News content created by UK publishers generates around £1billion in UK revenue for Google and Facebook each year, a leading academic has found.
Professor Matthew Elliott of the University of Cambridge said the two US tech giants relied on journalism to keep users engaged, which was crucial to their business models.
Yet despite helping the platforms earn at least £16billion each year in the UK, the media organizations that created the content received “little, if any” compensation.
Any profits generated by publishers’ investment in creating top-notch journalism should accrue to them rather than to Google and Facebook, Professor Elliott said.
“The fact that high-quality news content generates wider benefits for society makes this problem acute,” he added.
According to a new study, news content is very important for digital platforms because it keeps users engaged and provides valuable data for online advertising
Paul Zwillenberg, chief executive of the Daily Mail and the General Trust, said yesterday that the Daily Mail had invested heavily in journalism and ‘deserved to be fairly rewarded’.
Speaking at the Deloitte and Enders Media and Telecoms 2022 conference, he criticized the ‘unfair’ deal, telling the audience: ‘The value of journalism in the UK – for newspapers, regional and national, magazines and broadcasters – is around £1bn.’
Not only does payment for content need to be fair, he said, but it’s also “important that the rules of engagement are clear.”
‘What do I mean by that? I mean fair, reasonable and non-discriminatory algorithms. Free from prejudice and self-preference.
The News Media Association, which represents national and regional newspapers in the UK, published the study.
This has led to renewed calls for the Digital Markets Unit (DMU) to be urgently given the powers it needs to level the playing field between news publishers and online giants.
News content is very important for digital platforms as it keeps users engaged and provides valuable data for online advertising, according to the study.
Titled The Value of News to Digital Platforms in the UK, it revealed that around two-thirds of Google search results in the UK displayed links to news articles.
This can appear via direct search queries or those that appear indirectly but capture the user’s attention and help give a better answer.
News content also benefits Facebook to keep its users engaged, which is essential for the social media giant’s business.
Its algorithms were developed to maximize user engagement, allowing it to sell more ads and collect more user data with which to target those ads.
Google earned £10.8bn and Facebook earned £5.3bn in the UK in 2021, according to estimates based on company reports.
News content is very important for digital platforms as it keeps users engaged and provides valuable data for online advertising, according to the study. Titled The Value of News to Digital Platforms in the UK, it revealed that around two-thirds of Google search results in the UK displayed links to news articles.
But Prof Elliott said: “They share little, if any, of that revenue with the publishers whose content they rely on.
Considering how much revenue Google and Facebook could lose if news content were to be withheld, the value of news to the platforms is estimated to be around £1 billion a year.
“If the public is to continue to be served with high-quality information, the benefits of the investment in journalism made by news publishers should primarily accrue to them, not to Google and Facebook.”
The Digital Markets, Competition and Consumer Affairs Bill was announced earlier this week in the Queen’s Speech.
This will allow the DMU to compel tech giants to comply with codes of conduct – or face fines of up to 10% of annual turnover.
Mr Zwillenberg said: ‘It is now firmly on the agenda and we are now at a point where we can open a new chapter and really discuss what a fair and level playing field is.’
Meta said Facebook’s new feed in 2021 sent more than 180 billion clicks to news publishers at no cost to them, with additional traffic worth an estimated £7.4 billion.
A spokesperson also highlighted the investments he has made in journalism, including £12.5million in the Community News Project, a partnership with the NCTJ to help local newsrooms and improve diversity.
He said last year the company also launched Facebook News, a surface dedicated to national and local news which paid tens of millions of pounds to hundreds of news sites to be part of its service.