In the past two years, both Australia and Canada have passed laws aimed at forcing Google and Meta to pay news publishers for excerpts of their content that appear on the tech giants’ platforms. (Similar legislation has been proposed, but not enacted, in the US). The outcomes of the Canadian and Australian laws have, so far, been dramatically different: Google and Meta responded to the Australian legislation by signing content deals worth an estimated hundred and fifty million dollars with news outlets, but in Canada, they have pulled news content from their platforms completely (or promised to). If a user in Canada tries to post a link to a news story on Facebook, an error message pops up telling them that their post can’t be published. (Meta briefly blocked news from its platforms in Australia, before relenting.)
At the heart of such laws lies a question: what is the value of news content to the major platforms? And what they might owe the makers of that content as a result? Is it worth the hundreds of millions of dollars that Google and Meta have reportedly paid Australian publishers under that country’s law forcing them to cough up? Is it worth the three hundred million dollars that Google says it spent through its Google News Initiative, a program that has funded journalism startups and grants? What about the six hundred million dollars that Meta says it has spent doing the same since 2018? A study released two weeks ago by researchers at Columbia University argues that these sums are just a fraction of what Google and Meta should actually be paying for news. The researchers—led by Anya Schiffrin, director of the Technology, Media, and Communications specialization at Columbia’s School of International and Public Affairs—put the figure around ten billion dollars per year for Google, and two billion for Meta. So twelve billion dollars, in total.
Putting a dollar amount on the value that news content brings to Google is tricky. The company doesn’t run ads on Google News pages, and therefore generates no direct ad revenue from them. Media companies say that this ignores the broader value for Google of being able to link out to news content, which, they argue, draws users to and keeps them on Google’s platform, where they can conduct non-news searches and interact with the company’s in-house products. Different studies have tried different ways of putting a number on this value. In 2019, the News Media Alliance, a lobby group for publishers, released a study claiming that Google makes nearly five billion dollars from news—though at the time, a number of critics noted that this number seemed to have been based on an offhand comment that Marissa Mayer, a former executive at Google, made more than a decade earlier.
Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer
Schiffrin told me that the Columbia study is based on a rigorous economic analysis. In Google’s case, the researchers used a study of the Swiss media market by FehrAdvice & Partners, a firm specializing in behavioral economics. Fehr showed about fifteen hundred survey respondents two versions of Google—one with news content, one without—and asked them which they preferred. Since 70 percent of respondents said they preferred the version with news, Fehr concluded that news was worth an equivalent percentage of Google’s ad revenue. Using the same revenue split that Google uses with partners in its AdSense service, which runs ads on other websites, the Fehr study concluded that 40 percent of that figure ought to be shared with publishers. The Columbia study uses similar logic to conclude that Google makes roughly twenty-one billion dollars in revenue from news-related searches, and that it should pay about half that amount to news publishers.
When it comes to Facebook, the Columbia study estimated the amount of time that users said they spent reading news on the site, based in part on data from a different study that analyzed the time people spend on Facebook in terms of page “impressions” (or views) rather than clicks. Schiffrin and her co-authors concluded that the average Facebook user spends a little over 13 percent of their time on the platform consuming news content. They then estimated that Meta gets 59 percent of its revenue from Facebook and concluded that news content helps generate close to four billion dollars of the company’s US advertising revenues. Based on a survey of other content-licensing arrangements from within the media industry, the study argues that Facebook should pay half of that to publishers.
Google and Meta, unsurprisingly, do not agree. The companies argue that they already pay for news content by steering billions of clicks to news websites—twenty-four-billion visits per month, according to a Google spokesperson—where publishers have the opportunity to convert them into subscribers or generate ad revenue from their readership. Schiffrin told me that her team did not calculate the value of such traffic; their study states that it would be “difficult to estimate reliably.” Regardless, Schiffrin argued that whatever this value is for news publishers, it’s “really small, compared to what [the platforms] are getting.” Schiffrin said that she likes to compare news companies to a bakery that sells muffins: when Google and Meta take their headlines and excerpts, she says, it’s like “taking the tops off all the muffins, leaving the bakery with the bottoms.”
Google and Meta, it should be noted, are not the only ones who disagree with the logic of Schiffrin and her team. Andrew Coyne, a columnist with the Globe and Mail in Canada, argued in 2021 that rather than platforms paying them for their content, news companies should probably be paying Google and Meta for the traffic and engagement they generate. In a discussion that I hosted in 2020 about the platforms paying for news, Ben Thompson, who writes a newsletter called Stratechery, argued that it’s clear that media companies make money from Google and Facebook. “When their content is linked to by Google or Facebook, the media entities make more money,” Thompson said, “and when it is not, they do not.”
There is also a significant gap between the Columbia study’s conclusions as to how much news users of the platforms see in their searches or news feeds and the platforms’ own estimates of the same. The Columbia study states that news-related content comprises more than 13 percent of an average user’s Facebook feed, but Meta has repeatedly claimed that the figure is less than 3 percent. Similarly, the Columbia study bases its conclusions on the assessment that more than 35 percent of Google searches return news content, but a company spokesperson told Semafor that the actual figure is less than 2 percent, a number that Google has put forward a number of times in the past. When I asked about the discrepancy, Schiffrin replied, “Well they would say that, wouldn’t they?”
Given that Meta, at least, has already removed news from its platform in Canada, it probably knows exactly how much revenue (if any) it has given up as a result—but it isn’t sharing those numbers. The authors of the Columbia study argue that news is a “must have” asset for both platforms, in much the same way that the cable industry has a “must carry” requirement for local TV stations. But Meta’s and Google’s actions in Canada seem to show that they do not see news as “must have” in any real sense of that term. On the contrary, the ban certainly seems to be having an impact on media outlets in Canada. The Reuters Institute for the Study of Journalism reported recently that some small publishers that rely on traffic from Facebook have lost between 20 percent and 30 percent of their audiences.
Critics of the Australian and Canadian news-licensing laws argue that there are a number of problems with taking such an approach to helping publishers. Many of them, including the Electronic Frontier Foundation and Tim Berners-Lee, the inventor of the world wide web, argue that charging platforms for linking to news content creates the principle of a “link tax,” which threatens the open nature of the internet—and why should news companies be the only content producers who get paid in this way? Others argue that if governments or society as a whole believe that news is a valuable commodity, then they should find other ways of paying for it—for instance, by taxing digital advertising, a market that Google and Meta dominate—rather than resorting to a Rube Goldberg machine of copyright-infringement allegations and compensatory private payments.
As for the argument that taking a headline and a short amount of text should be permissible under fair-use provisions in copyright law, Schiffrin said that both Google and Meta “take all this content and just call it fair use because they don’t want to pay for it.” Google, she added, “says they’re not making money from news. But then why are they throwing lobbyists at this? Obviously they’re making tons of money.” Schiffrin argues that while Canadian- and Australian-style news-licensing payments might not be the best solution to the media’s revenue problems, they’re better than nothing. “It’s an emergency,” she said. “News outlets are going out of business, and there’s momentum for these laws.” Even if a similar law does eventually pass in the US, however, it seems extremely unlikely that Google and Meta will start paying news publishers twelve billion dollars a year for their content.