Big Media vs. Big Tech

Matthew Hoy
By Matthew Hoy on February 22, 2021

Late last week Facebook fired the first shot in the coming war between Big Media and Big Tech. In response to legislation that passed Australia's House of Representatives, but had not yet become law, that would require Facebook to pay Australian media companies anytime anyone linked to, or shared, an article from a news organization on its website.

Starting last Thursday, any attempt in Australia to share a news story on Facebook prompted a pop-up blocking that feature on the platform.

“This post can’t be shared,” the website said. “In response to Australian government legislation, Facebook restricts the posting of news links and all posts from news Pages in Australia. Globally, the posting and sharing of news links from Australian publications is restricted.”

The legislation also targets search giant Google which makes much of its money off of advertisers "bidding for" or "buying" search terms so their ads appear prominently.

Tuesday morning, Facebook struck a deal to offer payments to Australian media outlets, but it's unclear what the long-term impact of the deal will be, and whether it will "save" journalism.

Big Media's Big Problem

Since the dawn of the Internet Age, media outlets have had a big problem. They haven't figured out how to translate eyeballs viewing their content on a digital screen into advertising profit. Before the Web became the primary way the vast majority of people got their news (especially more in-depth, long-form reporting), people subscribed to things called "newspapers"—sometimes more than one.

First, Craigslist came around and demolished the classified ads section. If you wanted to sell anything worth more than a trivial value, you called or went to your local newspaper office, and for about $21 for a week or two, you got three lines of tiny type to describe your product and include your phone number. You want to add a photo? That's going to cost a pretty penny more.

Then came the Internet and the online publishing. This opened up opportunities for more creative storytelling, longer features, the addition of video and motion graphics. (This article from the Dallas Morning News is probably one of the best examples of what I'm talking about.)

But it also caused people to stop subscribing to the printed paper. They could get the news free, online, and the newspaper didn't have the information about its digital readers that it had about its print subscribers that it could leverage to charge the prices needed to support the journalism. At the time, many subscribers thought that they were paying for the journalism. They weren't. Their newspaper subscriptions typically covered cost of the paper, ink and home delivery. The advertising paid for the journalism.

It's been at least a decade, and they still haven't figured out how to recover that advertising revenue, and now they're turning to the government for help.

With reduced revenue, newspapers—and to a lesser extent radio and television—have dramatically cut their reporting staffs over the past decade. Smaller, local newspapers have disappeared or been gobbled up by larger, metropolitan papers.

This lack of reporters and reporting at local and regional newspapers—The New York Times, The Wall Street Journal, and Washington Post have been curiously immune from this advertising and subscriber flight—affects you whether you realize it or not. More often than not, much of what the local evening television news or radio covered that wasn't "breaking" was a brief regurgitation of what appeared in the morning newspaper.

That process hasn't changed. If your local newspaper isn't covering it, then odds are, neither is any of the other media outlets in town.

Big Tech in the Crosshairs

While newspapers have struggled, Google and Facebook have thrived.

A not insignificant part of what draws a lot of people to Facebook are posts of links to traditional media sources that people post for discussion which typically includes the lead photo of the story and the first dozen words of the article.

Google is in the crosshairs because its search results often, helpfully for searchers, include a short synopsis of the linked article that for some may be all the information they need—denying the news site itself of eyeballs for ads that appear on their site—or enough information to determine which search result they want to click on, rather than doing them one-by-one and, again, denying eyeballs to "wrong" links.

There's little dispute that, should Facebook or Google copy content wholesale that they need to pay for it, but that's not what they do and that's not what Australia, France, and now Canada, are passing legislation to accomplish, because existing law already allows for this.

In France, where Google has reached a deal to pay news publishers for their use of "snippets"—those brief summaries which accompanied the link to news stories—the original dispute was whether Google could provide search results that pointed to French news publishers at all.

France was the first country to transpose the EU's order into national law. Google read the French law as allowing unlicensed use of the headline of a story, but not more than that. So in September, Google removed the "snippet" that often appears below headlines from its French news search results, as well as thumbnail images.

"We don't accept payment from anyone to be included in search results," Google wrote in a September blog post. "We sell ads, not search results, and every ad on Google is clearly marked. That's also why we don't pay publishers when people click on their links in a search result."

French news publishers cried foul. The goal of the French law, after all, was to get Google to give them money, not to make their articles less conspicuous in search results. So they complained to the French Competition Authority. In a preliminary order Thursday, the agency said that Google's new strategy represented a "likely" abuse of its market power. [emphasis added]

This idea that you would have to pay to link to something on the Internet is an anathema to the very basis of the World Wide Web. If widely applied, it would be the end of the Internet as we know it. For bloggers or small publishers, the idea that I would have to pay for each link, blockquote or reference would quickly turn—already a money-losing enterprise—into an unaffordable hobby.

On Facebook, this entire concept is even more troublesome. That link to that news story about your favorite college basketball team that your friend posted? Facebook would have to pay the publisher because your friend posted the link. That kind of imposition of costs on a third party who is merely hosting the information is unsettling.

Big Media vs. Big Tech

For a not insignificant number of conservatives, this Big Media vs. Big Tech showdown is reminiscent of the Iran-Iraq war of the 1980s—is there some way to ensure that both sides lose?

While I'm sure there are a plethora of media companies here in the United States that would love to have what is effectively forced syndication deals with major search engines and social media platforms, there are at least two hurdles preventing something similar to what's happening in Australia, Canada, and Europe.

First, the largely liberal, "mainstream" media is growing increasingly "woke," is becoming indistinguishable from random hacks, publishing partisan hit jobs, and sometimes just going insane. There is likely little sympathy from the Republican Party to legislate some system that overwhelmingly benefits their political opposition.

(If you doubt the premise, do a deep dive into how the media has covered the handling of COVID by Florida Gov. Ron DeSantis compared to New York's Andrew Cuomo while looking at the hospitalization, economic, and mortality rates. Rich Lowry's latest column is a good starting point.)

Second, while chastising Big Tech is increasingly becoming a bipartisan exercise, most politicians don't seem as interested in bleeding them of money as they are concerned that they are acting either too much like censors or too little.

In the United States, there is so much more to "the media" than major corporations that own newspapers, radio and television stations across the country. Groups like James O'Keefe's Project Veritas, former CBS newswoman Sharyl Attkisson's weekly "Full Measure" news show, or a slew of conservative-backed news reporting sites like The Federalist, the Washington Free Beacon, or Ben Shapiro's The Daily Wire, would likely be in line for payments from Big Tech under any neutral legislation aimed at passing a 50-50 Senate.

Guaranteeing The Federalist a regular infusion of Big Tech cash when at the same time the increasingly illiberal left demonizes them and seeks to unmask their backers won't go over well with the Democratic base.

There's a third potential hurdle that I will leave to the lawyers: How would any system requiring payment for links or short summaries of news stories function in a country where the "fair-use doctrine" is reasonably settled law?

What does the future hold?

It will be interesting to see how this experiment in Europe, Canada, and Australia effects the open market for communication and information that the Internet has grown to be. Will smaller, independent publishers in those countries benefit? Or just the big boys? Will news aggregators that don't have huge financial backers (think: Drudge Report) have to start paying for the stories they link to as well?

Traditional journalism needs to find a way to fulfill its important, watchdog role. For most new media and non-profit web-based publications, that has meant pledge drives, subscriptions, premium memberships, and funding from grants by foundations or corporations.

Personally, I'm wary of government-enforced anything, and there are always unforeseen impacts that too often contribute further to the "problem" the government was seeking to fix. I'd feel a lot better about the situation if Google hadn't abandoned its "Don't Be Evil" motto and made, without the force or threat of government, substantial grants to news media outlets that it is indirectly making some profit from.

I'm sure media chiefs would complain that whatever they received was not enough, but it would be better solution than getting the heavy hand of government involved.

Note: This post was published in error before it was completed. We apologize for the inconvenience.


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February 2021



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