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10 September 2020

NME: Problems Funding Journalism Will ‘Persist And Worsen’ Unless ‘New Deal’ Struck With Tech Giants

The problems of funding journalism in the digital space will “persist and worsen” unless a new deal is struck with the tech giants to see the content creators fairly rewarded for their investment in news, News Media Europe has warned.

In a blog post highlighting key extracts from its response to the public consultation on the Digital Services Act, NME said that the platforms now “profit disproportionately from third-party content that they do not produce, ultimately to the detriment of media plurality.”

The News Media Association is a member of NME and worked closely with European publishers on the response.  

The NMA is urging the UK Government to follow the recommendations in the Competition and Market Authority’s report on the digital advertising marketplace and take urgent action to tackle the tech giants.   

In a blog post, NME said:  “The profits derived from monetising content are no longer flowing back to media companies and producers of content, and instead stay within platforms ecosystems, which in turn further undermines business models and content production in the broader media sector.

“Ultimately, unless a direct and fair split approach to advertising revenues derived from monetisation of third party content is adopted, or some form of ‘new deal for online media’ is achieved, it is very likely that problems related to funding of media content will persist and worsen, in particular when it comes to news content because it is so reliant on advertising for funding in the first place.

“Both Google and Facebook often reduce the debate about the commercial and social value of journalistic content to a simplistic argument which suggests that the provision of web traffic constitutes a one-way, altruistic and charity-like exchange of value in favour of publishers, who in turn should be grateful for the mere existence of these platforms.

“This is of course a deeply flawed reasoning and demonstrates poor judgement and a lack of consideration for other non-commercial concerns of a broader, social value. This line of reasoning also completely ignores and dismisses the fact that it is third party content, including journalistic content, that brings users in the first place to platforms.

“While the ability of the biggest technology platforms to act independently of other market participants increases, they also play an important role in defining future formats for digital content and are already attempting to unilaterally dictate and shape the future of news, powered through artificial intelligence and machine learning. Google’s Google Assistant and Amazon’s Alexa voice-based assistant are good examples of this.

“Such products already show that providing traffic, advertising revenues, brand attribution or any form of payment or remuneration if any to media companies and content producers, are not concerns at all. This is deeply concerning for several reasons as it reinforces the abusive cycle of exploitation of third-party content along lines that undermine the principle of fair market competition on the merits.”