© Reuters. FILE PHOTO: The Facebook logo is displayed on a smartphone in this illustration taken on January 6, 2020. REUTERS / Dado Ruvic / Illustration / File Photo
(Reuters) – Faced with regulatory and political pressures, Facebook (NASDAQ 🙂 and Alphabet (NASDAQ 🙂 Inc have committed a total of $ 600 million in recent years to support news outlets around the world, many of which are local or regional businesses. crashing in the digital age.
According to the tech giants, thousands of media outlets have received financial and other support on everything from fact-checking and reporting to training. Some publishers are grateful for the contributions they say are needed due to the fall in ad revenue.
But several media analysts and news business executives told Reuters that the three-year funding would hardly offset the tens of billions of dollars that publishers lost as tech companies took over the digital ad market. Google and Facebook accounted for 54% of U.S. digital ad revenues in 2020, according to market research firm eMarketer.
Some critics have dismissed the projects, including $ 300 million in contributions from each company, as a way to quell publisher complaints and create good PR. Both tech companies are facing battles over compensation for news content around the world, as well as antitrust claims from regulators and publishers.
This “random charity” is “a drop in the bucket,” said Maribel Perez Wadsworth, publisher of Gannett’s USA Today and president of the USA Today Network, which participates in a Facebook-sponsored fact-checking program. “News publishers are not looking for charity. We just demand a fair shot and a level playing field. “
Emily Bell, director of the Center for Digital Journalism at Columbia University, said money is vital to newsrooms in the short term. “But they are not given at a level that really has a lasting impact on the field, and it doesn’t really change anything.”
The tech giants told Reuters they are genuinely committed to helping local and regional retail outlets, and both will continue to provide support beyond the $ 600 million expiration in the coming months.
According to Campbell Brown, head of news, the goal of the Facebook journalism project is to help publishers “effectively transition to and succeed in today’s digital world, where they need to find very specific audiences in order to succeed.” Facebook partnership.
Google “is focused on building a healthy and vibrant ecosystem of quality journalism,” said Ben Monnie, the company’s director of global partnerships.
Reuters is involved in initiatives funded by both Google and Facebook. For example, through the Facebook Journalism project, Reuters received funding to develop a digital media training course for journalists. Neither Facebook nor Reuters disclose the amount of the allocated money.
Both Facebook and Google have contributed to the news industry beyond $ 600 million. For example, last year, companies provided $ 1 billion in grants and deals to pay for content to various media outlets around the world. As part of this commitment, Google pays publishers like Reuters to create and select content for its News Showcase – snippets for its News and Discover apps.
The Reuters Journalism Research Institute, which is heavily funded by a corporate foundation Thomson reuters (NYSE :), announced in 2020 that it received approximately $ 19 million in grants from Google and $ 4 million from Facebook.
Both Facebook and Google say publishers only benefit from using their platforms, which deliver traffic that helps drive ad revenue and subscriptions.
“We’re a free service available to everyone to post content,” Brown said. Publisher participation “assumes they are benefitting from the platform without our additional investment.”
WHERE DID THE MONEY GO?
According to company reports, Facebook, the social media goliath, and Google, by far the most popular search engine in the world, have generated $ 607 billion in ad revenue over the past three years. These companies are among the largest corporate sponsors of the global news industry.
Both platforms have so far released limited information on how $ 600 million was spent in grants and services, often offering generic descriptions or examples without financial details.
Google has publicly identified spending at approximately $ 198 million, including $ 81 million in “improving journalism,” such as training on how to use Google products in reporting. The company, which said it plans to spend a full $ 300 million by the end of the year, lists more than 6,250 “news partners” in the project, from the Associated Press and BuzzFeed News to the Cook Islands South Pacific news.
Facebook said its $ 300 million was fully spent, more than half of which was spent supporting local news. The company’s public announcements are $ 80.3 million, a quarter of which went to a program that helps local newsrooms attract more digital subscribers. Company spokesman Adam Isserlis said the project also includes private deals with publishers, details of which are confidential.
Several news agency executives said they are pushing tech giants to pay more for content and pay more attention to original reporting. Facebook and Google say they have already changed their algorithms to do just that.
Meanwhile, some publishers see a lifeline. The chief executive of the Post and Courier in Charleston, South Carolina said the Google-funded training “lab” helped the newspaper determine the volume and value of digital subscribers that would cover the costs.
Lance Knobel, co-founder of Cityside, a nonprofit in Oakland, California, said he used $ 1.56 million from Google to launch and maintain a local online news site, Oaklandside.
“I honestly think their great interest is that they want a healthy news environment,” he said.
FRIEND AND PROTECTION
Other publishers are unhappy or ambiguous regarding tech goliaths as friends and foes.
Companies have a huge impact on POS ad revenues because their algorithms determine whether an article will appear prominently in Google search or Facebook Newsfeed.
Google operates one of the largest online advertising exchanges for digital ads that are bought and sold automatically using software. Because Google competes as the largest buyer and seller on this exchange, it can do business for itself, some publishers and other critics have argued.
In the United States alone, newspaper digital and print ad revenues fell to $ 14.3 billion in 2018 from $ 49.4 billion in 2005.
June 7, in accordance with the amicable agreement with the French competition authority https://www.reuters.com/technology/french-watchdog-fines-google-220-mln-euros-abuse-market-power-ad-business-2021-06 -07, Google agreed to provide more data to ad buyers, reducing some of its competitive edge over publishers.
Google and Facebook face other legal issues https://www.reuters.com/article/tech-antitrust-google-facts-factbox-int/factbox-big-tech-comes-under-rapid-fire-from-five- us -lawful-additional-probes-in-progress-idUSKBN28R39Q. Progressive US news website Nation and West Virginia newspaper company HD Media are among the publishers of https://www.reuters.com/technology/daily-mail-files-antitrust-lawsuit-against-google-2021-04. -20 have filed antitrust lawsuits against one or both tech giants in recent months. The US authorities have also filed antitrust lawsuits against both, and in some states https://www.reuters.com/article/us-tech-antitrust-google/texas-nine-us-states-accuse-google-of-working-with -facebook-to-break-antitrust-law-idUSKBN28Q2RL accused Google of illegally dominating the online advertising process.
In response to some of the lawsuits, the companies have rejected claims that their business practices are detrimental to publishers. Google said that people use the company because they want to, not because they are forced to.
Frank Blutin looks at things differently.
The Seattle Times publisher reported that his newspaper participated in programs supported by Google and Facebook. But “if they didn’t monopolize advertising and play search like they do, newspapers would still make money,” he said.
(Helen Koster reported from New York. Edited by Kenneth Lee and Julie Marquis)