Google offers newspaper industry $150 million olive branch
Google, the world’s largest search engine, is looking to repair its fractured relationship with newspaper publishers by launching a new working group.
Eight major European news brands – including The Guardian and The Financial Times in the UK, Die Zeit of Germany and Spain’s El Pais – have signed up to the Digital News Initiative.
Google said it would set aside USD $150 million to help participants develop new products, improve training and conduct research projects.
As well as supporting innovation in the newspaper industry, Google said it would also be reviewing how some of its own products and services operate.
Death to Google News
Newspapers will be hoping that review includes Google News. Google’s news-only search index has been a constant bone of contention for the newspaper industry. It may send high volumes of traffic through to newspaper websites, but it also uses their headlines, photos and snippets to create what some view as a competing product. Users who could be starting their web journeys on the homepages of their favourite newspaper are instead browsing the free summaries on Google News.
Earlier this year, Google News was at the centre of a dispute between Google and the industry body that represents newspapers in Spain. The Spanish government had agreed to introduce a new law that would have required Google to pay newspapers a royalty for using snippets from their articles. Google’s response was to shut down Google News in Spain.
Google News has faced similar legislative pressure in other European countries, including Germany. Here in Australia, media mogul Rupert Murdoch has been one of the most outspoken critics of Google and other search businesses. He once branded the leading search engines “content kleptomaniacs”.
Pragmatism always wins
His News Corp business was, perhaps unsurprisingly, not among the initial participants in Google’s Digital News Initiative. Murdoch has been a strong advocate of paywalls and is likely to view search engines as part of the problem rather than part of the solution.
However, Google’s Carlo D’Asaro Biondo, who will oversee the working group, was optimistic that the company could win over its detractors. “We are always open to them,” he told The Financial Times in an interview promoting the Digital News Initiative. “We do believe pragmatism always wins. We will continue to do everything we can to show them we deserve trust.”
The challenging trading environment faced by newspapers has been well-documented. The internet is awash with free content and while most consumers would agree that trained professionals produce a superior news product they have been less enthusiastic about paying for it.
And while print circulations continue to decline, newspapers have also faced an increasingly fragmented advertising model, with Google the largest of a flurry of new players sucking up ad dollars at a frightening rate. The search giant made USD $60 billion from advertising last year.
One area Google may be able to help newspapers is providing a common platform for selling subscriptions or individual pieces of premium content. Google Play and Apple’s App Store have generated billions of dollars for third party content creators since their launch.