Newspapers Want to Bargain Collectively with Google and Facebook
- Jul 13, 2017
The newspaper industry, beset with falling circulation and hemorrhaging advertising revenues, is banding together to counter the digital threat from Google and Facebook.
The News Media Alliance (NMA), representing 2,000 media outlets in the U.S. and Canada, is appealing to Congress for a limited anti-trust exemption in order to bargain collectively with the “digital de facto duopoly” regarding e-business models, revenue distribution and intellectual property protections.
The NMA – which represents The New York Times, The Wall Street Journal, The Washington Post, and USA Today as well as smaller newspapers – notes that the online sites can aggregate content from the newspapers without having to employ reporters, printers, delivery drivers and so forth while consuming a disaggregated bulk of digital ad revenue. This, they contend, puts them at an unfair competitive disadvantage, forcing newspapers to play by the rules of the online giants.
The Alliance also points to federal regulators not taking strong enough measures to ensure fair competition by permitting Facebook's acquisition of WhatsApp and Instagram as well as Google's acquisition of Doubleclick, AdMob and AdMeld. European regulators have recently taken a tougher stance on fair trade by fining Google $2.7 billion for competitive violations.
The NMA also asserts that by receiving a Congressional safe-harbor provision for collective bargaining, it will help everyone concerned by ensuring the integrity over fake news, which is essential to a thriving democracy – particularly now when the public has such an insatiable appetite for content.
According to the Pew Research Center, approximately 50% of all American adults currently use Facebook as their primary news source. Further, Google and Facebook control more than 70% of the $73-billion U.S. digital advertising sector. Newspapers, on the other hand, collected $18 billion in ad revenue in 2016, which is down nearly 65% from 2006. To further put it in perspective, Google is valued at $649 billion, while The New York Times is at $2.8 billion.
Not completely unsympathetic, Facebook plans to meet with the newspaper publishers to discover new ways for them to sell subscriptions on the site, and Google has altered its algorithm in an attempt to prioritize quality news over possible fake news in its search engine.
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Stephen Doneson is an Senior Manager in the Audit and Assurance and Pension Services groups with SEC financial statement audit experience for both public and private companies in the technology, manufacturing, distribution, and insurance industries.
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