Thursday 26 April 2018

Tech is losing war on journalism as value of quality content rises

Rupert Murdoch says Facebook and Google should pay for news. Photo: AFP/Getty Images
Rupert Murdoch says Facebook and Google should pay for news. Photo: AFP/Getty Images

Leonid Bershidsky

It seems like only yesterday that journalism faced existential challenges from technology platforms that helped anyone publish whatever they wanted, took over the distribution of news, and usurped the advertising market with promises of precise targeting. It turns out that the news profession can be quite successful at repelling those challenges. The enemy is in retreat; the news business just needs to be bolder about claiming the spoils.

It seems like only yesterday that journalism faced existential challenges from technology platforms that helped anyone publish whatever they wanted, took over the distribution of news, and usurped the advertising market with promises of precise targeting. It turns out that the news profession can be quite successful at repelling those challenges. The enemy is in retreat; the news business just needs to be bolder about claiming the spoils.

In the past week, the 'Huffington Post' scaled back its platform for unpaid bloggers and Facebook decided to ask users to rank news sources by trustworthiness.

Both represent a clear preference for traditional journalism - in which people get paid for producing stories for good reason.

The just-released 2018 Edelman Trust Barometer shows rising confidence in traditional media: In the 28 countries where the survey was conducted, 59pc now trust journalism, up from 54pc a year ago, while trust in social media platforms has declined from 53pc to 51pc. Pretty much everywhere in the Western world, professional media are considered to be more reliable sources of information than online platforms.

Facebook's announcement is an admission that the company can't completely replace professional output with user-generated content. "News will always be a critical way to start conversations on important topics," CEO Mark Zuckerberg wrote.

But it's more than that. Facebook is telling users that consuming the product of certain news organisations is better for their well-being than being indiscriminate. That's why the Facebook announcement drove up stock price of 'The New York Times'.

Left scrambling are 'social-first' media companies, which are cutting staff as they discover that trying to piggyback on the growth of greedy and vulnerable internet giants wasn't a great bet. At this rate, news outlets could even find themselves asking why they aren't putting more resources into managing their home pages rather than social media.

Survival is good, but being properly valued is better. Now that tech platforms are realising they have no good replacement for quality journalism, it's time for them to start paying for it.

That, in a nutshell, is the meaning of a statement released on Monday by News Corp Executive Chairman Rupert Murdoch. He accused Facebook and Google of popularising "scurrilous news sources," praised them for recognising the problem and made a demand: if Facebook wants to recognise 'trusted' publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies.

The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook's profits but a major impact on the prospects for publishers and journalists.

Given Zuckerberg's recognition of the value of news for his company's stated purpose - connecting people and building communities - that's a fair suggestion. News publishers should be prepared to fight the republication of their content. It worked for the music industry: Facebook is paying licence fees for music used in home videos. If 'trusted' news outlets pressure Facebook, it will pay them, too.

News publishers shouldn't stop there, though. It's an aberration that social media and search engines have become top distribution channels for many of them, supplanting their own websites and undermining both advertising and subscription revenues.

Because of this, any strategy change by Facebook and Google requires tweaks, sometimes even major changes, to the way content is displayed and packaged.

Publishers need to pay more attention to projects such as the Brave browser, designed to help them get paid both directly and through ad revenue-sharing.

They also need to work doggedly on changing online ad industry standards, shifting them from a dishonest trade in quietly harvested personal data to conscious arrangements in which people are paid, in cash and in quality content, for viewing ads.

It's also time for industry-wide agreements on better paywalls, which aren't easily bypassed by a cache cleanup or by opening an incognito window in a browser. They would, at the very least, help bargain with internet platforms over carriage fees.

Until recently, all these important fights were complicated by widespread defeatism in the news industry and by the willingness of upstart 'news organisations' to give content away for free in hopes of picking up a few crumbs from the tech giants' advertising feast.

It should be clear now that the defeatism was misplaced and the dumping didn't work for anyone. Good content can't be free. It's time for a counter-attack. (Bloomberg View)

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