U.S. Pointer calculates platform advertising revenue and assumes 50:50 distribution with media companies
“I believe it’s more accurate news value than Google, which claimed 2% of the news.”
As We Demand ‘Usage Fees’, Meta Reduce News Service… “News Still Important”
A study found that platform operators such as Google and Meta have to pay more than $10 billion a year for news usage fees to U.S. media companies. It is argued that operators have “reduced” the importance of news content on the platform as conflicts arose with the government over the payment of news usage fees.
The U.S. media research education institution “Poynter” released a study on the 9th (local time) that Google and Meta owe US media between $11.9 billion and $13.9 billion annually. “It is a fair price for news found through the economics of bargaining,” Pointer said. “Companies say news is not essential, but news is still important to the platform.”
This is the number of advertising revenue divided by 50:50 for media companies and businesses. The researchers assumed that 35% of all Google searches in the United States were due to news content, and calculated that advertising revenue generated based on news content amounted to $21 billion. Meta saw that $3.8 billion in advertising revenue on Facebook was generated through news content, which is the result of considering the total time spent on news content on Facebook at 13.2%.
“Platform companies are refusing to pay for news copyrights and are passive in providing data such as audience traffic,” Pointer said. “Google and Meta have become rich in advertising revenue by attracting the eyes of the world to the platform by lowering the unit price of news sales.” Some leading media companies, including the New York Times and the Guardian, were able to offset their losses with subscriptions and other income, but most media companies suffered from difficulties, making “news desertification” (the disappearance of local newspapers) a global problem.”
Some analysts say that news is less important to the platform. According to a report released in March by U.S. consulting firm NERA, news content accounted for less than 3% of the content users see on Facebook feeds. Google also said that as of 2022, news search terms accounted for 2% of all search terms, adding, “We don’t make money from news.”
Pointer protested the view. “Our estimate ($11.9 billion to $19.3 billion) is based on a decades-long database of news licensing agreements as well as Google’s recent contracts with the media,” Pointer said. “I think this is a more accurate assessment of the value of news than Google’s figure that 2% of search terms are related to news.”
“If media outlets can collectively negotiate, such as the Journalism Competition and Preservation Act being enacted, they will be able to receive much more money than now,” he said. The bill gives media companies the authority to collectively negotiate with platforms such as Google.
JULIE KIM
US ASIA JOURNAL
