The News Media Alliance (NMA) has published a very controversial study. Google should have earned $ 4.7B in 2018 by crawling and scraping news sites and their content without paying publishers. This number is compared to the $ 5.1 billion earned by the news industry in the US in 2018 with digital advertising.
Is Google messing up with media and their business models? At least, this is what the study suggests. “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,” said News Media Alliance President & CEO David Chavern. The NMA represents approximately 2,000 newspapers in the US and Canada.
For many observers, however, this calculation doesn’t really make sense. While Google repeatedly emphasizes the fact that Google News is not being monetized, the NMA relies on statements of former Google manager Marissa Mayer from 2008 to put together its numbers. Back then she said during a conference that Google News is worth around $100M.
The NMA and newspapers such as the New York Times are now being criticized for publishing or disseminating such a study. One can not simply extrapolate from an eleven-year-old number to the current situation. “These calculations on the back of the envelope are inaccurate,” says Google. “The vast number of news requests does not contain any ads.” How much the Internet company really earns by advertising alongside news content will not be revealed.
My 2 cents on the Google and News “study”: There are plenty of legitimate reasons to criticize the big platform approach to news. But: making random numbers and calling it a study is NOT the way to go. “Calculations” like this show an embarrassing lack of business acumen.
As observers also note (e.g. the Columbia Journalism Review), the timing of the publication of the study is exciting. Because in the US, a new law called Journalism Competition and Preservation Act is in preparation, and it is still seeking its approval. It should allow news companies to work together to determine prices in the advertising market. Such a law would strengthen news companies against Google and other market aggregators.
Pushing Google talk about its real numbers
The study (or rather “study”) is more likely to make Google talk about its real numbers and revenue from news content. Yet, companies that pretend to be following the roles of quality journalism, should not be relying on shaky calculations and apparently wrong numbers. Google and Facebook have disrupted online advertising, and this changed a lot for media companies that used to live very well on advertising.
But it can not be claimed that the $ 4.7B would have been given to traditional media companies. If there was no Google, it would probably have been another search engine or a news aggregator that advertisers would pay for – because they are simply useful products where many users consume their news.
Meanwhile, it is also clear that media companies want and need to have their headlines on Google. The search engine delivers around ten billion clicks on news pages per month. If publishers don’t want to be read by the Google crawlers, they have the option to ban them with the robots.txt file. Furthermore, news websites need to sign up for Google News and can go away anytime they want. And by the way, there are also these media houses that receive $ 300M from Google’s News Initiative.