Why Google Could Pay Billions to US Publishers in 2024

An agreement struck earlier this month between Google and the Canadian government on behalf of the news industry has added further momentum to similar legislative efforts in the U.S., according to News/Media Alliance president and CEO Danielle Coffey. In December, Google agreed to pay the Canadian news media C$100 million ($75 million) annually, fixed to inflation, to continue sharing links to Canadian news outlet pages. Using the arrangement as precedent, the U.S. news media could expect to secure a similar compensation model from the search engine, potentially as soon as next year, Coffey said on the Local Market Trends podcast. In the U.S., however, the total dispensation could amount to billions of dollars. “Definitely billions,” Coffey said on the podcast. “Even with the lowest numbers that we’ve seen around the world, when translated to the U.S. economy and market share, it’s definitely a B. And we believe that B should be plural.” A potential payout of that magnitude would represent an enormous development for the U.S. news media, which in 2023 suffered one of its worst commercial years in decades. Fears of a recession, persistent inflation and an ongoing shift in marketing budgets led publishers across the industry to endure multiple waves of layoffs and closures. The domestic news industry has proposed similar compensation models in the past, arguing that platforms like Google and Meta should pay to distribute publishers’ content in the same way that cable providers pay retransmission fees to carry broadcast companies’ content. Exclusive: How Affiliate Platform Howl Fell Months—and Millions—Behind on Publisher Payments While the television industry is larger than the news media, in 2022 it generated $14.5 billion from retransmission and carriage fees alone, according to S&P Global Market Intelligence. "We encourage policymakers to consider approaches that incentivize free market collaboration and the development of mutually beneficial commercial models that can provide enduring support for the ecosystem, while also respecting the open web and the free expression it enables," a representative for Google said in a statement. Parallels in California's compensation law A bill proposed in California offers the closest parallel to the news media compensation laws passed in other countries, according to Coffey. The California Journalism Preservation Act has proffered similar terms, mandating that technology platforms with more than 50 million monthly users and a market cap of more than $550 billion pay news publishers when surfacing their content. The bill, which was originally scheduled for discussion this year, has been pushed to the 2024 legislative session, due in part to the lobbying efforts of Google. Between January and September, the internet giant spent $1.5 million on advertising in California designed to discourage support of the bill, according to the Los Angeles Times. The figure represents a substantial increase from the $257,000 per year it spent, on average, on such efforts between 2005 and 2022. A representative for Google acknowledged the uptick in spend, attributing it to an increase in interest in the issue. The CJPA would require the tech platforms every quarter to track and record the total number of times they link to, display or present reporting from a publisher, according to the bill. Based on that number, the platform would allocate a percentage of its advertising revenue to the publisher monthly. The specific amount of money paid to each publisher would be determined through an arbitration process. One key provision would require publishers to spend 70% of that allotment on journalists. In Canada, funds are apportioned by the number of full-time journalists a publisher employs. “This is transformative,” Coffey said. “This is not going to be a small fee.” Precedents in Canada and Australia The Google compromise in Canada came after the government passed the Online News Act in June, which requires digital platforms with 20 million monthly users and annual revenues of $1 billion to compensate news outlets for sharing links to their pages. The ONA took effect on Dec. 19. In Canada, only Google and Meta met those criteria. Rather than comply or strike a deal, Meta has removed news content from its platforms in Canada. The company can be fined C$10 million for a first offense and C$50 million for further infractions. The development follows the 2021 adoption of similar legislation in Australia, called the News Media Bargaining Code. Since the Code took effect, Facebook and Google have paid A$200 million to news publishers. The influx of cash has transformed the job market in the country, journalism professor Monica Attard told the Columbia Journalism Review. Attard, who teaches in Sydney, said she has been unable to persuade students to take internships because they can so easily land full-time jobs. “I swear to God, I have not seen it like this in 20 years," Attard said.

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'This Is Transformative': Why Google Could Pay Billions to US Publishers in 2024

The search engine struck a deal this month to pay Canadian news media C$100 million

Mark Stenberg

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Mark Stenberg