As news outlets struggle to adapt to shrinking budgets during the digital age, tech companies have grown bigger, wealthier, and more entrenched in all aspects of daily life. The uneven playing field leads many to question if Big Tech should subsidize the news they use, which is the focus of new research by the Center for International Media Assistance (CIMA) at the National Endowment for Democracy (NED).
The report, “Making Big Tech Pay for the News They Use,” written by Courtney Radsch, explores current efforts around the world to rebalance the relationship between journalism and Big Tech. Here are five key takeaways:
Big Tech dominates the digital advertising market and controls the infrastructure and market for digital advertising.
The rise of the digital AdTech system–how advertisers buy, manage, and measure digital advertising–has resulted in a new advertising ecosystem that redirects ad revenue to tech companies that previously went directly to publishers. The consequences for news outlets around the world are grave as they seek to maintain revenue streams that can support independent journalism. This is why publishers and policymakers in many countries are now examining new ways to fund independent journalism in a market that has been transformed by Big Tech.
Bold new initiatives in developed economies already compel platforms to pay for the news they use.
Australia’s 2021 News Media Bargaining Code and the European Union’s 2021 Digital Copyright Directive have been pioneering in their efforts to force Big Tech to pay for news, and have created an opening for other countries to do the same. Media support groups in Brazil, India, Indonesia, and southern Africa have also launched campaigns to implement similar frameworks in their own countries.
The debate over the role of tech companies is mostly focused on developed Western countries with large economies and regulatory expertise.
These important discussions seldom consider the constrained choices media face in countries around the world that are still struggling to transition to the digital age, particularly in developing economies. More support is needed in those countries to develop the legal and regulatory infrastructure for distributing new tax revenues, facilitating bargaining, and protecting copyrights.
Three types of policy interventions could help rebalance the relationship between news producers and Big Tech: digital taxation, competition policy, and making changes to intellectual property laws.
The three policy approaches, each with benefits and drawbacks, have different impacts on traffic and revenue generation. The effects of these trade-offs on smaller, less established news outlets–often left out of deals between publishers and tech giants–are under researched.
The opacity of the AdTech system makes it difficult to design effective and informed interventions.
To design effective policies that can address the inequalities of the AdTech system, more data and research on the relationship between traffic and revenue are also needed. Tech platforms may help news publishers gain more visibility for their content, but an increase in visitors does not necessarily translate into an increase in revenue.