It is fair to say that news organization have been having trouble in the revenue realm for a while. In the age of sharing social media, much of their news articles are being shared on the various social networks. However, when you have someone like Rupert Murdoch, he has found a way to command money from social media platforms that in essence promote their news for free.
The executive chairman of publishing empire News Corp, Murdoch issued a statement proposing a new licensing deal between media organizations and platform-owning tech companies. What does he want? He wants platforms like Facebook and Google to pay money to publishers, effectively in exchange for the value news outlets bring to those platforms. Citing the popularization of “scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable,” Murdoch says Facebook and Google should pay money in an arrangement similar to so-called carriage fees.
“If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies,” Murdoch writes. “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.”
It is a tough stance to take. To claim that they are making money off your work, that is partially true. For Facebook, they advertise on their site, but they do not have a news reporting agency. Much like Twitter, they simply trend news stories that are being shared on the social networks. All those news sites can simply make those stories non-shareable. Which would not be a good idea for them as it would decrease traffic to their sites, which their revenue would be impacted.
Murdoch has a situation of not understanding how the internet works. Both sites aggregate their news from people that share it or when their websites post the stories. If Murdoch really wants to make his new stories non-shareable on any social media site, they would see traffic decrease to their respective websites, which has ads. Those ads would receive clicks and thus providing them revenue. This is simply an attempt at double-dipping. Much like the cable companies.
Here’s Murdoch’s full statement:
Facebook and Google have popularized scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable. Recognition of a problem is one step on the pathway to cure, but the remedial measures that both companies have so far proposed are inadequate, commercially, socially and journalistically.
There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism. We will closely follow the latest shift in Facebook’s strategy, and I have no doubt that Mark Zuckerberg is a sincere person, but there is still a serious lack of transparency that should concern publishers and those wary of political bias at these powerful platforms.
The time has come to consider a different route. If Facebook wants to recognize ‘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.