[The music business suffers from the same malaise as news, another kind of destructive value gap. The government could start fixing it by getting out of the antitrust consent decree business with ASCAP and BMI.]
The news business is suffering, but not because people don’t want news. They do—more than ever. The problem is that the money generated by news audiences flows mostly to Google and Facebook , not to the reporters and publishers who produce excellent journalism. [Sound familiar?]
The Duopoly now captures 83% of all digital ad revenue growth and 73% of U.S. digital advertising, according to a CNBC report. As a result, newspapers’ online audience growth does not produce revenue to match. According to data from Pew, newspaper advertising revenue fell from $22 billion in 2014 to $18 billion in 2016 even as web traffic for the top 50 U.S. newspapers increased 42%.
Local news is most at risk. As print circulation declines, community news publishers have the hardest time adapting to the ever-changing demands of Facebook and Google algorithms. We think of “fake news” as a national phenomenon, but in the absence of a workable news business model, wild rumors and conspiracy theories could become more influential at the local level, too….
Google and Facebook have become the primary and de facto regulators of the news business, and governments around the world are starting to recognize the danger. British Prime Minister Theresa May announced earlier this month that her government would review the economics of internet news consumption. Regulators in Germany, Israel and South Korea are investigating how Google’s business practices have disrupted the media market and harmed publishers and consumers. U.S. regulators, on the other hand, have rarely looked into Google or Facebook—and never at their influence in the news marketplace.
Some voices on the left and right are calling for Google and Facebook to be regulated as utilities. But there is an easier solution: exempt news publishers from certain aspects of antitrust regulation….
Rep. David Cicilline, top Democrat on the House Judiciary Antitrust Subcommittee, is expected to introduce a bill to do that next week. The Journalism Competition and Preservation Act of 2018 is a low-regulation, pro-market way to unleash the news industry’s negotiating power. If antitrust enforcers can’t protect society from the outsize influence of modern-day trusts, the least the government can do is get out of the way and let publishers protect themselves and their readers.