behalf.’

Cicilline said: “The free press is a cornerstone of our democracy. Journalists keep the public informed, root out corruption, and hold the powerful accountable. This bill will provide a much-needed lifeline to local publishers who have been crushed by Google and Facebook. It’s about time we take a stand on this issue.”

“Community journalism holds a critical place in our democracy because it helps the American people understand and engage in civil society. Through our bipartisan legislation, we are opening the door for community newspapers to more fairly negotiate with large tech platforms that are operating in an increasingly anti-competitive space. This will help protect journalism, promote competition and allow communities to stay informed.” said Collins.

Click here to read the full report by the News Media Alliance.

Journalism Competition and Preservation Act

Chavern has labelled Facebook and Google as “wonderful distribution systems” but emphasizes the unfairness in terms of revenue distribution as either side of the equation cannot exist without the other. The news media industry is responsible for generating the original news content whereas Google and Facebook are responsible for dispensing that content to users across the globe.

The News Media Alliance has highlighted the fact that online platforms commonly pay for other categories of content like music, and therefore argues the point that news content should not be an exemption.

Concerns regarding user data protection and fake news have put immense pressure on social media and tech companies to improve their standards and the way user data is regulated. During an interview with CNBC, Facebook’s Chief Operating Officer gave an official apology on behalf of the social network giant:

“This was a huge breach of trust. People come to Facebook every day and they depend upon us to protect their data and I am so sorry that we let so many people down. We spent the last couple of days trying to get to the bottom of what happened. Cambridge Analytica should never have had this data, they told us they deleted it but it is our mistake that we did not verify that. Mark Zuckerberg announced very strong steps yesterday. He announced that we are going to be investigating and auditing apps, and if we find misuse, we are going to tell people. He announced that we are further going to shut down platforms so that apps get much less data. This is about trust and earning the trust of the people that use our service is the most important thing we do, and we are very committed to earning it.”  

To watch the full CBS report click here.

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