According to a working paper published in November by the Poynter Institute, Google and Meta could owe publishers in the United States billions of dollars. This finding would not be a surprise to any publisher who has worked in the industry since the two companies spun out their first websites. If your company does any kind of publishing on the Web, this is a must-read document.
Here is how the Executive Summary of the 46-page paper replete with footnotes, charts, and graphs get the presentation underway, “This paper estimates the payment that Facebook and Google Search platforms would owe to news publishers for the use of news content, if the Journalism Competition & Preservation Act (JCPA) comes into force. Existing deals made between these platforms and news publishers do not capture the full value generated by news content on the platforms. Using game theoretical insights into cooperative bargaining in cases where there is jointly-created value, we find a compelling case for a large payment from platforms to news publishers.”
“Our contributions are not only that we provide a dollar amount for what is owed – which we estimate at between US$11.9 billion and US$13.9 billion a year in the United States – but also that we detail our methodology to enable others to replicate our work or use our approach to calculate a ‘fair payment’ to publishers in other markets. We benchmark our estimates against recent agreements between news outlets and Google and Meta (previously known as Facebook), as well as with a database of licensing agreements made over recent decades for similar content-based products.”
- Using game theoretical insights into cooperative bargaining in cases where value is jointly created, we find a compelling case for a large payment from platforms to news publishers.
- We first estimate (using a conservative assumption), that Facebook owes US$1.9 billion to US publishers annually for use of their content on its platform.
- We estimate that US$10–12 billion is owed by Google to US news publishers annually.
- Using existing platform-publisher agreements around the world as a benchmark, we find that a fair revenue split would give news publishers 50% of news-related revenue earned by Google and Facebook.
- We document that Google and Facebook are making payments to publishers around the world that are vastly below our estimates of a “fair payment”.