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News Wars: Will the tech giants soon reap a lot of money for media content?

Milan Reinartz, Managing Director at iVS

While I’m still young (most days), I’m old enough to remember the advent of the public internet as we all know it, and with the emergence of it, the search engines. I’m a kid in Germany and still remember using Altavista and Yahoo! Search in the first few days, and this new strange thing called the internet that my dad was talking about.

Then Google came.

People started searching with Google and had Gmail accounts. I kept my Yahoo! email and it haunts me to this day with security issues and fake mail, phishing me, marketing functional foods to my friends and colleagues.

But I found it too difficult to change it, so I still keep my Yahoo handle to this day. Overall, it does what it needs for me and it’s free.

After two decades, I have been working in the Internet industry for more than 10 years. The landscape has grown immensely. A key issue of recent times, US and European anti-trust laws are looking to eliminate the large business units of Facebook, Apple, Amazon and Google (a space to track).

Much closer to home, in February Australia passed the News Communications Negotiation Act – a law that forces Google and Facebook to negotiate rates with news companies and pay for content for them.

Or the terms cannot be met, the platforms may be forced to have a price set by independent arbitrators. And The ripples are starting to be felt all over the world to the United States, Who can follow.

It is the federal government’s first move in the world to protect independent news organizations revenues through legislation, aimed at forcing tech giants to pay for what’s in their search feed. However, does the trend of platform-based distribution dominate and are several million dollars “news fees” in one market or the other no more than net flows?

Or is the challenge Australia posing to Google and Facebook on the legislative level is an affinity here to survive and maybe even meet us in Southeast Asia sooner or later?

Also read: Ecosystem Roundup: Will Ovo complicate the gojek-Tokopedia merger?; Singapore faces talent scarcity as tech giants scale

Two sides of the coin

It felt like a very short time after using Yahoo! Search, I started using Google products almost every day. To look up events, find stock and industry news, use G-Suite for work, and don’t forget – Google Maps (which I personally adore).

Admittedly, like most people, I don’t use any other search engine other than Chrome. And it served me well. Working in the media industry, mostly with independent publishers, I worst viewed Google as a mortal enemy to publishers.

Their ad set, led by AdSense / AdX and GAM (Google Ad Manager), has become a nearly irreplaceable tool for monetizing publishers’ ads. Facebook is another story, but it also facilitates lots of publishers i.e. game companies, content streaming, and more.

Until recently, I haven’t thought much about what search and social media means for media publishers and how dependent they are.

From Listening to the Pivot, a podcast by Kara Swisher and Professor Scott Gallaway, that has changed. My understanding of role search and social plays for independent publishers has deepened. And most importantly, I have learned that publishers are not independent at all.

In the media world, the monopoly of Google and Facebook is not only an incredible success story but also a notorious one. Ultimately, marketers have always used the most effective tools available to reach their desired audience on a large scale.

Historically, this has only been achieved through a combination of TV, outdoor, newspapers and magazines – the internet, and together with social media and search, the tools have provided a platform to access. the audience is much more efficient.

And with a strong shift to platforms, it’s obvious that independent publishers follow to leverage platforms to get their content to the public.

The arguments of the foundations boil, that they simply facilitate intent The Internet is open, and as such, the consequence for news companies is a natural progression that must be accepted. Ambiguous and self-service, but still somewhat justified by face value.

Naturally, the major independent news publishers may not be on the same page and, with their lobbying and PR, have begun to rethink their position. This topic has long been a prominent topic in Europe and America.

Also read: Who will benefit from US attacks on Chinese technology giants?

Responses take many forms: lobbying government agencies, launching subscriptions and fees (a topic worthy of a separate article), in-house video distribution tools (moving away from YouTube) and in some cases even boycott Google’s advertising infrastructure almost entirely by working with only standalone ad servers and ad technology platforms.

(I say “almost” as in the world of ad technology, it’s really hard to get rid of Google entirely because there are many layers in the buying process and Google plays an important role in everything.)

Axel Springer of Germany is an example of a leading publisher is cutting its dependence on walled gardens for quite a long time.

“Gray area”

Consider how we got our news in the first place? There’s a lot of research showing that more than two-thirds of the US population gets their news from social media, without a doubt, Facebook and Instagram take the lead in this regard.

The rest will be driven by Google Search for mostly academic purposes. So in terms of Search, I find this posing an interesting question – where is this going?

Facebook and Google benefit from platform users using their channels to manage news, by being able to display ads at different stages in the process. But so do publishers, at least when users click on their pages through a web browser, AMP (accelerated mobile pages) and FBIA (Facebook Instant Articles). As usual, the devil is in detail, so let’s go a little deeper here:

How much preview content can platforms show in addition to headlines and images, and when should they pay for displaying news content? And don’t confuse “should” with “will”. Aside from what’s supposed to be true or false, I believe the answer lies in the evaluation of leverage.

Platforms offer great leverage to publishers, and the opposite is true. The question arises if the benefit / effort calculation can still make sense, and to what extent governments will play a balancing role. Don’t forget that Facebook and Google don’t produce news, they just serve as aggregating and regulatory platforms, and in some cases it supports political agendas, as we’ve seen. . Cambridge Analytica scandal became headlines in 2018.

Such events could reinforce the argument that calls for governments to intervene and defend independent journalism at its core.

Also read: Top technology news today, March 22: Tech giants express concern about Singapore’s anti-fake news plan

So next …

Consumers will arrive where they can most easily access their content or simply continue doing what they are used to. Most will continue to receive their news through Social Networks or Search. However, I’m still using my Yahoo! email handling, still readers (physical or through publisher apps or quick links).

Without a doubt, platforms will continue to play a major role in content delivery. And with the proliferation of podcasts, CTVs, and new platforms like Substack, we’ll continue to see changes in where and how we choose to consume content.

One thing is for sure: quality indie news content is still here. And when and where publishers have to take up enough finances and realize that they may be required to collect debt, they will likely push back – and government agencies will rally behind them to the point where they can continue to exist and tell the stories of today.

I personally find it reassuring to see an increasing awareness of this topic worldwide. And as someone who has lived in New Zealand for more than 10 years, I can comfortably credit the Australian government for taking that bold first step.

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Image credit: Milan Reinartz

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