The News Business Sinks Ever Closer to Rock Bottom

A consortium of newspaper publishers has just asked Congress for the ability to negotiate collectively with Facebook and Google.

A left hand holds an iPhone with The New York Times' homepage displayed on the screen.
The New York Times on an antique iphone (Robert Scoble)

A consortium of newspaper publishers are preparing to take the unusual step of begging the nation’s legislature for the right to collectively negotiate with Facebook and Google.

(Generally, antitrust laws forbid this kind of collective bargaining because it reduces economic competition, except in specifically legislated cases such as labor unions.)

It’s easy to see why publishers want to team up and bargain as one: Facebook and Google continue to take what they want from the news media—content to churn through the News Feed and ever-more-recent search results—while soaking up all the advertising profits available. This is a game where the distributor keeps almost the whole pie, and only so many news organizations can survive on the scraps the Internet platforms allow to fall to the floor.

So, how’d we get here?

We can radically boil it down to three movements.

1. Starting at the beginning: Ask most newspaper people and they’d tell you the “original sin” was that news gatherers decided to give away their product for free when they went online. This is a ridiculous frame (for reasons I’ll get into) but this would be most people in the news business’ common understanding.

It was the ethos of the time that stories should flow around the Internet, unburdened by payment systems. The key underpinning of the whole web was the link and anybody had to be able to view a link for it to be of maximum value. That was just an axiom of the early web.

So, (most) newspapers went along. Foreshadowing. But everything had changed: They were in an entirely different business and didn’t realize it.

2. Google took advantage of all the high-quality pages, and the links between them, being freely placed on the World Wide Web. They took all those links and turned them into the data that powered their search engine.

Google became the best place to find out about the world. One could know what was going on without a newspaper or a TV or a radio.

As Google gained users, newspapers gained greater reach and readership than they’d had before. Sure, most of them were visitors from outside the metro areas that their advertisers wanted to reach, but the business would fill itself in, everyone hoped.

Google, meanwhile, was figuring out its own business model, which turned out to be sponsored links running next to search results. They created an easy way to buy advertising and a backend that could tell you precisely how well ads were performing. (Other people were doing similar things, but only one of them has become one of the most valuable companies in the world.)

Turns out that many small, local advertisers preferred the Google way of doing ads to the newspaper way of doing ads. Combine that with the hit from Craigslist taking mainstay classified-ad business, and newspaper print advertising was in trouble.

That would have happened with or without the so-called “original sin.” The disruption came to the papers: their local/regional business practices got stomped by the efficiency of the technology business.

In the new advertising world, a reader wasn’t worth very much. Maybe a few cents a visit. But there was always a hope: more scale. More visitors meant more pageviews, which meant more ads, which meant maybe the news organizations could pay their journalists with enough pennies from web ads.

Thus, people are always searching out scale, traffic, visitors, pageviews, ad inventory.

3. And who has the scale? Facebook.

For a long time, Facebook was happy to send readers to news articles, but it was incidental to their larger concerns. And then came, roughly, August 2013, when Facebook turned on the taps for news organizations. Charlie Warzel noted it in Buzzfeed at the time: “traffic from Facebook referrals to partner network sites are up 69% from August to October of this year.” But he was just spelling out what many in digital media knew from their own traffic reports. Traffic was through the roof and it was all coming from Facebook.

“Facebook has sent unprecedented levels of traffic to publishers across the internet in recent months, a dramatic and unexpected increase affecting a large range of sites serving a wide variety of content,” Warzel wrote.

BuzzFeed’s chart of Facebook traffic to a network of 200 sites from October 2011 to October 2013 (BuzzFeed)

Facebook enacted this monster change in the information flow of the world in two ways. One, it seemed to start privileging news content from the best, say, quartile of publishers. Stories from these publishers were more likely to show up in your newsfeed relative to stories from other publishers (or people).

More significantly, for the long-run, Facebook also began—essentially—running house ads for different media brands. For several months, they suggested that users should follow media brand pages. This was basically an in-kind gift from Facebook to a variety of publishers. And it gave them much larger pages from which to promote their stories.

The tactics worked. Facebook began to generate huge scale for publishers. Now many sites have “audiences” of 15-20-25-30 million unique visitors, many times the size of even the largest print publications. (USA Today’s average circulation is down substantially to something like 3 million.)

But that also put publishers at the mercy of Facebook’s News Feed algorithm and corporate practices.

In the midst of the Facebook traffic surge, David Carr wrote a column about Facebook’s new dominance. “The traffic they send is astounding and it’s been great that they have made an effort to reach out and boost quality content,” a publishing exec told him.  “But all any of us are talking about is when the other shoe might drop.”

The other shoe, we presumed at the time, was that Facebook would close the taps for one reason or another. And they partially did when they began emphasizing video, which is one reason so many media companies are “pivoting to video.” They’re merely running where Facebook’s corporate finger is pointing.

But worse, the scale that Facebook rapidly induced also caused inflation of a sort. The currency of digital advertising was traffic and suddenly there was a lot more of it. So what do you think happened? All that scale put downward pressure on how much advertisers were willing to pay publishers. Which meant that you needed Facebook’s scale just to maintain your business.

Facebook’s control of the attention of 2 billion people and the media has done a lot more strange things to “the news.” Just a couple examples: Everything’s spikier now—meaning fewer and fewer stories drive more and more traffic. More publications are clustering around fewer themes and news events because most of the available Facebook traffic will come around a single news item, whether it’s a John Oliver rant or a Trump associate’s meeting with someone or a doctor dragged off a plane or covfefe.

These are some of the complex effects that what I’ve long called Facebookworld has brought to journalism. And so I can see why newspapers would like to sit down with Facebook to tell them about their problems. Tech has wound its way around journalism like a vine around an old tree.

We’ve just seen the consequences of the strange information ecosystem Facebook and Google have created. In the crucial months leading up to the election, hoaxes, lies, and fakery proliferated right alongside (or on top of) serious coverage from serious reporters. Since the election, a revitalized press has taken to covering the many problems and scandals of the Trump administration with intensity.

In other words, in the last year, we’ve been shown the value of a trained press corps supported by journalistic institutions that know what they’re doing.

And at the same time, papers and other journalistic outfits continue to struggle with creating digital businesses that can support enough journalists to make a difference.

The press has never been more needed nor more endangered.

The newspapers probably won’t get the help they need from Congress. And even if they do, they are in a weak position vis-a-vis the two most powerful information gatekeepers the world has ever known.

The good news is that Facebook and Google, both the individuals inside of them and the corporate structures, may finally want to help the business of journalism. The bad news is that, at this point, these two companies may not be able to fix what they’ve broken.