By John G. Chachas
Chicago Tribune
In 1787, on the eve of the French Revolution, Thomas Jefferson wrote to Edward Carrington, dispatched to the Continental Congress, on the role of a free press. If he had to choose between “a government without newspapers or newspapers without a government,” Jefferson wrote, “I should not hesitate a moment to prefer the latter.” The founding father feared governments, including the one he helped design, would become predatory if unchecked by a knowledgeable citizenry. And here we are.
Today, local enterprise journalism is about to succumb to a different kind of threat as large digital platforms, led by Google, Facebook and Twitter, warp the value chain of original content. Like a stealthy neighbor, Jefferson’s daily newspaper has been stolen by these digital platforms, which use the content but pay nothing for the privilege.
This digital theft has been unwittingly supported by algorithmically herded consumers who have been trained to expect content on-demand at the mere cost of a few keystrokes. To them, the idea of paying for news is as puzzling an anachronism as the founder’s powdered wig. The value derived from consumers’ attention online has accrued to the top three digital platforms, leaving content creators and those responsible for maintaining publications with mere crumbs.
In a race to the bottom, publishers now chase digital traffic with controversial and partisan clickbait rather than the reasoned and substantial reporting necessary for an informed electorate
So how did this happen? How is it that the creators of news, knowing full well they have legal copyright protection under the U.S. Copyright Act, have allowed the digital platforms to gain such power? The immense reach of Google’s search engine, the dominance of Facebook’s 1.5 billion social media subscribers, and the prolific growth of Twitter’s consumer broadcast platform occurred under the watch of enterprise journalism. Many hearings could be spent dissecting how this happened. Complacency or fear of being left out of the digital ecosystem by local journalists is partly responsible for allowing unrestricted access and use of their content for far too long.
Today, these digital platforms represent as much as 60% or more of digital traffic for some news creators. It is an impossible challenge for even large dailies such as the Chicago Tribune to tell Google, “if you don’t pay us, then your search customer cannot see our content any longer.” Local publishers have little leverage.
The three largest and most nationally distributed news creators in American publishing — The New York Times, The Wall Street Journal and USA Today — may have enough reach and gravitas to survive the digital transformation.
Unfortunately, the economic data on the survival prospects for papers such as the Los Angeles Times, Salt Lake Tribune, Seattle Times, Denver Post and a deep list across this nation is bleak at best.
The downsizing of local news coverage has been astonishing. Since 2004, more than 1,800 newspapers have closed in the United States, and the pace of closures has only accelerated during the pandemic. Worse, there is no realistic mechanism where their attempts at digital monetization can sustain operations.
Imagine the consequence if the authoritative newsgathering organizations covering state legislatures across this country cease to deliver their local coverage. One can only wonder what the California state budget might look like if the Sacramento Bee isn’t doing investigative reporting.
The solution is not complicated. Google, Facebook and Twitter must acknowledge that their billions of daily users benefit from access to edited, fact-checked and verified local information. These platforms, directly and indirectly, earn what some estimate could be $10 billion annually from their access to this “free” content. Sorry, it isn’t free. It is being stolen. It is long past time the American publishers were paid a fair and appropriate license payment for access to their product.
The payment mechanism is not new. The Copyright Tribunal establishes mechanisms and license payments for all types of copyright-protected intellectual property. Music publishers and artists are routinely compensated for the reuse and republication of their assets.
The governments of Australia, France and now Canada have taken steps in recent weeks to force such payments, with Google and Facebook threatening to withdraw all search and social media in reply.
If Google, Facebook and Twitter can’t recognize and acknowledge it is both fair and a legal right for the publishers of content to be paid, then Congress must act. It would be logical and preferable for the digital platforms to enter into consensual agreements to pay appropriate use fees to publishers as mandated under existing laws.
If Congress fails to act, the economic cost will be nothing compared to the damage to the nation’s electorate. It’s time to acknowledge the essential role of fact-checked local journalism in our democratic society.
If Jefferson were watching, he would be worried.
John G. Chachas is the founder and a managing partner of Methuselah Advisors, a financial advisory firm specializing in media and digital content.
