Why news outlets want to team up and take on Facebook and Google
People may be consuming more news than ever, but that isn't translating to increased revenue for media outlets.
Although some of the largest national newspapers reported a sharp jump in online subscriptions following the 2016 presidential race, a Pew study found that the industry as a whole saw advertising revenue plunge by nearly a third in the past decade.
Now, newspapers and other media organizations want Congress to grant them the right to team up and renegotiate how content is shared on Facebook and Google.
President and CEO of the News Media Alliance, David Chavern, joined "CBS This Morning" to discuss his recent Wall Street Journal op-ed in which he argues that Facebook and Google pose an "inexorable threat" to the news industry.
The News Media Alliance is a trade association representing about 2,000 digital and print outlets in the U.S. and Canada.
Chavern says the threat arises because when people consume news online, "the money isn't flowing to the folks hiring the reporters."
Instead, he points out, about 70 percent of digital advertising revenue goes to Facebook and Google, even though they don't shoulder the costs of news coverage.
"The two digital giants don't employ reporters: They don't dig through public records to uncover corruption, send correspondents into war zones, or attend last night's game to get the highlights. They expect an economically squeezed news industry to do that costly work for them," Chavern wrote in his op-ed.
On "CBS This Morning" he stressed that the set-up needs to change. "We need a system that allows the folks hiring the reporters to be able to produce the great content we need in this country."
Asked how the tech giants have responded, Chavern said, "I think they're trying to help publishers but it hasn't been very much, very fast."
Chavern argues that that the implications go far beyond the publishers themselves.
"News is not just content. News is what's tying together our democracy," he said. "If you get fake news, if you get garbage news, it impacts the whole of society."
He believes the solution is twofold.
"We need a better deal from Facebook and Google, among others. A better economic deal," Chavern said. Also important, he said, is brand awareness for news outlets on social media so that people can more easily distinguish one publisher from another.
"People going on Facebook often think that when they read it on Facebook that Facebook has produced the content," Chavern said. "Now, the crazy conspiracy theory and the news piece is fed to you just right the same way."
What the News Media Alliance wants from Congress is the ability to work together without violating laws intended to prevent monopolies.
"Under the antitrust laws the newspapers currently can't get together to negotiate with these giants and what we're just asking is the ability to negotiate as a group. That's all," Chavern said.
Asked why anyone would pay for news now after getting it free for so long, Chavern replied: "If you want a free news business, it's 'Pope endorses Trump.' Right? It's fake news world."
Facebook and Google issued statements saying that they want to work with news publishers on these issues.
"We're committed to helping quality journalism thrive on Facebook. We're making progress through our work with news publishers and have more work to do," said Campbell Brown, Facebook's head of news partnerships.
Google said: "We want to help news publishers succeed as they transition to digital. In recent years we've built numerous specialized products and technologies, developed specifically to help distribute, fund, and support newspapers. This is a priority and we remain deeply committed to helping publishers with both their challenges, and their opportunities."
