How much is news worth?
This question is at the heart of the controversy over payment for journalistic news included in the flow of messages exchanged on digital social networks. The discussion involves the mainstream press, the biggest internet communication platforms and governments almost all over the world. The problem is that the controversy is centred on financial issues, leaving aside the fact that news is something very different from a packet of rice, a gallon of gasoline or a ton of steel.
As the main protagonists of the discussion are based on quantitative data presented without the necessary transparency, the margin for disagreements and cognitive dissonance is very high. The mainstream press and governments have little information about the relationship between news and advertising on social media. The digital networks, in turn, have this data, but intentionally omit or hide it because they know that the lack of transparency benefits them.
News is a specific type of information characterized by the fact that it is new to the audience for which it is intended (1). It has two characteristics that make it a very specific item:
1) News is an intangible good defined as ‘non-rival’ (in Anglo-Saxon economic jargon);
2) A good produced on the “giant’s shoulders”, another term coined by experts and researchers in the field of the political economy of information.
A ‘non-rival’ good does not disappear when consumed. Newspaper news does not disappear once read. The newspaper, radio or TV news may cease to exist after being sold or transmitted, but the news read, heard or viewed remains in the memory of the reader, listener or viewer. The opposite happens with goods such as an apple, gasoline or iron ore, which once consumed cease to exist as a tradable product.
‘On the shoulders of the giant’
Furthermore, news is both input and output. That is, it is always based on other news and in turn serves to feed new data, facts and events. This process, which is continuous and never-ending, is essential to the production of knowledge by individuals and communities, through the ‘shoulders of the giant” (2), a metaphor to indicate how news takes on new meanings when it is remixed or recombined between people.
Despite evidence to the contrary, several institutions attempted to put a price tag on the news. The most consistent of them all was the one released in October 2023 by the Battler Group, a North American organization specialized in researching complex topics. The Battler Group produced a two-year survey that guarantees that the conglomerates Meta (owner of Facebook and Instagram) and Alphabet (owner of Google and YouTube) should respectively pay US$ 1.9 billion and US$11 billion for press outlets in the United States as compensation for the reproduction of journalistic news on digital social networks.
The research used a methodology called Randomized Control Trial (RCT) (3) and applied by the Swiss company Fehr Advice & Partners AG, to estimate the value of advertising revenue from Facebook and Google, as well as establish an equal distribution of the amounts obtained between the networks and the press. Now in 2024, using the same methodology, the English academic researcher Jonathan Heawood (4), director of the Public Interest News Foundation, based in London, estimated that 1.9 billion pounds sterling (about US$ 2,4 billion) the amount that networks should pay annually to professionals and bodies of the British press for the online broadcasting of journalistic news.
Both Meta and Alphabet described the data presented by the Battler Group as unrealistic and refused to consider them in negotiations with journalistic companies. The two digital technology giants also found the numbers proposed by the governments of Australia and Canada to be exaggerated, but eventually, they ended up signing agreements with both countries to pay royalties for the online reproduction of news published by legacy media vehicles.
The News Media Bargaining Code agreed between the networks and the Australian government in 2021 provides for annual payments of US$140 million to be passed on to independent journalists and journalistic conglomerates. The biggest beneficiary of the Bargaining Code was billionaire Rupert Murdoch’s mega-conglomerate News Corporation, which kept almost 85% of the money paid by the networks. The digital platforms agreement with Canada, known as the Online News Act, establishes direct negotiations with journalistic companies, with the government being responsible for mediation in the event of an impasse.
News as a public good
There are several other countries discussing relations between social networks and the press, such as the United States, England, Brazil and the European Union. They all try to resolve the impasse based on numbers, which does not solve the problem. In both Australia and Canada, Facebook and Google are reducing the republication of news to a minimum, which tends to make the amounts paid to journalists and companies insignificant.
The British media digital magazine Press Gazette recently published a story about a huge reduction of 50% in Facebook referrals to general news sites during 2023. The data is based on reports released by Chartbeat and Similarweb, two monitoring companies that also stated that the reduction of Facebook referrals has dropped 58% since 2018.
The news ends up entering the networks through posts made by users citing journalistic sources, which makes it difficult to classify published material as an illegal copy. Self-employed professionals and journalistic companies have not yet realized that social networks are becoming a public space where news circulates driven by its sharing among people.
Within the network space, news takes on a notably public character. That is, it becomes a heritage of everyone who shares it. In this context, agreements based on news monetization may lose effectiveness in the short term, because negotiators do not take into account the special characteristics of digital news.
The central issue in the debate on social media regulation should not be the pricing of news as a financial basis for sharing revenue. The most important thing is to discuss how to socialize the commercial use of a public good that, by nature, belongs to all of us.
(1) News is defined here as a specific type of information characterized by its originality for its target audience. Information is a contextualized number, fact or event. The number 10 is data, 10 deaths are information, and 10 deaths in an accident is news. The news may lose its originality, becoming durable information.
(2) The metaphor ‘on the giant’s shoulders’ was first used in 1675 by physicist and mathematician Isaac Newton to express that his scientific discoveries were possible thanks to other researchers who preceded him. Newton’s original phrase was: “If I have seen further it is by standing on the shoulders of Giants”. (I was able to see further by climbing on the shoulders of Giants). More details in Benkler, Yochai. The Wealth of Networks, pages 36 and 37. Yale University Press, New Heaven, USA. 2006.
(3) A Random Controlled Test (RTC) used by Grupo Battler subjected social media users to three different configurations of a web page: with an advertisement next to a piece of news; news without advertising and the same page with advertising but no news.
(4) The value was mentioned by Jonathan Heawood during his participation in the panel The Value of News, held during the International Journalism Festival, in Perugia, Italy between April 17th and 21st.
