The New York Times on Sunday published a story that placed a dollar amount on a central question racking the news business today: Just how badly has Big Tech exploited us?
The answer to how much Google made last year from the work of news publishers, wrote Times media reporter Marc Tracy, is $4.7 billion — “more than the combined ticket sales of the last two ‘Avengers’ movies.”
The staggering figure — $4.7 billion! — ricocheted around Twitter and will surely become an oft-cited media rallying cry against Facebook and Google. It was also quickly torn to shreds. As critics pointed out, the number, published in a study by media industry trade group News Media Alliance (NMA), is a classic bit of industry PR. It’s a flimsy-but-scary figure meant to underscore the real phenomenon of Google’s dominance. Even the Times’ description of the methodology, found all the way down in the 12th paragraph, reads like they don’t buy it:
The News Media Alliance based its new report partly on a study done by the economics consulting firm Keystone Strategy. Keystone Strategy relies on a statistic that was made public in 2008, when a Google executive estimated that Google News brought in $100 million. The study also noted how much company revenues have grown since then, among other factors.
A report extrapolated from a statistic based on an estimation from more than a decade ago… among other factors. The Times, of course, should know better than to so credulously write an entire story around one study funded by its own industry. Google said “these back of the envelope calculations are inaccurate” and it’s hard to argue with them. For Google, subsuming the news business isn’t worth $4.7 billion. It’s priceless!
Digital news publishers are clinging to life, so there’s an emotional truth to the study. For years, media companies have griped about the role of Google search and News as unwelcome middlemen. The company plays no role in media production but siphons off profit from publishers’ hard work, the argument goes. Not to mention the arms race with Facebook has created a digital “duopoly” sucking up nearly the entire digital advertising economy. This is an important story where whiffing on key structural points to the tune of $4.7 billion muddies the water in Google’s favor.
The Times incidentally spoiled an opportunity to explain how these numbers come to be. Reporters in all coverage areas, from politics to business to health to sports, deal with trade groups advocating for the interests of dues-paying members. These organizations generate a lot of traction in the press in part because their representatives are genuinely helpful to reporters. Trade group insiders know what’s happening in the industry, throw events where reporters can meet key sources, and function as media-savvy synthesizers good for a lucid, quick quote on deadline.
A lay reader of the Times might wonder why they’re seeing this particular story in the paper. Well, trade groups also commission research with a compelling top-line finding, which they then offer as an exclusive to a prominent reporter on the beat. That research seeps into the media bloodstream, framing how an issue is talked about. “The news industry has been asking for these numbers for years,” NMA said in a statement to The Outline. “It is incumbent upon Google to be transparent about their income derived from news.”
In the Times story, we find out why it’s this week that we’re learning about Google’s “$4.7 billion” news haul:
The News Media Alliance is making the study public in advance of a House subcommittee hearing on Tuesday on the interrelationship of big tech companies and the media.
A Member of Congress will surely now ask about the $4.7 billion figure at the hearing, citing this Times report. Indeed, the NMA has been behind a media-wide effort that many publishers support: allowing the industry to collectively bargain against Facebook and Google.
Congress granting the media industry an exemption to “collude” and bargain together was always something of a long shot, but after the Democrats took control of the House, the measure gained new life. Hatred of the tech platforms is one of the few bipartisan issues in Washington these days. (Either way, it will be a relief for unionized media workers to learn that their bosses do in fact think collective bargaining can achieve a fairer deal for the little guy).
“The story is fair and accurate,” a Times spokesperson said in a statement. “It made clear that the $4.7 billion figure is the result of a study by News Media Alliance, a nonprofit organization. We go on to call the $4.7 billion figure an estimate and made sure to explain to our readers how this group came up with that number. We also disclose early and explicitly the relationship between the Times and the alliance.”
In the third paragraph of its story, the Times makes the important disclosure that it is, in fact, a member of the NMA, which is the chief trade body representing the American newspaper industry (the group changed its name from the Newspaper Association of America in 2016). Formerly a relatively sleepy organization, in recent years the NMA has been shaken up by its CEO, David Chavern, an advocacy veteran who joined in 2015 after a decade at the U.S. Chamber of Commerce. Chavern has led a renewed, impressive charge on multiple fronts in DC. The NMA, for instance, lobbied successfully to overturn a Trump tariff on Canadian newsprint that would have hurt regional American newspapers. But the key issue for any media executive, and thus its trade group, is the long war with Facebook and Google.
During its glory days, when American newspapers were printing money, the industry didn’t really need a ton of business advocacy in Washington. Today is, of course, a different story. We’re in an environment in which 2020 Democratic candidates are trying to one-up each other on breaking up Big Tech and Mark Zuckerberg is inviting regulators into it. In the media industry, there’s a chorus agreeing it’s time for some action.
There doesn’t have to be a conflict of interest here for the Times, which is perfectly capable of offering this kind of context about the behind-the-scenes workings of its own lobbyists. But as the tech platforms continue to eat the news business, publishers should probably remember that failing to hold Google accountable on the strict merits of what it’s doing may allow the company to retain power from the industry for longer, or maybe forever.