Google is willing to pay for content, but are we ready?

There has been a lot of global attention drawn to the Australian government’s talks with Facebook and Google. In India the topic received special consideration when the matter was discussed between Prime Minister Narendra Modi and his Australian counterpart, Scott Morrison. Reports suggest that governments around the world may consider borrowing a page from the Australian playbook.

The talks and their ultimate outcome indicate just how powerful the big technology companies are. The state had to intervene in what should essentially have been a matter between a buyer (here Google and Facebook) and a seller (the Australian media). In few industries around the world does the state have to intervene between private sector parties to advocate an economic idea that is timeless—you need to put a value on something that you are getting from another party.

More pertinent is the fact that unlike Google, Facebook initially chose not to come to a deal with the Australian media and unilaterally yanked its news-feed. (Recent reports indicate that Facebook has entered into some kind of deal, but the nature of that is unclear.) Tells you a bit about the balance of power.

Given that Google has decided to pay Rupert Murdoch and a few others for using their content has raised hopes that there is finally light at the end of a long dark tunnel that media around the world finds itself in. It is an all-consuming darkness where tech giants merrily gobble upwards of 70% of digital advertising revenue, leaving only scraps for media companies that create the intellectual property (IP). Worse, surveys have shown that readers forget the identity of the original creator. To a question, “where have you read it,” the answer often is, “on Facebook or Google”. Not only are content creators not making any money, even their identities are stolen, the unkindest cut if there was one.

So, where does all this leave Indian publishers?

While Google’s willingness to share a part of its riches may indeed provide some hope, it will be foolhardy to assume that the tide has turned for media companies. They need to lobby the government to begin discussions with Google and Facebook to broker a deal for them. Hopefully, the talking points are already with Modi after his chit-chat with Morrison. The Indian government’s willingness to play hardball with Twitter (although for very different reasons) should at least convince the tech giants that they mean business.

Of course, the industry should ensure that if and when any deal is reached, it should benefit all or at least most players and not just the giants. Given how Indian media is configured with players across states and in different languages, a few benefitting at the expense of most would be a shame.

But more fundamentally, Indian publishers need to truly cast their eyes over the kind of content they are putting out on the web. That needs to undergo a sea change. Given the mad scramble for whatever advertising cents are left behind by the tech giants, scale, measured by unique visitors and page views, has become an end in itself. As a result, digital pipelines have an over-dependence on things like entertainment, random events, pictures of stars at parties and so on. Much of the content is me-too.

This needs to change.

Even before the news Down Under grabbed the world’s attention, Google had announced a product called Google News Showcase. For this, Google has set aside $1 billion to pay publishers for content it buys. (Wall Street Journal reports that the deal reached in Australia includes payment for articles taken from Murdoch properties and published on Google News Showcase.)

In a blog published on October 1, 2020, Sundar Pichai laid out his vision for News Showcase: “This financial commitment—our biggest to date—will pay publishers to create and curate high-quality content for a different kind of online news experience. Google News Showcase is a new product that will benefit both publishers and readers: It features the editorial curation of award-winning newsrooms to give readers more insight on the stories that matter, and in the process, helps publishers develop deeper relationships with their audiences.”

Some of the words used are instructive. Don’t miss ‘high-quality content’, ‘award-winning newsrooms’ or for that matter, ‘more insight on the stories that matter’. And ask yourself the question: how much of what you regularly read from Indian news sites truly measure up to those standards.

A billion dollars is really chump change for one of the world’s most valued companies. Because of a range of factors from government policy to public opinion, Google’s outlay for projects like News Showcase will increase. And as the stakes rise, so will Google’s ask. It stands to reason that if Google is paying for something, it will want something good and unique.

Then, data of stories on News Showcase (or any other such product) will naturally be with Google. It may even use an algorithm that values quality and insight—and logically, any payment to individual publishers will be based on that metric. Already, to rank high on Google search organically (not paying to buy a slot), quality is a determinant amongst other things. And currently, Google isn’t paying. Now imagine how the algorithm will work when its master has to pay for what it takes.

An outcome like this works beautifully for Google: not only will it be paying to support journalism but also helping improve the very nature of it. From being seen as journalism’s arch nemesis, Google will now position itself as its greatest ally. (Incidentally, for the past few months, Google has already been in talks with several publishers in India regarding News Showcase.)

A movement towards better quality journalism will also have another benefit: it will help Indian publishers to seize their own destiny and ideally start getting consumers to directly pay for their content. While the likes of Wall Street Journal and the Financial Times have signaled the Australian outcome as a victory for publishers, what they have omitted in their narrative is that given their ballooning digital subscriber base, their dependence on ad dollars which Google controls is reducing. While Google still helps the content being discovered, given the digital subscription momentum these brands have built, it arguably matters less.

Here, we are still almost entirely dependent on digital advertising: and hence the temptation to see Google’s concession in Australia as a true game changer maybe high. But seen merely as that without anticipating what may follow will prove to be a false dawn.

Views are personal. The author is Chief Executive, Digital Business, at RPSG Group.