News outlets ask Congress for help in ad revenue dispute with Facebook and Google
Major media companies, including the New York Times, the Washington Post and Wall Street Journal owner News Corp., are reportedly joining forces in an effort to renegotiate the advertising revenue they receive from Facebook Inc. and Google Inc.
The media companies are seeking an antitrust exemption from Congress that would allow them to bargain with the Internet giants collectively, in order to “change the balance of power,” the New York Times reported on Sunday.
Facebook and Google have in the last few years become the main online destination for millions of consumers looking for news content, and as a result have captured the majority of online ad revenue and, by some estimates, all of its growth. More specifically, the two companies receive much of the related ad revenue based on newspaper’s content, despite not actually creating any content themselves.
Newspapers argue that’s unfair on them as they struggle to adapt to a digital world where most people expect news to be freely available. Various media outlets have tried to fight for a better deal individually but failed, and now some of America’s biggest believe they can get a better deal by joining forces.
The New York Times revealed that Facebook and Google hold almost 60 percent of the online advertising market between themselves, citing statistics by eMarketer. In February the Wall Street Journal stopped allowing Google users to read its articles for free. That led to a bump in its number of subscribers, but also saw traffic from Google fall by 44 percent, according to Bloomberg.
“Quality news providers are the supplicants and the serfs,” the New York Times said, in contrast to Facebook and Google, which are “the royals of the court.” Not only are news organizations losing revenues from advertising, but they also argue that the current balance of power encourages “fake news” while threatening the “endurance of quality journalism.”
The push for Congress to approve a limited antitrust exemption is being led by the industry group News Media Alliance, which outlined its hopes in an op-ed in the Wall Street Journal. The move was described as “an extreme measure with long odds,” which means the exemption is unlikely to be granted.
However, the alliance said industry chiefs believe that it’s worth taking a chance because it believes Facebook and Google pose “a bigger threat economically” than President Donald Trump does with his own controversial rhetoric. The alliance also has a “trump” card of sorts in News Corp.’s founder and Executive Chairman Rupert Murdoch, whose sway on the current administration is said to be “without parallel” in the media world.
Image: simplyrikkles/Flickr.com
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