Governments didn’t make Google pay publishers

After years of fighting and suing, publishers finally got Google to pay for news. But it wasn’t the many lawsuits that got Google there.

Today, we are announcing a licensing program to pay publishers for high-quality content for a new news experience launching later this year. This program will help participating publishers monetize their content through an enhanced storytelling experience that lets people go deeper into more complex stories, stay informed and be exposed to a world of different issues and interests. We will start with publishers in a number of countries around the globe, with more to come soon.Google

After years of fighting and suing, publishers finally got Google to pay for news. But it wasn’t the many lawsuits that got Google there.

The Internet has turned news into a commodity. Back when the news was printed, it was very important to be the first one to break them. Then came the TV and shortened the time of exclusivity tremendously. But the Internet finally made it redundant. As soon as the News is out, it’s old news. As a result, the biggest value publishers can drive is not by spreading news but with exclusive content. Google never paid publishers because it didn’t want to pay for a commodity.

Publishers need the traffic from Google to survive with the little ad revenue that’s left, which has led to some horrible user experiences. But then, something interesting happened. Some publishers turned their back on ad revenue.

Starting with the New York Times, publishers like the Wall Street Journal or The Information realized that you could go direct-to-consumer if your offering was good enough. Readers simply paid publishers directly, instead of having to dig through a flood of ads. Granted, that didn’t work for all publishers but they learned how the game works.

This is directly connected to the reason the NYT left Apple News last week.

Apple News

Starting on Monday, Times articles were no longer appearing alongside those from other publications in the curated Apple News feed available on Apple devices.

The Times is one of the first media organizations to pull out of Apple News. The Times, which has made adding new subscribers a key business goal, said Apple had given it little in the way of direct relationships with readers and little control over the business. It said it hoped to instead drive readers directly to its own website and mobile app so that it could “fund quality journalism.”New York Times

Apple’s push into news created competition to Google News from the start but because Apple News takes a 30% cut from the ad revenue, it was never a cash cow for publishers. Apple News Plus charges readers $9.99/month but the revenue share left for advertiser still doesn’t seem to significant. As a result, the NYT pulled out and focused on its own platform.

The move is directly connected to my main article from last week about The Newsletter Renaissance and why I pulled away from Substack: Content ownership is not enough nowadays. You need platform ownership as well because only platform ownership allows you full control over the relationship with your audience.

That brings us back to Google. Google is paying publishers not because News have become more valuable over time. They are actually less valuable. But newspapers switching to a direct relationship with their audiences is a problem for Google, Apple, and Facebook. Cutting out the middleman means no money.

And that brings us to Facebook

Facebook’s News Tabs

In October 2019, Facebook rolled out the News Tab, a section in the app with links to newspaper sites. The publishers are paid and selected, meaning not everyone can participate in the program. That has a strong reason.

Paying all publishers means also paying the ones that have an engaged audience but extreme political positions like Breitbart or The Daily Stormer. Freedom of Speech means everyone can publish what they want on the internet, as long as it’s not defamatory or discriminating. There is also an audience for that, whether we like it or not. In fact, the more extreme an opinion, the more engaged the audience usually is. And that’s the reason Facebook selects the publishers it pays. Imagine the outrage if Facebook paid Breitbart millions of dollars. Niemanlab wrote an article about that that’s worth your time: https://www.niemanlab.org/2020/06/google-paying-publishers-is-more-about-pr-than-the-needs-of-the-news-industry/.

Google plans exatly the same: paying only selected publishers and saving themselves from a lot of trouble.

Another interesting parallel between Google and Facebook is that Google’s new News experience will live within Google News and Google Discover. Discover follows a different concept than other Google products like Search or Youtube.

Almost all Google products are based on intent. You search for something, Google knows what you’re interested in. But Discover is a push channel. It shows you content before you perform an action, just based on your profile. Facebook’s News tab is, of course, also based on behavior (engagement). All social networks are. By showing the new News experience in Discover, Google - as so often - directly competes with Facebook.

That’s a second motivation for Google to pay publishers directly: to compete with Apple News Plus and Facebook’s News tab.

Google

We’re now coming back to Google full circle. There’s another reason that’s deeply engrained in Search: showing Top News in organic results.

Top News are the fist thing a user sees when a Query deserves Freshness (QDF), which changes the user intent of a query. Imagine you ranked for a keyword like Wuhan or Corona before the COVID 19 crisis. You now have a bad time because the context of people searching for these keywords changed and you’ll probably get a lot less traffic. That can happen with a lot of keywords and Top News are one of the best indicator for that!

For Google, this matters because if it pays publishers directly, it might be able to show more Top News results for articles that are gated. In simple terms, it increases the quality of search results for a potentially small price.

Where available, Google will also offer to pay for free access for users to read paywalled articles on a publisher’s site. This will let paywalled publishers grow their audiences and open an opportunity for people to read content they might not ordinarily see.

From Google’s announcement to pay publishers in the future

After all, the biggest reason as I see is that more publishers might go direct-to-consumer, especially due to the economic collapse of advertisers, and Google might want to grab some of that value before the middleman is completely cut out.

Meredith Levit Kopien, COO of The Times, brought it to the point:

“Core to a healthy model between The Times and the platforms is a direct path for sending those readers back into our environments, where we control the presentation of our report, the relationships with our readers and the nature of our business rules. Our relationship with Apple News does not fit within these parameters.”

Another reason to not just own your content but also your platform.