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Advertising Revenue-Google vs News Outlets (27 February 2021)

Advertising Revenue-Google vs News Outlets (27 February 2021)

Context:

The Indian Newspaper Society (INS) wrote to Google on Thursday asking it to compensate Indian newspapers comprehensively for the use of their content, and to share details of its advertising revenues.

Background:

  • This letter coincided with the Australian Parliament passing a law requiring Google and Facebook to pay media companies for content.

  • The Society noted that over the past year publishers across the world have been raising the issue of fair payment for content and of proper sharing of advertising revenue with Google.

  • It has also noted that Google has recently agreed to better compensate and pay publishers in France, the European Union and Australia.

Summary of the Debate

Issues which INS is raising with Google and the overall issue of sharing of advertising revenue:

  • Newspapers for over for the past 10-20 years across the world, there has been a change in the pattern of how the revenue and the business model starting with the west in the mid 90s when Google first came and disrupted the whole process.

  • Over the years, advertising revenue has gone through these tech platforms and in the past 4-5 years as digital advertising has really eclipsed print advertising across the world, newspapers have seen that advertising revenues have decreased.

  • For newspapers, to sort of function and their business model is advertising and cover price but in the digital space we are hardly seeing much of advertising revenue from the digital area.

  • Almost 80 percent of advertising goes to these big tech platforms and Journalism costs a huge amount of money resources boots on the ground.

  • Last year Google earned about $ 182 billion from the news content that they are showcasing. Similarly, Facebook got about $ 86 billion.

  • Now, this kind of money is a huge money and entirely, they are dependent on the content provided by the publishers world over including India.

  • Initially, Google and Facebook take a very strident stand saying that particularly under the USA law, they have a right to what is called fair use of the content, fair use is not the complete use of the content but about snippets and headlines.

  • They also claim that it is they who bring the traffic to these news websites.

  • But offline what has happened is the Google's practice has been that a user did not actually go to that particular content website, he can almost get a lot of information from the Google itself of what the Google displays.

  • Therefore, the publishers have made a case that there is a lot of financial cost involved in generating news and if that news content is being monetized by Google, it's very fair that it be shared.

INS has asked primarily three points:

  • It is our content which provides authenticity on Google and all these big tech platforms. Content costs money, it's our original reporting, it’s proprietary content so that powers these search engines.

  • INS says that publisher should be compensated for much more than right now in terms of advertising revenue. INS said that we should get at least 85 percent of advertising revenue.

  • During the search, credible news site links should come up rather than some obscure site which does not have any credibility.

Steps taken by other countries for fair payment for content and of proper sharing of advertising revenue with Google:

Australia and the European Union have addressed this in two separate ways:

Australia:

  • Australian government took a strong stand, the Australian Prime Minister spoke to Indian Prime Minister too and saIndian Newspaper Society asks Google to increase publisher share of ad  revenue to 85%id they were bringing a law where they would straight away leave it to the arbitrator to decide.

  • Under the Australian law, it was proposed that the Google could perhaps take a particular fee and the publisher could state a fee and the appointed arbitrator could just fix the sum.

  • Under the News Media Bargaining Code, they're sort of saying that ‘X’ percentage of your revenues have to be shared with content providers, they're not getting into the copyright aspect of it.

  • Now, once they realize that Australian government has taken a strong stand, now Google has already started entering into business discussions with the Australian publishers.

  • Similar thing is happening in Canada.

European Union:

  • After the European Union passed a law in 2019 the France has already taken the first step and the Google is engaging the French publishers which show that somewhere along the Google realizes that the publishers have a strong case and the case is that if you are monetizing what we are publishing you better share the cost.

  • In France, they recognize neighboring rights, so what neighboring rights means is that the link or the snippet which appears online, the French codes have recognized that, that belongs to the publisher and the publisher can get compensation for that.

What can be the key aspects looking at Indian perspective here?

  • There could be different kind of content provider one could be a local content provider one could be national content provider.

  • There are different beats in which how the whole media operates, so it could be divided beat wise, it could be divided localized way, it could be divided topic wise.

  • It could be based on the amount of content or the quality of the content or the experience of the content provider.

  • It could be different business model worked out based on this either INS as their representative body or the people who understand this industry very well.

  • The extracts could be taken out of them and it could be made suited to Indian conditions because Indian media as a whole is not exactly like what this western media or foreign media is, we have a different way of looking at the news and content and our content is different, content is viewed differently from different platforms.

  • A very Indianised version of this Australian code can be generated.

  • Article 11 and 12 which European Union started using in 2019 onwards. Based on Article 11 and 12 model also we can make some rules.

The way these digital tech giants work and where are the loopholes?

  • What they'll try to do is they may buy certain establishments, they may invest into these news aggregators or they will find out loopholes from where they'll get content and which will be a copyrighted content for them.

  • So, other Indian news providers will lose on it because these news providers also have sharing agreements with other news providers, so they may get the lowest part.

  • To stop this now, we need to have law and very fast so that it acts as an enabler to Indian business houses, Indian news media producers and news media houses which are authentic news providers, content providers.

  • If we go slow on this, they will definitely try to use their muscle power and buy out some entities in India and then they will have copyright related laws in their favor from which they can extract.

Way Forward:

  • We need to have digital broadcasting code, without having this digital broadcasting code where we also be party to the other codes, we may have some approximate mapping to our laws when we have this, then only this tech giants will understand that they need to bow down to our law.

  • It is the same case what happened with the IT rules 2021, the moment Indian government drafted the rules, they started making changes in their policy.

  • In other countries like Argentina and Brazil, they are sharing their revenue with a few content providers, but in India, it's not the case, they have not come into agreement with.

  • So, once we have the law or again same rules under the original act of Press Trust Act or under the IT Act 2000, once we formulate the rules under the law and when they are responsible towards the newspapers then they'll definitely come on table and start sharing and the amount also can be fixed.

  • Having a law or a model like on the lines of Australia, the forcing compliance will be easier, otherwise it's rather some kind of a lose arrangement.

  • Even Indian publishers would like to have the business model of directly negotiating with Google because it will not be easier to fix one particular rate at which the payment should be made for all the publishers because the cost involved in each of these publishing houses is different, therefore there could be a case for a business model.

  • Having a law or a code will have some kind of a pressure on these tech giants because otherwise they feel footloose to do what they want.

  • There should be a system where the companies, the publishers will be free to negotiate with the Google and fix up rate.

  • At the same time, there would be a general code or a law that will make it very clear to these tech giants that if they have to do business in India and if they are making money out of their business in India then they will have to share as per the content usage as per the copyright liability that is involved.

Conclusion:

  • It is very important that tech giants for the sake of the vast Indian readers who get in a bunk of their reading material free of cost that they should compensate the Indian publishers, that's important because Indian publishers are largely still following the public spirited journalism as a model. Otherwise, what would happen is, the publishing companies will be forced to you know bring more of their content under the pay wall.

Indian Newspaper Society (INS)

  • The INS (formerly Indian and Eastern Newspaper Society) acts as the central organization of the Press of India, an independent body authenticating circulation figures of newspapers and periodicals in India.
  • It plays a major role in protecting and promoting freedom of the press in India.
  • The society was founded in 1939.
  • Its headquarters is in New Delhi.
  • INS membership comprises the owners, proprietors and publishers of print media who discusses and suggest various measures to the government regarding the problems related to the newspaper industry.
  • It is a kind of pressure group which works to protect the interest of newspaper industry in particular and print media in general.

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