Google Agrees To Pay News Publishers $1 Billion For Their Content

Highlights:

• Google plans to pay $1billion to news publishers over the next three years in licensing fees.

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• CEO Sundar Pichai announced on Thursday, Google’s biggest financial commitment to date will pay to partnered publications to create and curate high-quality content for a new product called Google News Showcase.

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Background

Google has been a longtime frenemy with the world of news. Regulators around the world have been intimidating Google with policies that would compel them to pay publishers. News publishers like Rupert Murdoch’s News Corp and German media giant Axel Springer have been making noise for almost a decade that Google should pay for their content but the tech giant refused. To reclaim its credibility in the news publishing world, Google is launching Google News Showcase. CEO of the tech giant, Sundar Pichai said in its blog post that Google will pay $1 billion to news publishers in licensing fees.

Why it matters

In 2018, Google pledged $300 million effort to help news publishers. This announcement develops that effort further and its new product “Google News Showcase” would collectively pay selected publishers for high-quality content for new story panels that will appear on Google News. The initiative is live on Android devices and will eventually appear on Google News on iOS.

Details

The Google News Showcase will be first launched in Brazil and Germany. As quoted in Axios, Brad Bender, Google’s VP of product management for news said, 

Our approach with Google News Showcase is a very different approach for Google from a product standpoint … It’s a new way for us to connect users to stories that matter. It’s a new way for us to work with publishers, but to also make money from their content beyond Search and News. And of course, it’s a new way for Google to support the future of quality journalism.

• Google News Showcase features the editorial curation of award-winning newsrooms to give readers more insight into important stories and helps publishers drive high-value traffic.
• The highlighting feature in the Showcase is ‘panels’ (as shown in the image) which allow publishers to package stories with more context that appear within Google’s news products.
• Publishers can include features like timelines, bullets, and related articles in the story panel. Eventually, they will be able to embed other components like video, audio, and daily briefings.
• Pichai said, “This approach is distinct from our other news products because it leans on the editorial choices individual publishers make about which stories to show readers and how to present them.”
• Similar to Apple News, Google will help to hedge their bets by offering free access to paywalled articles on certain participating websites. This might help publishers to convert visitors to subscribers.
• Bender said the funding wouldn’t be able to cover all news organizations so selecting the publishers on a market-to-market basis, with a focus on newspapers or sources with established audiences and significant local or regional news outlets.

 

Go Deeper

The panels designed for Google News Showcase promote publishers’ brands within Google’s products which will allow readers to get more perspective from the publisher.

• Publishers have often accused Google of stealing revenue as well as minimizing brand value. However, in the new product, the panels are directly linked to the publishers’ site which in return can monetize the traffic.
• Taking lessons from the rivals, Google will allow users to personalize feeds within Google News Showcase which means users can follow specific publishers.

 

The Bigger Picture

Google and Facebook specifically have made millions in advertising in the last few years. The news publishers weren’t able to compete and therefore started looking for alternative sources of revenue.

• Regulators across the world have been trying to bring policies and reforms that would require Google and Facebook to pay publishers for their content.
• Google launching Showcase in Germany is notable and surprising given that publishers in the country are involved in a years-long legal battle with Google over copyright issues. In the end, Google won the case.
• Google has been facing a lot of anti-trust scrutiny in Europe and therefore the tech giant needs to rehabilitate the image.
• According to a Financial Times report, Angela Mills Wade, executive director of the European Publishers Council said that her members were “quite cynical ” and said,

By launching a product, Google can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production.

What’s next

 Google initially launched in Brazil and Germany but will gradually expand to other markets in Germany, Brazil, Argentina, Canada, the U.K., and Australia. Google says it has signed deals with more than 200 publishers. The first publications to launch will be Der Spiegel, Stern, Die Zeit, Folha de S.Paulo, Band, Infobae, El Litoral, GZH, WAZ, and SooToday. Pichai said that India, Belgium, and the Netherlands will be next on the list for expansion.