Friday, May 07, 2021
On Monday many observed World Press Freedom Day, a chance for people everywhere to assess the global health of a free press and the future of journalism.
As the world marked the occasion, the world’s largest tech companies, including Amazon, Facebook and Google, reported their quarterly earnings. The news for them is very, very good: Their streak of trillion-dollar earnings in 2020 is expected to continue to grow through 2021.
But what’s good news for these tech giants is bad news for most traditional news outlets around the world.
The New York Times reports that U.S. tech giants are “making bonkers dollars” because of the coronavirus, not in spite of it. The effects of the pandemic have been very different for the world’s newsrooms, which have seen an uptick in layoffs and closures since the beginning of 2020 due to the economic downturn and the continuing decline of advertising in newsprint.
The global ad market now revolves around a new core: the algorithmically targeted placements offered by the likes of Facebook and Google. In comparison to traditional media advertising, this technology is a far more economical way to put products (or ideas) before people who are most likely to buy (or support) them.
Quality local journalism has gotten lost in the reshuffle of the advertising economy. These digital-advertising platforms don’t need to employ reporters or produce news content to reach their intended audiences. The latest numbers reflect this change: eMarketer projects that global ad-spending will top $695 billion in 2021, and that more than 56 percent of that will be payments to online advertisers that typically don’t produce local-news content.
To understand what this means, It’s useful to think of U.S. tech companies as extraction industries that take advertising revenues out of local-news economies.
Lawmakers around the world have responded by crafting policies to “make Big Tech pay” for the damage it’s doing to legacy news production.
The News Media Bargaining Code in Australia and the Journalism Competition and Preservation Act in the United States are examples of this response. In effect, these policies seek to force tech platforms into payment negotiations with large outlets in exchange for linking to their content.
Earlier this year, Rupert Murdoch’s News Corp. leveraged the mere threat of these rules to secure a three-year deal with Google that would provide access to the publisher’s empire of news content in exchange for “significant payments” from the search giant.
But is facilitating payment negotiations between new and old media giants really the answer?
The reality is that the market-driven model that once fueled traditional news production isn’t sustainable in a world where attention has become the main commodity.
Any policy solution that merely props up the media’s old model is simply prolonging the life of a commercial news system that never really served all of the people.
“More than simply placing regulatory patches on broken commercial systems, we must intervene at media’s very foundations,” argues media scholar Victor Pickard. He calls for regulatory support of “a positive program that provides robust, diverse, and reliable news and information to all communities — and these communities should be centrally involved in governing and making their own media.”
Free Press believes that creating a diverse and thriving news sector in the United States can be achieved by imposing a tax on online-advertising revenues that fuel the platforms and the attention economy.
The resulting revenue would be placed in a Public Interest Media Endowment and used to fund the kinds of local, independent and noncommercial news that’s gone missing from too many communities. For example, a 2-percent ad tax on the 2020 U.S. advertising revenues of the 10 largest platforms would yield more than $2 billion for the endowment — that’s more than four times the annual funding the U.S. government provides for public media.
This is just one approach that can be modified by other nations facing the journalism crisis. There are many others: Lawmakers in Canada and the United States have proposed the use of tax credits to help fund local journalism. Such proposals are evidence that lawmakers are getting serious about the issue — but these plans won’t deliver the levels of support needed to rescue local news.
Any policy solution must be built on the fundamental belief that public-interest journalism is a social good, that it is essential infrastructure for democracy, and that governments must play a central role in funding this infrastructure if they hope to see democracy thrive.
As we recognize press freedom this week, we should take action to ensure that it gets the support it needs to survive.
Wednesday, April 28, 2021
Racism pays in America — especially if you’re the primetime host of a cable channel that panders to the country’s sizable population of white nationalists.
Fox News struck bigotry gold when it offered its 8 p.m. time slot to Tucker Carlson, who returned the favor by routinely fanning the flames of hatred against immigrants, Muslim and Jewish people, Black and Brown people, the LGBTQIA+ community and anyone else he considers threats to his supremacist world view.
While Tucker Carlson Tonight is among Fox News’ most-watched shows, it’s not his viewers alone who pay Carlson’s $10-million salary. Nor is it advertisers who’ve left the program in droves, refusing to have their products featured adjacent to Carlson’s bile.
Carlson’s enormous paycheck comes out of the pockets of millions of people who never watch his show or anything else on Fox. And there’s very little they can do to customize their cable so it excludes media properties owned by the Murdoch family.
Earlier this week, investigative journalist Judd Legum wrote about this dilemma: While the vast majority of cable-TV subscribers don’t watch Fox News, all of them pay on average $1.72 a month to receive it as part of the standard bundle of channels offered by the likes of Comcast, Spectrum and Verizon. When you lump in Fox Corporation’s other cable properties, including Fox Business News, FS1 and FS2, this monthly payout exceeds $2 per subscriber.
For those keeping count, that’s $1.6 billion in 2020 revenue for Fox News alone — about 57 percent of the station’s total revenue.
Legum asks: “How can Americans who don’t watch Fox News and find Tucker Carlson’s conduct repugnant stop subsidizing his $10 million salary?”
It’s a good question. Unfortunately, the answer isn’t as simple as it should be.
Legum suggests that cable companies could simply offer a package of cable channels that excludes Fox News — something I’ve referred to previously as a “hate-free bundle.” Subscribers could opt to exclude other purveyors of hate and disinformation (think One America and Newsmax). Pay-TV providers in turn would negotiate Fox carriage fees that are much lower than the wildly excessive amounts these companies now pay the Murdochs.
Muhlenberg College Media and Communications Professor John Sullivan says such an offering is common in stock trading, where “you can choose a ‘socially responsible’ mutual fund to avoid investing in stocks that include oil companies or do business with questionable regimes around the world.”
Why can’t we do the same with the cable channels we pay to receive? Subscribers could shave a couple of bucks off their monthly bills by refusing to help line Carlson’s pockets or fund the Murdochs’ hate-for-profit business model.
It’s not for lack of trying. In 2015, Verizon attempted to break the bundle by offering a discounted “skinny” package, with its FIOS customers selecting 10–17 channels in addition to must-carry local channels and public outlets.
But the plan quickly ran afoul of Big Media after Disney and ESPN sued Verizon, claiming that giving consumers choices in this way violated providers’ carriage agreements.
Now, the “Skinny Bundle” isn’t that skinny: Verizon allows subscribers to pick five stations, while the pay-TV giant loads on 120 additional channels (yes, including Fox News).
Following the Jan. 6 insurrection, Reps. Anna Eshoo and Jerry McNerney of California sent letters to each of the dominant pay-TV services asking why they were doing nothing in response to the hate and disinformation aired by some of their standard offerings of cable channels.
The lawmakers asked whether and why each service planned to continue carrying Fox News, Newsmax and One America News when they revisited carriage-fee negotiations with the owners of these outlets.
Until companies like AT&T, Comcast, Spectrum and Verizon step up to break the bundle — or we see policy changes favoring consumer “a la carte” — cutting the cord is the only option for those who don’t want a cent of their monthly bills to subsidize hate and disinformation.
But that isn’t easy. Some who’ve chosen to cut the cord and receive TV “over the top” — via their high-speed internet connection — have customized their viewing options to exclude Fox News. But many of the over-the-top streaming options on offer by pay-TV providers bundle in Fox News; many of these options don’t offer a la carte.
Regardless, the vast majority of people in the United States still opt for cable or satellite TV; cord-cutters are in the minority.
Until they’re given more choice, viewers in the United States need to be clear with the companies that sell them their pay-TV bundles: Paying the Murdochs for content is the modern-day equivalent of subsidizing fascism. “No rhetorical wiggle room should be allowed,” writes Oliver Willis of Media Matters for America.
Long term, we need a serious reckoning with how we got the media system we have, where commercial media collude to push white-supremacist content that harms Black and Brown communities.
We must repair the damage done and rebuild more diverse and democratic media. We can start by turning off the cable cash spigot that fuels big-media bigotry.
Friday, March 19, 2021
Last spring, just as the first surge in the COVID-19 pandemic was peaking, Amy Brothers was busy at The Denver Post covering the fallout across Colorado.
“I really loved my job,” Brothers tweeted. “Going out into our community and telling your stories, on your best days and your hardest always inspired me.”
But that came to an abrupt end one Friday in April. Without warning, Brothers’ bosses at The Post laid off the video journalist along with 12 other newsroom colleagues, all casualties of the plummeting ad spending that struck local-news operations across the country.
“The interesting thing about covering a pandemic is that it’s a national story, but also completely local,” Brothers later told me. “But with fewer resources, you have to choose between the number of articles you can report and the depth of those articles.”...
(Read the entire story at TruthOut)
Thursday, March 04, 2021
Earlier this year, Nobel Prize-winning economist Paul Romer spoke about the benefits of taxing platforms like Facebook and Google to help suppress Big Tech’s dominance and spur competition.
Romer said that you can get there by levying a “pigovian tax” on digital ads. In general terms, a pigovian tax is one that’s levied against any market activity that generates “negative externalities” — or bad consequences across society.
In Romer’s interpretation, such a tax could be progressive when applied to online platforms; the marginal tax rate would increase relative to a given firm’s market dominance. Companies that are becoming more dominant would be taxed at a rate that discourages further control (and the “negative externalities” that result from it). Meanwhile, smaller competitors would pay a far lower rate, fostering their ability to provide an alternative to consumers.
Romer holds up taxation legislation in Maryland as a worthy approach that might inspire other legislatures in the United States and abroad. The state is on the cusp of implementing legislation that would impose a 2.5–10-percent tax on in-state digital advertising.
“It makes perfect sense for them to try and claw back for the citizens of Maryland revenue which has been sucked out of their state and is going to San Francisco, New York, Seattle, and a few other places,” Romer said during a Stigler Center webinar.
In a 2019 Op-Ed for The New York Times, Romer writes that taxing Big Tech is a superior strategy to pursuing antitrust law or regulation. Though U.S. antitrust law may address harms caused by price gouging, he writes, it’s not an effective remedy for other platform harms — such as “undermining the institutions of democracy.”
Laboratories for democracy
There’s a facet of the Maryland tax that Romer doesn’t mention: the funneling of resulting revenues to support a specific remedy. For example, money from Maryland’s proposed tax — estimated to reach $250 million in the first year — will go to the state’s public schools.
While Romer’s version of a pigovian tax might help curb Big Tech’s runaway growth, it’s unclear how that would address many of the anti-democratic harms caused by the targeted-advertising model that forms the economic backbone of online companies big and small.
Maryland lawmakers rightly see better-funded education as a possible fix to the “negative externalities” of Big Tech’s algorithmic amplification — which fuels the spread of disinformation and hate, and incites anti-democratic violence.
Others, including Free Press, believe a tax on algorithmic ad revenues should be levied to support the robust production of news content — with an emphasis on local journalism, noncommercial outlets and other news for underserved communities.
As much as anywhere, the platforms’ negative impacts are felt in journalism: As Facebook and Google have come to dominate the new-media economy, the independent, local journalism that people need to debunk online conspiracies and participate in democracy continues to disappear from communities.
Romer says state legislatures and city councils — and not the executive or judicial branches of the federal government — are the “least bad” ways to do this; they are akin to “laboratories of democracy.”
“If we can allow local taxation we can see some innovation,” Romer adds, “and we can learn from their experience as we approach a kind of national consensus.”
What Maryland is doing should prove a good model for other states to follow and adapt. Congress should pay attention, too.
Free Press Action encourages any lawmakers who take up legislation to tax Big Tech to also consider how the resulting monies should be spent locally. If the impetus for taxes is to make dominant platforms more accountable to the public, the resulting tax money should address the crisis in journalism these companies have worsened.
Monday, February 22, 2021
This week, Australia will put the finishing touches on a plan to force Google and Facebook to pay millions of dollars to local news publishers in exchange for featuring their content on their powerful platforms.
Many in the news industry are hailing Australia’s bargaining code as a way to bring Big Tech to the table and save journalism at a time when news outlets are struggling.
And to the table Big Tech has come, but its response hasn’t been helpful.
Last Wednesday, Rupert Murdoch’s News Corp. announced that it had struck a three-year deal with Google that would provide access to the company’s empire of news content in exchange for “significant payments” from the search giant. That’s a windfall for a conglomerate that’s notorious worldwide for serving its news with heaping portions of disinformation and bigotry.
Facebook responded with the nuclear option: Instead of settling on a fee it prevented any of its users from sharing links to Australian news sources. For several days it was impossible to post news from Australian sources; Facebook’s heavy-handed info blackout extended to government health sites providing critical COVID-19 vaccination information to Australians.
Australia’s bargaining code is an early foray by lawmakers seeking to reset the balance of power between tech platforms and a news industry that’s failing to keep pace with the digital economy. This accounting is important — and governments should be doing more to make these massive online networks compensate for the damage they have done to democratic society — but there are better ways forward for Australia and other countries weighing similar measures to support journalism. Murdoch and others in the newspaper industry are pushing to reintroduce legislation in the United States (what some call “Murdoch’s Law”) which would also force a payment negotiation between powerful U.S.-based news businesses and Silicon Valley.
There are several reasons the Australian experiment won’t work in the United States. If the initial reaction from Google and Facebook is any indication, it doesn’t appear to be working too well for Australia either.
Looming in the background of this debate are major shifts in the economics of news production. The U.S. ad industry has moved away from buying placements in traditional media entities that produced news (like newspapers) toward cheaper, more finely targeted options offered by digital platforms that don’t (like Facebook and Google).
Allowing the most powerful media conglomerates to negotiate payments from the most powerful tech conglomerates is an attempt to rebalance the equation. But giving handouts to News Corp. won’t help the sorts of local, civic-minded news outlets and reporters who have suffered most under this new digital economy. And funding traditional news operations doesn’t meet the needs of communities of color and working-class families, who’ve been long overlooked or misrepresented by U.S. media.
We can’t solve the platform-dominance problem and the journalism-funding problem with a solution that makes both problems worse. Turning every instance of link sharing into a government-mandated monetary transaction would forever alter the fundamental openness of the internet. We need to invest in new journalism — not entrenched corporate power and gatekeeping.
Taxing the attention economy
The best way to do that is by supporting innovations in news production that put journalists back to work, and better connect them with the people and communities they report on. At Free Press Action we’ve put forth better remedies for the United States, including a proposal for a tax on online advertising. The resulting revenue would be placed in a Public Interest Media Endowment and used to fund the kinds of diverse, local, independent and noncommercial news and information that have gone missing.
For example, a 2-percent ad tax on 2020 advertising revenues of the top-10 online platforms would yield more than $2 billion for the endowment. As Facebook’s, Google’s and Amazon’s share of the digital advertising space increases, so would its tax commitment to help save journalism.
Others have put forth ideas for the future of journalism that also deserve attention from lawmakers. We can’t let these be shunted to the side in favor of a legislative proposal that’s being pushed in Australia and the United States by the Murdochs and other media oligarchs.
Instead, we need strong public-media laws that prioritize a free press, civic-minded news production and the interests of the communities news outlets are supposed to serve.
It’s increasingly clear that market-based solutions for news production aren’t helping foster a more equitable and inclusive democracy. In the United States, commercial media share a sizable portion of the blame for the rise of Donald Trump — and, with him, Trump-style white nationalism.
What happened in the 20th century, when local print, radio and TV outlets were the best way for advertisers to target local audiences, was a historical fluke. Attempts to rebuild or insulate that old-media model in the 21st century are a fool’s errand. Future solutions must involve new hybrid private- and public-sector models, or direct public funding for journalism, so long as it includes guardrails to protect the editorial independence of news organizations on the receiving end.
Incentivizing these sorts of funding models is the right path away from a commercial-media system dominated by too few players. While Australia’s proposal is a sincere attempt to make Facebook and Google pay for the harm they’ve caused journalism, it’s not the final word. Nor should it be.