Google News Business Model Under Global Siege

Google News Business Model Under Global Siege

Google and other search companies are under siege in various nations from news publishers and their lobbyists trying to establish more control over content. New laws and industry association walk-outs are challenging aggregators’ ability to display excerpts of news stories within search results, which could have far-reaching effects.

Google’s Three-Front Battle: Germany, Brazil, France

Germany: The latest effort to re-assert copyright control of news content is happening in Germany, where a new ancillary copyright bill, Leistungsschutzrecht für Presseverleger, is up for debate in the Bundestag legislative body. The bill, which is supported by Chancellor Angela Merkel’s Christian Democratic Union party, will grant publishers a year-long exclusive license for all publishers’ content – including excerpts, the kind usually displayed in Google News and Yahoo! News within search results. With that license, publishers can choose to withhold content from these results or charge Google and other search engines a fee for including the results.

The Leistungsschutzrecht hit Google’s radar in August when it was first proposed, and is the subject of an online petition launched Tuesday from Google Deutschland. The site’s welcoming message warns of the Bundestag’s debate of the new copyright bill.

“This would give publishers the right to prohibit search engines and other services from displaying articles within search results or else be subject to payment. For you, it would become much more difficult to find the information you are looking for on the Internet,” the site warns. A short video showing how Google Deutschland has served the German community with news and information in the past decade is also prominently featured (and even English speakers can chuckle over the how-to-spell-that-damn-Iceland-volcano’s-name gag).

The official argument for the bill is safeguarding Fair Use of published content, which publishers argue Google and other aggregators are abusing. But it is also likely an attempt by German news companies to build a revenue stream in the wake of the no-paywall decisions many global news publishers made when they first put their news content online. Only a few media companies have been able to create and maintain profitable paywalls – in the U.S., the Wall Street Journal is the best example -and even fewer have been able to successfully add a paywall after initially going with free content  – the New York Times being the prime exception. (For more on the paywall issue, see Newspaper Paywalls Are A Good Thing – Here’s Why.)

Brazil: The revenue issue appears to be the key. Google News, which seems to be the primary target of this bill, already has an opt-out policy for publishers who don’t want their content displayed within search results. In October, 154 Brazilian members of the Association of Newspapers opted eout en-masse when they decided that Google should have to pay them for excerpted content.

The move appears to be working out for Brazil’s newspapers. The 154 papers involved comprise about 90% of Brazil’s circulation, according to PaidContent, and that could be one reason that the papers’ sites have not lost significant traffic since making the decision. This seems to rebut Google’s big argument why posting headlines and excerpts is good for content providers: that it drives traffic to the news sites.

The German publishers may not trust other parties to abide by a blanket opt-out approach – leaving them to rely on legislation. Google’s response is to drum up enough public support among German voters to get the CDU and publishing lobby to back off. If that fails, of course, Google can always turn to the nuclear option: simply stop posting news site results altogether.

France: That’s what Google is already doing in France. Gallic lawmakers are urging the search giant to voluntarily pay content providers for search results by the end of the year, or else the French government will consider legislation similar to Germany’s. Instead of playing the petition game, though, Google is threatening to stop posting French news results if the government gets involved. One reason for the combative approach is that France has already been playing hardball with Google by leading the European Commission’s investigation of Google’s search algorithm for possible anti-competitive practices.

Playing Chicken On The Information Superhighway

It would seem like a no-brainer that content creators should get paid. And indeed, no one is really arguing that. All of these issues surround Fair Use arrangements that say others can use portions of content to illustrate a point or explain the broader arguments made in the original content. It’s the same thing that lets a writer like me quote another media outlet’s content. A little bit, and as long as I explicitly name the source material.

But publishers object when someone builds a business model on nothing but Fair Use-derived content, which is what Google and Yahoo! appear to be doing. The publishers argue that in the aggregrate, this transcends Fair Use.

But Google has scrupulously avoided directly making money with its News service. There are no ads on Google News pages, though there are ads on main Google search results pages, which can include relevant news articles. Yahoo News does include ads within its service, which bolsters the publishers’ argument.

Then there’s the very model of Internet searching itself. Former Google staffer Matthew Carpenter-Arevalo outlines the point quite succinctly: The Senior Community Manager, Global Shapers Americas at the World Economic Forum, Carpenter-Arevalo calls the disagreement between the French media and Google a “high stakes game of chicken” on the information superhighway.

Carpenter-Arevalo argues that the publishers’ real beef with Google and other search engines is that these services level the readership playing field in a new way. The major newspaper Le Monde, for instance, enjoys a very rich cultural and economic place in French society, right down to prim-o real estate in the newsstands on the street.

“Contrast to the online world and in Google’s eyes Le Monde is but one of an innumerable and uncountable chattering voices providing information about what’s going on in France. Of course Google’s algorithm does recognize Le Monde‘s stature and rewards it accordingly and handsomely by sending millions, if not billions of clicks its way every year,” Carpenter-Arevalo writes. “Nevertheless, unlike the newsstand where the probability you buy Le Monde may be 1 in 4, on the Internet the chance you may read Le Monde may be 1 in 1000, such are the exponential ratios in the world of abundance.”

In that kind of environment, he continues, Le Monde and other big players in the media world can’t help but feel threatened. This is why they believe they should be paid for the privilege of posting their content anywhere, including search results. 

The Loss Of Neutrality

If Google and the publishers can’t reach some kind of payment agreement, Google may indeed yank news sites’ results in the countries in question. If Brazil is any indication, that may not hurt either side in the short term. But this legistlation – and even the kerfuffle itself – could be the start of a trend where media sites content is increasingly unavailable on Google’s search results. That could make searching on Google a less rich experience and open opportunities for competitors like Yahoo and Bing grab market share by making their own licensing deals. Google’s sweet “we farm the Internet for free” days may soon come to an end.

The war between news publishers and search engines could have collateral damage as well. For users, search results might no longer be truly neutral, but rather based on which media outlet was licensed to appear in which search engine’s results. It’s hard to see how that helps anyone.

 

Image courtesy of Shutterstock.

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