Tech Giants: Changes to the Media Industry?
Google and Facebook may be forced to agree on a price for newspapers for using their stories in news laws being drawn up by the government. If these laws are indeed adopted tech giants will be told to negotiate payments deals with news organisations in order to display their content. To back this up Facebook took around 80% of the £14 billion spent on digital advertising in 2019 (according to the CMA) with both national and local newspapers taking less than 4% in comparison. Given that Google has more than 90% of the sales of search advertising and Facebook controls more than half of the display advertising sector it is clear that both national and local papers really do not appear to be receiving their fair share here.
It is probably best to mention here, that a similar law was passed in Australia last March (https://www.ft.com/content/80db14de-8268-4356-b7fe-a184f319f331). While there had been fierce lobbying from Facebook for this law to be dropped, it did go through and despite the heel dragging from both Facebook and Google (this included both tech giants removing their content in Australia) news outlets are now being paid for their news.
Potentially here the effect that it may have on the UK publication sector would be unmatched. So often we have been seeing publishing businesses going out of business due to the vast number of publications going digital, this may seek to redress the balance and make journalism more profitable again.
We do however, need to bear in mind here that both Facebook and Google have massive headquarters for Europe based here in London, and just as Australia faced backlash for the laws, we may also face a similar sort of backlash. Our economy in this instance could not withstand the loss of highly paid and highly skilled jobs in the sector.
Again, this is another story that will be interesting to watch unfold as it may result in UK businesses receiving their fair share of the digital advertising and publication. However, as we have seen from various press releases, it will be interesting to establish if this law will in fact be actioned or rather it is all just ‘talk’.