Google’s Hollowing Out of Media and Corruption in the IT Media Space Now Controlled by Vendors
Executive Summary
- IT media is now nearly entirely funded by industry sources.
- What does this mean for the interests of readers and reporting accuracy?
Introduction
The history of media globally is quite established on this topic. The media output will reflect the interests of its income sources. In the era when cancer was still not broadly known to be caused by smoking, it was the publications that did not take tobacco advertising that reported the emerging research about the link. We found the following quote interesting.
“I do not believe that IT media is so corrupt you seem to think. I think it is more a matter of having very little resources, which makes them dependent on “news” that are provided by PR firms (which in turn are paid by IT vendors). As long as people expect journalism to be free they get journalism that someone else has paid for. If we want unbiased journalism we as readers have to pay for it. “
This quotation used the term corruption — which is interesting. Because any media entity can now make the argument that they can only stay in business by reflecting the interests of their funders — which is industry sources, one cannot find a significant IT media source that is not almost entirely funded by industry. IDG publications, TechTarget, the model is the same at each of them. The application rating entities like G2Crowd and GetApps work the same way. They exist only because they can provide lead gen to vendors.
What Google Did to Media
First, the Internet, then Google wiped out the subscription income of media entities. This caused them to go to industry for virtually 100% of their funding. This is explained in the following quotations.
Google’s Little Helper in Hollowing Out Media — Craigs List
Next came the dot-coms. Craigslist went online in the Bay Area in 1996 and spread across the continent like a weed, choking off local newspapers’ most reliable source of revenue: classified ads. The T&G tried to hold on to its classified-advertising section by wading into the shallow waters of the Internet, at telegram.com, where it was called, acronymically, and not a little desperately, “tango!” Then began yet another round of corporate buyouts, deeply leveraged deals conducted by executives answerable to stockholders seeking higher dividends, not better papers. – The New Yorker
The Rise of BuzzFeed
BuzzFeed surpassed the Times Web site in reader traffic in 2013. BuzzFeed News is subsidized by BuzzFeed, which, like many Web sites—including, at this point, those of most major news organizations—makes money by way of “native advertising,” ads that look like articles. In some publications, these fake stories are easy to spot; in others, they’re not. At BuzzFeed, they’re in the same font as every other story. BuzzFeed’s native-advertising bounty meant that BuzzFeed News had money to pay reporters and editors, and it began producing some very good and very serious reporting, real news having become something of a luxury good. – The New Yorker
Getting Advertising and Paid Placements
Any article that makes any funding source look bad is bad for business and reduces the leverage of the entity during the advertising and paid placement negotiations. So the media output increasingly takes on a fantasyland aspect that is most appealing to marketing departments of vendors.
A single datum provides a startling view of the challenge: Through the first half of 2012, Google by itself took in more ad dollars than the entire U.S. print media, magazines and newspapers, excluding only the ads on newspaper websites, which even today generate only about 25 percent as many ad dollars as print advertising. – Media Complicity
This has done nothing but further increase in Google’s favor since this time.
In this country, the FTC has already dismissed an opportunity to do a full antitrust review of Google, in part, we can speculate because there is no great public support for the news media generally. Indeed, a Pew poll, released on July 11, found that only 28 percent of respondents believe that journalists “contribute a lot,” down from 38 percent four years ago. And a Gallup poll, published on June 17, revealed that only 23 percent of the public have “overall confidence” in newspaper and TV news. – Media Complicity
Readers seem to be confused — whatever they think of journalists, without something being done about Google, the media will continue to be concentrated and continue to be reliant on industry for their funding.
At a time when the Internet is obliging mainstream news outlets to publish online, it is not yet clear whether a way can be found to make up, in that process, for the necessary advertising revenue that once came their way – a problem not confined just to the legacy media but to prospective newer entrants in the news reporting business as well. – Media Complicity
Cutting Journalist Jobs
Increasingly journalism jobs are reduced, as is explained in the following quotation.
In the days that followed, what was harder than losing my job was having to watch the whole industry start to crumble along with it. BuzzFeed laid off 15 percent of its staff the day after Verizon eliminated my job at HuffPost; Vice layoffs came soon after. Gannett, the largest newspaper publisher in the country, cut 400 jobs from local papers. In April, more job cuts hit the Cleveland Plain Dealer, which has shrunk to less than a tenth of its former size over the past few years, leaving just 33 journalists to cover a metro area of two million people. Last week, the New Orleans Times-Picayune was folded into a competitor, ending a 182-year run, with its entire staff, including 65 editors and reporters, let go.
Tech companies are well aware of their negative impact on journalism and have pledged $600 million toward efforts to support it. But this is a drop in the bucket compared to the damage they have caused. $600 million is a small price to pay to ensure publishers become more reliant on the data Google and Facebook harvest from users across their multiple platforms. It would be far more helpful for them to facilitate a flow of digital advertising dollars back to the publishers who hire the journalists and create the content, instead of tweaking their policies in ways that make it even harder for a digital news site to sell an ad. – Prospect
This quote further highlights this.
There are a few reasons for the job losses. Local newspapers have seen much of their advertising revenue vanish as readers move online. They’ve also struggled to attract many digital subscribers after past rounds of layoffs and buyouts eroded their quality. Digital media startups, funded by venture capitalists seeking growth, aggressively hired journalists then scaled back to focus on profitability. Almost everyone is struggling to compete with Facebook and Google, which accounted for three-fourths of U.S. online ads sales last year. – Bloomberg
How Much Google Make from News Created by News Organizations..$4.7 Billion in 2018 According to the News Media Alliance
That $4.7 billion is nearly as much as the $5.1 billion brought in by the United States news industry as a whole from digital advertising last year — and the News Media Alliance cautioned that its estimate for Google’s income was conservative. The journalists who create that content deserve a cut of that $4.7 billion, said David Chavern, the president and chief executive of the alliance, which represents more than 2,000 newspapers across the country, including The New York Times. – New York Times
But Google and Facebook don’t steer news consumers to news sites out of altruism. Rather, their middleman role allows them to take a huge proportion of online ad revenue. As a result, legacy news outlets have lost a crucial source of income over the last couple of decades, which has led them in most cases to shrink or disappear.
The big tech companies “like this business,” Mr. Chavern said. “It’s a good business, where you write for them.” – New York Times
How Google Paints Itself as a Freind of Media
Tech companies are well aware of their negative impact on journalism and have pledged $600 million toward efforts to support it. But this is a drop in the bucket compared to the damage they have caused. $600 million is a small price to pay to ensure publishers become more reliant on the data Google and Facebook harvest from users across their multiple platforms. It would be far more helpful for them to facilitate a flow of digital advertising dollars back to the publishers who hire the journalists and create the content, instead of tweaking their policies in ways that make it even harder for a digital news site to sell an ad. – Google Transparency Project
Facebook has taken notice. In January 2019 it announced it was setting up its own $300 million fund to make payments to journalism projects.30 – Google Transparency Project
Giving to Push More to Reliance on Google
A recipient of a 2017 Google News Lab grant was generally appreciative of Google’s interest in supporting journalism but said “it seems as though many of their programs, unsurprisingly, lean heavily towards subsidizing/promoting the use of Google’s tools, which always raises my concerns about long-term sustainability.”
The scope and scale of the funding shows that the media is growing increasingly dependent on Google for cash, technology, training and other essentials. – Google Transparency Project
How Facebook is Copying Google’s Media Influencing Strategy
And even now, Google has been able to avoid the type of scrutiny that Facebook has endured over the past year. Facebook has taken notice. In January 2019 it announced it was setting up its own $300 million fund to make payments to journalism projects.30 – Google Transparency Project
News Media Alliance tries to fight against the way that Google and other online platforms continue to push out journalism.
Conclusion
In this environment, the term corruption becomes almost a perplexing term. As soon as I read it, my brain froze up, because I am not even sure what it means in the context of a 100% industry-funded environment. Any media entity that reflects the interests of the readers cannot stay in business. There are areas of coverage that pay, like new product announcements, and those that don’t like reporting on project realities.
References
https://prospect.org/culture/digital-media-suffocating-and-facebook-google-s-fault/
*https://www.mediacompolicy.org/2013/07/22/googles-impact-on-journalism/
*https://www.newsmediaalliance.org/statement-senator-mcconnell-cosponsors-journalism-competition-preservation-act/
*https://www.newsmediaalliance.org/
https://www.googletransparencyproject.org/articles/googles-media-takeover
*https://www.nytimes.com/2019/06/09/business/media/google-news-industry-antitrust.html
https://www.newyorker.com/magazine/2019/01/28/does-journalism-have-a-future
https://www.bloomberg.com/news/articles/2019-07-01/journalism-layoffs-are-at-the-highest-level-since-last-recession?sref=tnzoy5oH