Exchanging Links for Cash Is No Way to Save Journalism

Photo by DALL-E

Originally published by Tech Policy Press

Last Thursday, the Senate Judiciary Committee voted to advance the controversial Journalism Competition and Preservation Act (JCPA). Identical legislation, which moved through this same committee last year, failed to advance to the Senate floor or receive any consideration in the House due in part to widespread opposition from digital rights advocates and small publishers.

Its primary sponsor, Sen. Amy Klobuchar (D-MN), sees the JCPA as a way, in her words, “to make sure that news organizations are able to negotiate on a level playing field” for compensation from tech companies like Google and Facebook that feature links to news sites.

Bargaining code legislation like the JCPA is being adopted worldwide. These laws are built on the premise that only big tech platforms benefit from featuring these links. The JCPA was drafted to balance what Sen. Klobuchar and others see as a disparity in this exchange. The reality, though, is that the benefits of linking are mutual — a tradeoff that the JCPA explicitly forbids from being considered when outlets negotiate for payment.

Lobbyists for the large news media firms that will gain the most from this legislation claim that their news outlets are “being forced to give content and revenue to Facebook and Google with inadequate return.” But the data indicate that these outlets willingly participate in the exchange. The reason is simple: increased site traffic from links on tech platforms equals increased revenues for ads sold on news sites.

But this trade of links for traffic has been undergoing upheaval on Facebook. According to industry analysts, the social media platform ranks as the largest single source of social referral traffic for publishers — generating around seven times more traffic than Twitter, its closest competitor.  But in May these outlets measured a precipitous drop in traffic from Facebook — down 50 percent by comparison to May 2022, according to data collected from more than 2,000 publishers.

It’s a decline that has many reeling. Earlier this year, BuzzFeed News shut down operations after its owners realized that it’s impossible to sustain a news business that’s overly dependent on traffic from social media shares. In the case of Facebook, BuzzFeed was left at the whim of any tweaks the platform made to its promotion algorithms.

EchoBox, the analysts that conducted the publisher survey, argues that the most recent drop in traffic “could be the result of a deliberate deprioritization of news content on Facebook,” speculating that Facebook’s algorithmic shift could be the platform’s reaction to the introduction of bargaining code rules in Australia and (soon) Canada, and the consideration of similar measures from lawmakers in Brazil, South Africa, the United Kingdom, the United States and other countries. A state-level bill modeled on the JCPA is also making its way through California’s legislature.

Having its cake and eating it too
Like it or not, Facebook, as a private enterprise, is entitled to change its algorithms to boost its bottom line. By adjusting its algorithms to minimize the reach of news links, the social network is simply pre-gaming any potential payment negotiations it might be forced to have. The platform’s logic is straightforward and goes something like this: the fewer views Facebook sends to a given news site, the less it’s obligated to pay that site. 

While we at Free Press Action are no fans of giant tech platforms, we believe that bills like the JCPA are built on a shaky understanding of the economics of online media and news production.

The JCPA prohibits those who engage in payment negotiations from considering the value that news publishers receive from being present on platforms. This prohibition all but mandates that these outlets bargain with social networks and search engines in a way that’s divorced from any real understanding of the interactive marketplace.

But publishers still want to have it both ways: to get paid for having their links feature on Facebook and to get paid as a result of the traffic such links drive to their sites. JCPA proponents claim that Facebook is having its cake and eating it too. But when the platform decides to stop pushing traffic to news sites in its algorithm, these same lobbyists cry foul: ‘But we need Facebook to boost our traffic and ad sales!’

Loading the news cycle with clickbait

Writing legislation based on social media sharing metrics is a bad idea. For example, the California version of this bill calls for negotiations to be based on the number of links presented by a platform.  Though less explicit, other bargaining code bills assign value to the volume of impressions (or views) a given link generates, and not to the quality of the news item itself. As such, news publishers have a built-in incentive to produce low-value, high-engagement content — also known as clickbait — over the kinds of news and information people need to participate fully in our democracy.

The media marketplace is simply responding to a considerable public taste for junk news. This is a phenomenon that’s true not only online but in traditional media. It’s a quirk of human nature that has a predecessor in the popularity of tabloid journalism of the 20th century and yellow journalism before that.

In short, a bargaining code model built on such clickable metrics loads the news cycle with stories that scream the loudest at the expense of accuracy and depth. Less measurable outcomes, like whether an article inspires a person to get involved in their community or speak out against an injustice, aren’t part of the JCPA’s calculus for “saving journalism.”

And that’s the problem with bargaining code legislation. It isn’t designed to address the problem at the root of the journalism crisis: a massive decline in the production of local news and civic information, and in the sort of reporting that holds powerful people accountable.

Better ways to support a public good
Instead of forcing platforms to cut one-to-one deals with publishers, we should create an independent fund to support public-interest journalism — and especially the local, independent journalism and civic information that are in short supply across the country.

As a better alternative, Free Press has proposed an ad tax that would be levied on online advertising revenues. A one-percent tax would generate around $2 billion annually — which would fund a public-interest media endowment that would place a premium on funding civic engagement and accountability journalism over clickbait and disinformation.

Unlike excise taxes on products like cigarettes and gasoline, a tax on advertising would be levied not against individual consumers but against enterprises like Google and Meta that profit from ad sales, but don’t use a significant percentage of these revenues to support news production.

Since journalism is a public good, it needs public support. It makes economic sense to tax advertising instead of forcing warped and often opaque negotiations between individual platforms and news outlets. The ad tax route would have a minimal impact on consumers while ensuring that monies fund innovative journalism efforts in communities that have been hardest hit by the lack of local news and information.

As such, an ad tax is a far more efficient way to subsidize local news. Unlike the JCPA, it wouldn’t rely on a convoluted bargaining code that’s built on a false understanding of the news business. Instead, this approach recognizes the actual economics of news, treats journalism as a public good and creates a structure through which funds actually support the production and distribution of news and information that are needed most.

Trump’s Lies Spark Right-Wing Cries to Defund PBS

PBS must have really crossed the line this time.

During its broadcast of Trump’s post-indictment rally on June 13, PBS NewsHour added factual context to the disgraced former president’s claims that he had won the 2020 election, that federal prosecutor Jack Smith was a “deranged lunatic” and a “thug,” and that the so-called deep state was “destroying our country” and “coming after you next.”

NewsHour set the record straight via text chyrons at the bottom of the screen. For example, when Trump falsely claimed that he had won the 2020 election, NewsHour layered on a chyron stating factually: “There is no evidence of widespread voter fraud during the 2020 election.”

How dare PBS.

But what really set off Trump loyalists was the NewsHour chyron that appeared near the end of the former president’s speech. As he pledged to use all his might to fight the deep state, NewsHour added a chyron stating: "Experts warn that inflammatory rhetoric from elected officials or people in power can prompt individual actors to commit acts of violence."

This triggered far-right influencers like Charlie Kirk (2.3 million Twitter followers) and Jack Posobiec (2.1 million Twitter followers), who took to social media to call for a total defunding of PBS.

By the following morning, “Defund PBS” was trending on Twitter and across other social-media platforms. The public-media network’s crime? Telling the truth.

Starving public media
But in their rush to discredit PBS, Kirk, Posobiec and their influencer ilk omitted some important details about U.S. public media. They forgot to mention that overwhelming majorities of people in the United States (81 percent) believe federal funding for PBS is taxpayer “money well spent,” according to a recent poll.

Americans also say they trust PBS twice as much as commercial broadcast TV, three times more than newspapers and five times more than cable channels.

Had these Trump supporters actually bothered to scrutinize the idea that the U.S. is overfunding public-media outlets, they would have found the opposite: U.S. government spending per capita on public media falls far below amounts offered by other advanced democracies. At $465 million, the U.S. FY 2022 allocation boils down to little more than $1.40 per person in the country.

By comparison, the United Kingdom spends $81 per person and France more than $75 per capita to support public media. Head further north and the numbers head north as well: Denmark spends more than $93 a person, while Finland spends more than $100 and Norway more than $110. And it isn’t just a European trend: Japan (+$53/capita) and South Korea (+$14) show their appreciation for publicly funded media at levels that put the U.S. outlay to shame.

“Despite being the wealthiest nation on the planet, the United States impoverishes its public media infrastructures,” writes Professor Victor Pickard, co-director of the Media, Inequality and Change Center at the University of Pennsylvania (and Free Press’ board chair).

And by impoverishing public media, the U.S. is also impoverishing democratic society.

A recent comparative study by Pickard and Professor Timothy Neff found that more robust public-media funding deepened public knowledge about civic affairs and provided more diverse news coverage in a given country. After analyzing funding levels in 33 nations in Africa, Asia, Europe, Latin America, the Middle East, North America and South America, they concluded that “high levels of secure funding for public media systems and strong structural protections for the political and economic independence of those systems are consistently and positively correlated with healthy democracies.”

What ‘influencers’ don’t want you to know
And perhaps that’s what right-wing provocateurs don’t want you to know: Larger investments in public media help build the types of societies that are more resilient to authoritarian demagogues and the rampant spread of hate and disinformation.

In other words, what we really need to do is increase federal funding because such public support benefits democratic society as a whole.

Free Press has made increasing funds for public-interest media a central part of its mission since our founding more than 20 years ago. Not only have we fought efforts to defund NPR and PBS, we’ve also helped implement new ways to support local, independent and noncommercial media. This includes funding public structures to support the production of local and diverse news and information, and the sort of investigative reporting that holds abusive leaders accountable.

Our work in New Jersey and California has resulted in state-level solutions that prioritize outlets doing this important work. We are also calling for a tax on online advertising that would support an endowment for local-accountability journalism that would fund news-reporting efforts in communities that need them the most.

So the next time a cabal of far-right influencers shouts “Defund PBS” across social media, consider that these views aren’t broadly shared — and that such attacks are to be expected from followers of a disgraced and twice-indicted former president who believes a free press is the “enemy of the American people.”

When PBS added chyrons during Trump’s inflammatory speech, it was providing viewers with the fact that such rhetoric can lead to bloodshed. The Jan. 6 insurrection is just one prominent example of how the toxic lies of powerful people can fuel real-world violence. But it wasn’t the first example, and it won’t be the last.

What Kirk, Posobiec and their cronies are really afraid of is a public-media system that acts as a bulwark against such extremism, one that holds powerful people — like Trump — accountable for the lies they tell and the political violence that they knowingly incite.

How Musk’s Love of Hate and Disinformation Has Tanked Twitter’s Business

Twitter’s latest round of bad news recalls a meeting Free Press and other racial-justice and digital-rights groups held in early November, at the beginning of Elon Musk’s disastrous run as the platform’s CEO.

We sat down with the new-media boss to gauge his commitment to community standards, election integrity and content moderation. We urged Musk to retain and actually enforce existing content-moderation rules if he wanted advertisers to continue to spend money on Twitter — and not see their content appear alongside lies, bigotry and other extremist content.

He initially seemed to agree with us, but quickly reversed course, laying off many of those on the company’s trust and safety team in charge of this important work. Musk then granted a “general amnesty” to legions of neo-Nazis, conspiracy theorists and anti-vaccine trolls, reinstating thousands of previously banned accounts. He also gutted long-standing content-moderation rules and stopped enforcing Twitter’s ban on COVID-19 misinformation.

His purchase saddled the company with $13 billion in loans, and his refusal to seriously consider content moderation and brand safety ensured that Musk wouldn’t have the revenue he needed to pay off these debts.

Those who loaned Musk the money were banking on the “small chance that Elon is some sort of genius and can turn around an operational and financial situation that looks increasingly doomed,” financial writer William Cohan skeptically wrote at the time.

Musk’s erratic behavior since then has dashed those hopes.

Twitter’s toxic turn caused well over half of the company’s advertisers to leave by January of this year. And few seem intent on returning. A mistake-riddled attempt to recoup this lost revenue by selling Twitter Blue subscriptions hasn’t even won over one percent of the platform’s users, Bloomberg noted on Tuesday, adding that the company was now worth only a fraction of the $44-billion sum Musk paid for it.

In other words: Musk was wrong. We were right.

Amplifying hate, alienating advertisers
New research from the Center for Countering Digital Hate (CCDH) underscores this point: Allowing Twitter to become a hate-posting hellscape has imperiled any of the company’s remaining business prospects.

According to a CCDH sampling, Twitter has failed to remove 99 percent of hate speech posted by Twitter Blue users. Instead Musk has enabled algorithms that will amplify these and other paid accounts. To make matters worse, Musk’s own politics have become increasingly reactionary and strident, so much so that he has started to sound like many of the most vitriolic hate trolls featured in CCDH’s research.

Charlie Warzel of The Atlantic detailed Musk’s descent into the muck:

“[His] own rhetoric has moved from trolling to dog whistling to outright conspiracy peddling, and it has intensified in recent months, culminating in his recent anti-Semitic remarks about George Soros. A stroll through Musk’s replies on the site reveals the extent to which one of the richest men in the world spends his time replying to far-right influencers and nodding in approval to their racist memes.”

Musk rushed online to defend racist comic-strip author Scott Adams after he characterized Blacks in the United States as a “hate group.” He’s boosted “anti-woke” influencers and adopted much of their anti-trans and homophobic rhetoric, and recently amplified Black-on-white crime data in a way that is misleading and taken out of context.

When right-wing site Parler shut down in April, its bosses noted that their plans to create a Twitter clone for right-wing users were misguided, and the result was not viable as a business.

“If Musk weren’t too preoccupied [with] lapping up approval from trolls, reactionaries, and Dogecoin enthusiasts — a few of the constituencies left on his site that still seem to adore him — the Parler statement [w]ould worry him,” Warzel wrote.

The appointment of a new CEO with marketing expertise will likely do little to save Twitter. As my colleague Jessica J. González told CNN: “Musk is setting future CEO Linda Yaccarino up to fail — as long as he continues to make the platform toxic, it will be impossible to lure back advertisers and users.”

A CEO reshuffle won’t be enough — unless the new boss has the authority to reverse Musk’s many policy decisions and reinvest in content moderation and enforcement. So far, Musk hasn’t given any indication that he’ll allow someone else to fix his long string of screw-ups.

“Musk is ignoring a fundamental truth: to grow healthy and profitable online communities, you need effective content moderation,” I wrote in February. “If Twitter becomes insolvent — which seems more likely by the day — it’s because Musk lacks this basic business sense about social media.”

His decision to ignore this advice offered during his first week on the job set Twitter on a path to ruin that today seems inevitable.