As we look on, seemingly helpless at the demise of journalism, the bread being snatched from professional journalists’ mouths by overweening tech monsters, how did we let this happen? Is there really nothing we can do?
Is it just the horse-drawn carriage yielding evolutionarily to its motorised successor? Or something more sinister to fight with our hearts and swords? And if so, is that the problem – that we’re using swords against their ray-guns? “Video killed the radio star, put down the blame on the VCR”…
With collapsing revenues, commercial journalism businesses have to justify what they do more than ever by a quick commercial return. Over time they will stop investing in longer term strategically and socially important things like investigative journalism that might yield the next Cambridge Analytica story. They will increasingly focus on me-too journalism, following the herd down well-trodden paths with predictable audiences, or Buzzfeed-style listicles and clickbait.
The problem is that Facebook in particular has stolen the news publishers’ revenue without taking the responsibility that must go with it. Virtually all its enormous revenue comes from selling its audience to advertisers. It is able to target consumers in ways that traditional publishers have never been able to achieve, because their audiences don’t volunteer – intentionally or otherwise – the kind and scale of detailed personal characteristics that Facebook’s automatically does. And because it had no print advertising revenues to protect, Facebook’s pricing has undercut that of traditional publishers enormously. Comparable advertising impacts that would have cost thousands can now be had for hundreds.
And yet Facebook claims it is a platform and not a publisher, and as such has hitherto asserted that it is not formally responsible for the content on its service. Not responsible for its accuracy, its veracity, its decency. Like telephone companies that are not responsible for the calls people make over their lines.
Which begs the question: what is a publisher? A publisher sources content and presents it to an audience, and then sells that audience to advertisers. The audience may also pay the publisher for the content if it’s compelling enough. Some exceptionally astute publishers have even managed to get their audience to pay for useful advertising. But the common thread is that publishers source content and then sell it to an audience and/or to advertisers seeking that audience.
Platforms don’t do that. Platforms do not have an audience that they sell to advertisers. They are a service to publishers to transmit information to the publishers’ own audiences: not to those of the platform. Arqiva isn’t a publisher because it operates the terrestrial masts over which TV channels broadcast. It sells its technical service to the channels who reach their own audiences using Arqiva’s services. Platforms like this allow their customers to reach a lot of people and that’s why they’re valuable to publishers. But reaching a lot of people doesn’t make them publishers.
Mark Zuckerberg’s assertion that Facebook is a platform because it doesn’t sell its audience to advertisers, but rather sells a service that allows its advertisers’ ads to be placed in front of Facebook’s relevant consumers, is a difference without a distinction, and that’s being generous. In any event, it doesn’t change the fact that Facebook is absolutely a publisher. It became a publisher the day it started selling advertising for its audience to receive.
Importantly, Facebook is starting to take some responsibility for the content it carries, albeit without admitting the implication, by censoring the content it publishes. Facebook is now realising that it holds its audience in trust. If and when it loses that trust – be it for honesty, decency, functionality, data privacy, service reliability or whatever – Madame Guillotine ultimately awaits. For all the splendour of Versailles, the absolute monarchy ultimately has to provide real sustenance for its people: not cake that isn’t really there.
The journalism industry’s problem is that, along with Google, Facebook is currently keeping most of today’s online advertising revenue without properly paying for the content that’s helping to drive it.
This, by the way, reinforces my view that content never was king. I remember arguing this heresy at media conferences in the 90s. The parties controlling the distribution of content to their audiences have always been dominant.
As Netflix is demonstrating, and as Sky and others have long proven, compelling content driving an audience to your distribution channel is certainly one of the things that makes your distribution channel valuable to advertisers and/or subscribing consumers, because it grows and maintains your audience. Especially if it’s exclusive content like Premier League matches or tent-pole drama. The content is of course also valuable when sold to other distributors or direct to consumers. But in the media market, it’s the distributor that has always reigned.
When the commercial internet dawned, we were tempted to think the dominance of content distributors would be history, as now everyone could publish everything to the whole world. The distributors would be disintermediated. While that may have worked for Justin Bieber, the content consolidators with the strongest brands were always going to be the dominant distributors online, just as they had been in print. Power comes from capturing and holding the attention of the biggest audience you can get. Less true for premium subscription content businesses, it’s axiomatic for advertising-funded ones.
The distributors are – or at least should be – responsible for the content they publish, albeit alongside the original publisher. That’s the key to saving professional journalism. It’s only a matter of time before revenue and responsibility have to come back into balance.
As long as only insufficient revenue accrues to the parties paying the journalists, then journalism inevitably shrinks, and its product that drives the distributor-publishers’ advertising and subscription revenues erodes. The distributor-publisher increasingly loses the trust of its consumers who look elsewhere for the information they need.
Are we actually helpless in practice until the market adjusts? Not necessarily. Regulators worldwide need to stop faffing about how to classify Facebook and Google, and any other self-ordained ‘platforms’. If these companies want to continue taking revenue around the content they present to their audiences, then they are publishers and should be regulated as such.
Since it’s only a matter of time before revenue and responsibility have to come back into balance, let’s make that as short a time as possible to avoid further erosion of journalism in the meantime. Journalism is essential to democracy, and we are living in a time when democracy itself seems to be under threat. We need as much professional journalism we can get.
This could seriously affect the Facebook business model. If it wants to remain a publisher, then it has to pay fully for responsible journalism, bearing the scrutiny and cost of mistakes it publishes like any other publisher. And it must be regulated as a publisher in terms of plurality and market power, perhaps leading to its being broken up or restrained in other ways. It has already bought up actual and potential competition in what seem anti-competitive moves.
If it chooses on the other hand to stop selling advertising to avoid being regulated as a publisher, it either has no business, or it operates as the platform it claims to be and is then only rewarded as such. There could be a middle ground. Spotify pays most of its revenue to the parties that supply its content. Sky was forced to let third party channels use its encryption system on a regulated basis.
The key thing is that regulators must stop agonising over what’s staring them in the face. Facebook is a publisher. Unless and until it ceases to act as such, or at least fully mitigates its damaging effect on the journalism businesses it is currently raping, it should be regulated as a publisher. It’s why we have regulators to deal with market distortions and issues of public policy that the market needs help to address.