Company / division: News Corp
This article is a bit of an oddity – the Wall Street Journal reporting on the Wall Street Journal – but the news itself is important: Google is relaxing the policy that currently penalizes sites like the Journal which no longer allow Google searchers to view an article linked from search results for free. Since the Journal instituted that change, it’s seen traffic from Google (which in turn is likely a big chunk of total traffic) drop enormously, because sites that don’t participate in Google’s “first click free” program are penalized in search results. This is yet another sign of a softening at Google towards news organizations, which have been increasingly critical of its (and Facebook’s) power over them, though Google still seems to be months if not a year behind Facebook in coming around and making serious concessions.
The News Media Alliance, an industry group representing major newspapers, is beginning a push, launched with an op-ed in the Wall Street Journal from its president, to get permission from Congress to act collectively in negotiating with Facebook and Google. I’m linking here to a piece in the New York Times on the topic, but it’s from the media columnist and therefore almost as much opinion as reporting, something I’ve found with most of the stories on this, which feels a little ironic. But the thrust of both the op-ed and the opinion side of the New York Times piece is that the news industry is being lorded over by the digital giants, and that single publications or even media groups are powerless to negotiate better relationships without being able to bargain collectively. That, in turn, would be a violation of antitrust rules unless Congress were to pass legislation providing legal cover, something it seems rather unlikely to do, especially in the current political climate. The op-ed is disingenuous to say the least – this is the money quote, in my opinion: “But the two digital giants don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them.” That feels like a distortion of the true relationship here, which is that Google and Facebook both point people to the content those people find interesting, including content from major newspapers. If those newspapers decide to make that content available for free either on their sites or through Instant Articles or AMP, that’s their decision. But that’s not nearly the same as those companies doing that work “for” Google or Facebook. While the idea that the newspapers face an imbalance of power in negotiating individually with Facebook and Google has more merit, it’s also disingenuous to argue that these two companies are somehow singlehandedly responsible for the inequitable distribution of advertising revenue between them, given their respective audience sizes and all else that ails newspapers and their business models. At the same time, it’s worth noting that Facebook is pushing ahead with its plans for subscriptions and other improvements to how it works with publishers, but publications including the New York Times continue to be skeptical of those changes, which makes one wonder just what these papers would kind of relationship with these companies the papers would find acceptable. All of this merely reinforces my sense that the companies don’t really have any solutions to propose, but in fact are angling for some kind of punitive regulatory action against these companies on the basis of their size and influence.
I commented on a piece a little while ago about how Chase had a member of staff manually go through the sites where its ads were appearing and pare that number back in order to ensure that its ads were appearing on high quality sites against reputable content. That effort paid off for Chase, which saw essentially the same end results from its advertising on 5,000 as it had on 400,000, but it’s a heck of a lot of work to go through. So a service that offers to help brands work through similar decisions without having to do all the work is bound to be appealing, and that’s what News Corp is offering through its Storyful product. News Corp itself isn’t a major destination for online advertising, but the Murdoch empire in total certainly is, thanks to 21st Century Fox and its significant TV ad revenue (21CF alone had around 75% as much ad revenue in 2016 as Facebook did in the US). But this Storyful product is an expansion of News Corp’s ad offerings into a new area which isn’t directly tied to its online ad platform (or those of 21CF). So although the article sets this up as part of a broader war between Murdoch and Google, this is pretty peripheral stuff. But it’s clearly aimed at taking advantage of some of Google’s recent troubles in this area.