There Are Only a Few Possibilities for the Future of News

The announcement that a large group of news media publishers are banding together in an attempt to bargain collectively with Facebook and Google over revenues is a big deal. And long overdue. But realistically, there are only a few ways that the future of the journalism industry can turn out.

Newspapers have traditionally been very protective of their own independence, which is nice when they are, for example, reporting on competitors without fear or favor, but which also has serious drawbacks, like when it prevents them all from getting together and telling the White House to fuck off with its “on background” briefings. You know that things have gotten pretty dire when a group representing virtually the entire newspaper industry says it will ask Congress for an exemption from antitrust laws so that all of those companies can “negotiate collectively with dominant online platforms.” This represents an admission of reality from old media: Independently, they are now completely at the mercy of Facebook and Google, which suck up such a huge percentage of online advertising dollars that it has become impossible to compete with them. Not only is the old business model of print newspapers dead, but even the updated business model of “smaller print revenue supplemented by online revenue” is dead, because all of that revenue is flowing to online platforms rather than to publishers themselves.

There is never a bad time to mention the fact that the newspaper industry’s decision to give all of its content away free online was a very bad one.

Outside of the media industry, there is not enough discussion of the fact that Facebook and Google now effectively control the American media. By this I mean that these massive and unaccountable tech companies could put any news outlet in America out of business just by flicking a switch and turning off their internet traffic. And even when these companies are acting friendly and well-intentioned towards the idea of independent journalism, the fact is that they have become so dominant in the advertising realm that their very existence is starving media outlets. To death. You can argue tiresomely with J-school pundits about the righteousness of this state of affairs if you like, but it won’t change anything. Here we are.

The good news is that Google, Facebook, and any other online platforms that might rise up alongside them should be enlightened enough to understand that they need the CONTENT that the media provides. Serving up that content is a large part of their own business model. Thus far they have had to pay little for it, and have grown staggeringly rich. At some point soon, there will have to be a way for the companies that produce that content to get a slice of the revenue that Google and Facebook are currently making off of serving up that content. That’s all there is to it. The revenue must be shared with the media, or the media is going to slowly die out until there will not be enough publishers producing the CONTENT that keeps people looking at Facebook and Google, and then the system will break down. (Not to mention, you know, “the public good,” which is a non-revenue-producing byproduct of all this.) So—given the facts that demand for journalism is as high as ever, and that the current state of the advertising business is not sustainable for traditional publishers, and that online platforms presumably understand that they need media outlets to survive somehow—there are only a few ways that this can go.

• The publishers’ collective bargaining plan works. They strike some sort of deal with Facebook and Google in which those companies break off some amount of the advertising revenue they take in and share it with the media companies. There are lots of forms that this could take, but in essence it would mean a recognition from internet giants that it is in their enlightened self interest to allow enough cash to make its way to media for the media to function well, even if that imposes some upfront cost on the internet giants.
• Facebook, Google, and other platforms just buy up newspapers. The Washington Post sold not long ago for a mere $250 million. The market value of the New York Times Company is $2.8 billion. The publicly traded newspaper companies McClatchy, Gannett, tronc, Lee Enterprises, A.H. Belo, and Daily Journal Corporation are valued at less than $2 billion put together. For Google and Facebook (or Apple, or Amazon), these are tiny numbers. They could quite easily buy up a handful of legacy papers themselves and write them off as an investment in content. Or…
• Internet platforms just start their own media outlets. Why buy up old papers when you can become a publisher yourself? Again, the amount of money it would take to launch several major online journalism operations would be tiny in the context of Facebook and Google. They could fund their own journalism from scratch, which could be deadly for many old media outlets but which would have the side effect of making tons of journalists tech company employees. Having tons of journalists on the payroll tends to be good for PR.
• None of these things happen and shit just gets worse. This is not just about newspapers. Even native online media outlets—Buzzfeed, Vice, us, you pick em—are threatened by the current state of affairs. In the long run, if Google and Facebook suck up all of the online ad money, publishers will need to find another revenue stream to support their operations, or they will slowly die off. And despite all the wine clubs and trips around the world and conferences and souvenirs that news outlets sell in their desperate quest to squeeze every last drop of money from their reputations, there is no obvious replacement for the revenue that advertising has always provided. “Branded content” only goes so far. And the smart bet would be that Facebook and Google and their peers get more effective at sucking up online revenue as time goes on, not less. The overall effect of leaving the status quo in place will be more brittle and shrinking budgets for legacy publishers, and, probably, a continued gradual decline in the sheer amount of original reporting. (This has been going on for years now, but the idea that reporting jobs lost at newspapers would be reconstituted at online outlets will be moot if none of the above can find enough ad money to thrive.) In the long run, if the situation grows too dire, it will raise the political pressure to attack online platforms with antitrust actions. So it would seem foolish for Google and Facebook to allow things to get to that point. But that has never stopped anything from happening before!

Good luck with the collective bargaining, newspapers. We really need the money.