Google giving $100 million to the media isn't a win

I know the headline on this post probably sounds ridiculous to some (perhaps all) of you reading this, but I'm going to do my best to convince you that I'm right by the end of this piece (maybe some of you can drop me a line via one of the platforms that are mentioned at the very bottom of the page and let me know whether I succeeded or not!) It seems ridiculous, of course, because how could the media industry — in Canada in this case — getting $100 million from Google be a bad thing? Isn't getting a hundred million dollars an unequivocally good thing? How can I, a journalist who has been fired, laid off, let go, and otherwise made redundant from almost every job I've ever had in 35 years, argue that it's a bad idea? Isn't the media industry a financial train wreck?

Many (perhaps all) of those statements are true. The media industry — not just in Canada or the US but almost everywhere — is in a perilous state. Advertising revenue has been in freefall for years, even some of the major mainstream publications have been doing waves of cutbacks and layoffs, and there is no end in sight. Obviously, in that kind of environment, some money for news publishers is better than nothing. But I would argue that the strings tied to the Google funding, and the broader context within which that funding is happening — including Bill C-18, which is the Canadian version of Australia's news-payment law — make it not a good thing. In fact, I think it's possible that the media industry could wind up worse off rather than better.

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Let me get the biggest problem with these laws out of the way up front, which is that the basis for them is fundamentally flawed. The argument made by legislators (and by the media entities that support these laws, most of which are legacy newspaper companies) is that Google and Meta make billions from the news content that publishers produce, and pay nothing for it. This would be a great argument, were it not for the fact that both Google and Meta send hundreds of millions of dollars worth of clicks and traffic back to those publishers, who (let's not forget) willingly choose to have their content appear on Google and Meta's platforms by not excluding them using a robots.txt file.

Why not pay everyone for links?

Forcing the platforms to compensate news outlets for their content amounts to payment for links, which goes against everything the open web was built on. If news publishers get paid when Google links to them, why don't I get paid when Google links to me and my excellent newsletter? Why shouldn't everyone get paid?

There have been a host of attempts to justify these kinds of payments, including a somewhat farcical paper from the News Media Alliance in 2019, which used an offhand comment by a Google exec years earlier to conclude that Google makes $5 billion a year from news links. This isn't worth the digital ink it would take for me to dismantle it (also, I did it here for CJR). Another more recent study from a Columbia University researcher used more complicated but (IMO) no less ridiculous math to come to the conclusion that Google and Meta owe publishers at least $12 billion for the news content they host. Suffice it to say that neither of these estimates is worth the paper it took to print them.

Funding from the platforms to compensate news publishers has been a bone of contention for quite some time. In Google's case, it has been fighting this particular battle for more than ten years now — the company cut the entire country of Spain off from Google News a decade ago in retaliation for a piece of news-payment legislation that that country had recently passed. But things really started to heat up on the payment front in 2021, when Australia passed a new law requiring the major digital platforms to pay news companies.

Contrary to some of the public perceptions of this law, it didn't compel the platforms to pay publishers directly or lay out specific terms — instead, it said that if the platforms didn't cut funding agreements with news outlets, then the government would step in and impose its own. In other words, that's a nice business you've got there — it would be a shame if something were to happen to it. Faced with that prospect, both Google and Meta signed a blizzard of deals with news outlets in Australia, as my former Columbia Journalism colleague Bill Grueskin detailed in a feature for the magazine in 2022.

One of the things the law didn't require, however, was any transparency around who got paid what —Grueskin wrote that details of the arrangements were "guarded like they’re nuclear launch codes." The dollars involved leaked out in some cases: Nine Entertainment, which owns multiple radio and TV stations and a couple of newspapers, got about $35 million, and News Corp. got $50 million. In all, about $150 million was paid out in the first year (Meta threatened earlier this year to stop paying publishers altogether, and the Australian government is considering changes to the law).

A blizzard of deals

One of the contentious aspects of the Australian law was that because of the way the Australian media market is structured, a lot of the money that the platforms paid went to outlets owned or controlled by Rupert Murdoch, the Australian conservative billionaire behind News Corp, who arguably doesn't need (or deserve) a handout.

There are more than a few similarities to the Canadian media situation. Although there is no one comparable to Murdoch, the country's largest chain of newspapers — an entity known as PostMedia, which owns at least one major daily in virtually every Canadian city — is controlled not by journalists, and not even by Canadians, but by private equity funds in the United States, which took control of the chain by buying its distressed debt. The only major daily that isn't controlled by PostMedia is the Globe and Mail, which is controlled by the Thomson family, descendants of Lord Thomson of Fleet. The family's estimated net worth is about $70 billion (although that hasn't stopped it from cutting staff at the Globe and Mail multiple times over the past few years).

So one of the problems with both the Australian law and the Canadian one is that the funding can help prop up outlets that are controlled by billionaires. The only really effective way of preventing this is to have some kind of arms-length organization determine who is deserving of getting the funding — but that comes with its own problems. The choice of who gets to decide which outlets are worthy can be extremely contentious, and even if everyone agrees on it, you still have a situation where the government (or its designated representatives) are deciding who qualifies as a worthy journalistic outlet.

While Australia's law led to some quick funding deals with both Google and Facebook, Canada's legislation hasn't been quite so successful. The $100 million in funding that Google has committed to gives it a get-out-of-jail-free card, but Meta has opted out of the entire process by refusing to cut any deals, and has cut Canadian news off from its platform completely — anyone who tries to post a link to a news outlet is greeted by a popup error saying they can't do so because of Canada's news-payment law. Whether the Canadian government takes action against Meta for this refusal to deal remains to be seen.

A finger in the dike

In addition to their arguments about the value of links, Google and Meta have argued ad nauseam that they have both funded journalistic outlets and news organizations to the tune of more than $300 million over the past few years. Google's funding came through something called the Google News Initiative, and Meta created an entity it called the Facebook Journalism Project (I wrote a feature about both projects for CJR in 2018, called The Platform Patrons). In both cases, most of the funding was dribbled out in the form of grants, funding for training programs, internships, and other initiatives.

Did any of this make any difference for the vast majority of media outlets? I would argue it did not, apart from keeping a finger in the dike holding back revenue declines for a short time. In some cases, it may even have made things worse by convincing some outlets to invest in new offerings that were left high and dry when the money ran out.

This problem is just one aspect of a larger issue, which for me was summed up by an Australian editor who spoke to Bill Grueskin for his CJR feature. “What if Google decides it’s a bad deal for them?” this weekly newspaper editor asked. “If you need Google funding to prop up your journalism, to keep your journalists employed, that’s not sustainable.” Both the Google News Initiative and the Facebook Journalism Project have been shut down or at least drastically reduced, and most of the journalism-related teams at both platforms have been laid off or redirected towards other business units.

The sad thing about those funds is that while they seem like huge sums for the media outlets in question, they aren't even a rounding error for companies like Google and Meta. Even $300 million is about two days worth of profits at each company, which have market values of more than a trillion dollars. A small sum to pay as a marketing gesture to make it seem as though either company really cares about the news or about journalism, which is what many cynical types (like me) believe those journalism projects were.

Google seems willing to keep spending some of its pennies to mollify the Canadian government, but Meta has clearly decided to draw a line in the sand. According to a recent interview, CEO Mark Zuckerberg is "done apologizing" for things like destroying the media apparently. Whether he changes his mind remains to be seen, but that doesn't change the fact that the Canadian and Australian laws are based on a fundamental misunderstanding of how the internet works, and at the end of the day will not make much of a difference for any media outlet.

Do Google and Meta have an advertising duopoly that makes it hard for media outlets to make any money? Yes. But if that's the problem we want to solve, then we should come up with a law that does that, not use some Rube Goldberg-style, copyright-adjacent rigamarole in an attempt to redirect funds from the platforms to traditional media. That's not going to do anyone any favours, let alone save journalism.

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