Big Tech and the News

Audio of this conversation is available via your favorite podcast service.

News and journalism organizations and dominant tech companies are in a years-long battle over content, clicks, and revenue, and the tech companies are winning. What are policy options that encourage both the sustainability and quality of news content on popular online platforms? In this episode, Rebecca Rand explores perspectives on the subject, drawing on a conversation hosted by Justin Hendrix with experts Anya Schiffrin and Cory Doctorow at the Knight Foundation's INFORMED conference earlier this year.

What follows is a lightly edited transcript of the episode.

Justin Hendrix:

Good morning. I'm Justin Hendrix, editor of Tech Policy Press, a nonprofit media venture intended to provoke new ideas, debate, and discussion at the intersection of technology and democracy. This week we're going to talk about big tech and the news.

(News clip audio montage):

Meta is threatening to remove news content on Facebook and Instagram in California.

Google saying it plans to block Canadian news.

Facebook has blocked all news pages in Australia.

Google says some California residents will no longer see California-based news websites in their searches as it takes a stance against legislation making its way through Sacramento.

Justin Hendrix:

What you just heard are artifacts of the ongoing standoff between Meta, Google, and the news industry, and I wanted to do a bit of a deep dive this weekend on it. So we're bringing back our audio reporter, Rebecca Rand. Good to see you, Rebecca.

Rebecca Rand:

Good to see you too, Justin.

Justin Hendrix:

For new listeners, Rebecca was our audio intern last summer. She's just finished her master's at CUNY's Craig Newmark Graduate School of Journalism. And then what's next for you? All right, what's that face?

Rebecca Rand:

That's my “I'm about to graduate from journalism school after several months of massive media layoffs” face.

Justin Hendrix:

I do not envy the position you or any of your classmates are in right now. That's something that's related to what we're going to talk about on the show today. So let's start there. Why don't you tell me a bit about what it's been like for you and your classmates coming out of the program?

Rebecca Rand:

Yeah, sure. So we started hearing about these layoffs in my second semester of J school. It was winter moving into spring 2023, and my classmates and I, I think we were in denial at first, like, "Oh, it's just a fluke." But then it was one after another.

(News clip audio montage):

More media job cuts.

Rebecca Rand:

After another.

(News clip audio montage):

Buzzfeed is closing.

The Messenger.

Vox is now laying off staff across its business.

Chicago Public Radio.

Forbes cuts. At Vice News.

Are really wiping out right now, and it's tough in old legacy media too.

Major layoffs at the LA Times.

Laid off nearly a quarter of its newsroom.

New York Public Radio.

News Corp.

The Washington Post.

NPR.

Conde Nast.

Insider.

Paramount Global.

Cuts at Sports Illustrated, Time, and National Geographic.

Rebecca Rand:

The Texas Tribune, The Athletic, and on and on and on.

Justin Hendrix:

Wow. So you're halfway through J school. This starts happening. Did you regret your decision to go back to school?

Rebecca Rand:

Well, I've definitely wondered if it was the right choice, but there wasn't really a good alternative. I went to grad school because it's really hard to get an entry-level job of any kind these days without existing experience or connections. It's annoying, but it's true. And it's largely true for journalism, at least the kind of long-form reporting I want to do. Maybe in the old days I could have cut my teeth at a local paper, but I don't know if you've heard there aren't many of those left anymore.

Justin Hendrix:

That's right. I guess maybe you could have struck out on your own. I mean, you have considered freelancing, starting your own podcast.

Rebecca Rand:

Justin, if I had a dollar for every time one of my relatives said, "Just write a blog. Anyone can start a podcast," I'd be, well, okay, I wouldn't be rich, but I'd have like 20 bucks. It's not that easy. And please do not tell any of my future employers this or they'll think I'm not a self-starter or whatever.

Justin Hendrix:

I think, unfortunately, we may be telling a few people about this right now, but having watched you work at Tech Policy Press last summer, I can say you are absolutely a self-starter.

Rebecca Rand:

Thank you, Justin. But I guess that's part of the point. It's a lot easier to be a self-starter when you're starting from somewhere. School seemed like a really good way to make sure I learned how to do things right. It's sort of a fast track to get a bunch of really high-quality clips, and I did great. I got published in my second month of school and now I'm more skilled than ever.

But now as I'm about to graduate, jobs are really scarce and the job market is really competitive. And that was always true, but it's even worse now. At my school, in the past, at least the business journalism kids could pretty much count on getting jobs after graduating, like 90% of them. I actually spoke to the head of the business journalism program and he told me that this year his job placement rate for his cohort is half that, or even less than half that if you're talking about permanent full-time positions. I have so many bright, talented colleagues and we're all really stressed out. None of us got into this to make tons of money. We just want enough to live.

Justin Hendrix:

Well, I can certainly tell you having worked in this industry for a bit that it is not a great place to get rich. And as someone who has started, of course, a nonprofit, a media organization myself, I can tell you it's not easy to do either. Tech Policy Press relies on philanthropy and donations from readers, and it's a hard road. Unfortunately, I don't think at scale, no matter how much the wonderful philanthropists that do invest in projects like this one and so many others put into the pot, it's still not going to correct the dynamic that you're talking about. But this isn't the first time we've heard that journalism is dead or dying.

Rebecca Rand:

No, it's not.

Justin Hendrix:

So what do you regard as new this time from your perspective?

Rebecca Rand:

I mean, you're right. Honestly, not much is really new and that's kind of the problem. It's like a few extra wounds in this death by a thousand cuts process for the news. Media companies are saying that the past year or so have been especially bad due to changes in search algorithms and social media platforms that are reducing traffic to news sites. And overall, I would say the media is grappling with and has been grappling with this for decades now, the issue of finding a sustainable business model. Part of that is we don't know how to get people to pay for news online. Some publications like The New York Times have managed to convince people to pay, but other organizations either rely on big charitable donations, these are your nonprofit newsrooms like ProPublica or you, and some countries have really robust public media, which gets government funding. We used to have that here in the US to a certain extent, but that funding was slashed by Congress decades ago. And another way to get paid for news is by hosting ads on your website. And all of these strategies have their own benefits and drawbacks.

Justin Hendrix:

Well, certainly this debate about how to make journalism viable has been going around and around in circles for many years. It's been a long time since I remember folks like Clay Shirky writing essays that really framed up the challenge. So many reports, so many white papers, so many convenings that I've participated in and that many others around the CUNY journalism school have participated in over the last two decades.

Rebecca Rand:

Totally.

Justin Hendrix:

So in the diagnosis of what's wrong with journalism, a lot of folks point the finger at big tech.

Rebecca Rand:

It's always big tech. All right, tell me more. What have they done this time?

Justin Hendrix:

So there's a growing acknowledgement– and you see it in lots of legislatures, lots of governments around the world– that big tech has too much power over the media industry and over journalism in particular, which is not surprising since the biggest place people are getting their news these days is online. We know tech is embedded in every corner of the internet, where people find the news, where people share the news, where people buy new subscriptions, and of course advertising.

Rebecca Rand:

Yeah. I mean, if you're online, big tech is going to be either making money off of you or asking you for money in some way.

Justin Hendrix:

That's right. So there's been a recent push to look into the ways that big tech wields this power in the market. Also, how the companies have used that power to develop products that would be impossible without news. This process has left the media both financially strapped and still totally dependent on big tech to make what little money they can. And a lot of folks, myself included, regard it as market failure.

Rebecca Rand:

Hooray.

Justin Hendrix:

So I recently moderated a kind of fireside chat with two really smart people who are thinking about these issues, digging into the idea about what should be done, how can we possibly move billions of dollars back towards news-gathering? How can we reformulate the market in a way that makes journalism sustainable?

Rebecca Rand:

Right.

Justin Hendrix:

So one of the scholars who was part of the conversation is Anya Schiffrin.

Anya Schiffrin:

Thank you for inviting me and I'm really glad to be here. I think that we all know what the problems are. Since I teach at Columbia, I'd like to be cheerful. And so I really focus on, what are the solutions?

Justin Hendrix:

So Anya and I have taught together for some years. She runs the tech, media and communications specialization at Columbia University's School of International and Public Affairs. And the fireside chat was hosted by the Knight Foundation. And I think Knight brought her in because she recently published a paper that calculates how much value the existence of journalism online actually generates for big tech companies like Meta and Google.

Rebecca Rand:

I guess I'd never considered the idea that maybe big tech actually benefits from the existence of news online. I guess I always thought of it in reverse. So how does that happen?

Justin Hendrix:

It's all based around this idea that news and products like Google are essentially complementary services, at least from the user's point of view.

Rebecca Rand:

What's a complementary service?

Justin Hendrix:

Well, to explain it this way, I want you to imagine what would happen to the news if there was no Google.

Rebecca Rand:

I mean, I think at least what media companies are saying right now is that a lot fewer people would end up reading the news. A big way people end up on news sites is that journalism has the answer to a question that people type into the search bar.

Justin Hendrix:

Right. So we've known that for a long time, but now think about it in reverse. What would happen if the news disappeared from Google Search?

Rebecca Rand:

Yikes. I mean, all I can think of is that it would be replaced by this sort of toxic cesspool of AI-generated search engine optimized articles that don't really answer your question and then try to sell you something.

Justin Hendrix:

Exactly. This is what I mean by complementary. Journalism benefits big companies like Google because it brings high-quality information to the platform, information that keeps users engaged and coming back and Google makes money off that. And the news benefits from all this because it gets readers.

Rebecca Rand:

Well, hold on a second, because now Google is doing this thing where instead of directing users to the article, in the search results, they're actually using AI to generate a summary of the answer at the top of the search results, so people never actually visit the news site. So the news site doesn't get the reader, which means they don't get the advertising money or the potential subscriber.

Justin Hendrix:

So that's exactly the issue, and it's just the tip of the iceberg. Google, other tech platforms are actually doing all sorts of different types of reformulations, editing, various automated mechanisms to change the way that information is portrayed. And a lot of that has a high value for users, particularly in a search context. But I'm going to turn it over to Anya because she has a great metaphor for this.

Anya Schiffrin:

Imagine you have a beautiful bakery and you sell really delicious muffins with crusty blueberries on top and every single day somebody comes and takes the top of the muffin, leaves you the little dry bit, and then you can't sell it. And they say, "Oh, you need a new business model."

Rebecca Rand:

Okay, so in this metaphor, the information in the news article is the muffin top.

Justin Hendrix:

Correct.

Rebecca Rand:

And Google is kind of stealing it.

Justin Hendrix:

That's what Anya says.

Anya Schiffrin:

So that's basically what's happened, right? The platforms, Google Search benefits from all the people that need some information, they see the news of the day, and then they don't click through to any news site. That's part of what's happening. What our paper is based on, this whole question of how do you split the surplus value?

So a friend of mine, this literally happened three weeks ago, she called me up and she says, "I'm ready to go to a assisted living. I think my apartment's worth $2 million. My neighbor's apartment's worth 4 million. She wants to buy my apartment. And I looked online and I think that the combined apartment is actually worth 15 million. That's a $9 million surplus. How do we split it?" And I thought, "Well, I can't believe you're asking this question because I've been working with these economists all year. There is economic theory dating back since the 1950s that you have to split this in half."

Rebecca Rand:

Half. Okay. So just to make sure I'm understanding. Together, Google and news, the whole apartment that they have together is worth more than the sum of its parts.

Justin Hendrix:

Essentially.

Rebecca Rand:

Except now Google is taking more than its share of the profit from the apartment, which Anya thinks should be at least closer to half.

Justin Hendrix:

That's right.

Rebecca Rand:

Okay. So is this just a way to point the finger at big tech and say, "You're unfair." What does Anya think we can actually do with this information?

Justin Hendrix:

So back in 2020, Anya started to pay attention to legislation brewing in Australia where the government decided it wanted to help news companies negotiate with big tech companies. And this idea wasn't totally unheard of. Here's what Anya said.

Anya Schiffrin:

And I was intrigued by that because so many countries over so many years have tried to get licensing payments and copyright payments and hadn't succeeded.

Rebecca Rand:

So what happened with these other countries?

Justin Hendrix:

Well, Spain is one example she talked about. So back in 2014, the Spanish government wanted Google to pay licensing fees into a pool that it would distribute back to news organizations. Anya says that didn't go well.

Anya Schiffrin:

Guess what happened? Google dropped Spanish news for eight years.

Rebecca Rand:

They dropped. They what?

Justin Hendrix:

They got rid of Google News in Spain.

Rebecca Rand:

Because they didn't want to pay.

Justin Hendrix:

Correct. So at the top of the episode, the montage, we heard of Google and Facebook blocking news.

Rebecca Rand:

Yeah.

Justin Hendrix:

So that's what these tech companies do. If you ask them to pay to feature your content, they just say, "Fine, we'll stop featuring your content."

Rebecca Rand:

But if we believe what Anya's saying, isn't that a bad business decision for them?

Justin Hendrix:

According to Anya? Yes. In the long run it would be a bad decision, but maybe less so for Meta than for Google. But most experts I talk to say this is just a bargaining tactic, not a business move ultimately.

Rebecca Rand:

I see. Actually, can you explain a little bit the difference between Meta and Google here?

Justin Hendrix:

Well, it's really easy to see how Google benefits from the news. It's a little harder with Meta. It's not like most people are using Meta primarily to find news and information. But Anya would argue that Meta still makes money off of news content in two ways. One, it keeps users engaged. And two, every time users show interest in something, like a news article, that's useful data that Meta can use or sell.

Rebecca Rand:

Got it. Still, it sounds like these companies would rather we think that they don't need the news.

Justin Hendrix:

That's right. And here's what Anya says specifically about Google.

Anya Schiffrin:

Google is dealing with the threat of legislation in three ways. They're going to governments and saying, "We're going to drop all your country's news from search." They are spending a fortune on lobbyists. And then they're basically just handing out money to publishers. They're making everyone sign NDAs and the amounts they're handing out are absolutely pitiful. Google is going to publishers in all these low-income countries and they're saying, "Yeah, I'll pay you, 20,000 bucks."

Justin Hendrix:

And just a question, that's an estimate of the economic value that news publishers create for those platforms?

Anya Schiffrin:

Yeah. What they did, and again we can get more into the weeds later, is Google goes around the world telling governments, telling everybody that about 2% of search is news related.

Rebecca Rand:

Okay, well, how are we defining news related? Because if that's the percent of searches where news articles are some of the top results, 2% sounds way too low.

Justin Hendrix:

Right. So that's what Anya thought, and she and a team of researchers expanded this percentage to include the ways that most of us encounter the news on Google. We're not Googling The New York Times. We're asking a question like, "Has this baby formula brand been recalled?" And there's research showing that when there's news in the search results, users spend more time clicking around because the information is good and Google makes money on the ads we see through that extended online journey.

Rebecca Rand:

I see.

Justin Hendrix:

So Anya took this to a team of economists and asked them to calculate how much more money Google and Facebook make thanks to the presence of news in their platforms, at least in the US. And the dollar amount they came up with was huge.

Anya Schiffrin:

The team of economists came back to me and said, "We think Google and Facebook owe US publishers $15 billion a year."

Rebecca Rand:

15 billion.

Justin Hendrix:

It's a lot. I think it surprised her too.

Anya Schiffrin:

And I said, "What? That's a huge, huge number. Do you mind just looking at that again?" And so they went back, crunched again, said, "Okay, really conservatively, we think it's 13.9 billion." So I was like, "Okay, I can't believe I'm going out into the world with this huge number because it's so much bigger than anybody else has been able to get."

Rebecca Rand:

Wow, that's a lot. So you were saying that all this started when Anya heard that Australia was cutting one of these deals?

Justin Hendrix:

Well, just to be clear, the news organizations in Australia negotiate the deals with the tech firms.

Rebecca Rand:

And okay, wait, so what's the government's role?

Justin Hendrix:

So the government's passed a type of law that it calls a bargaining code.

Rebecca Rand:

A bargaining code.

Justin Hendrix:

Yes. The code serves as a sort of set of rules for the negotiations between tech and the news.

Rebecca Rand:

Kind of like the rules of engagement.

Justin Hendrix:

Exactly.

Rebecca Rand:

Okay. And presumably the bargaining code tries to level the playing field a bit between the news organization and these big powerful tech companies.

Justin Hendrix:

That's the idea.

Rebecca Rand:

So how did this pan out for news media companies in Australia?

Justin Hendrix:

They actually did pretty well. They got a total of $140 million for various news organizations.

Rebecca Rand:

So, I mean, that sounds like a lot. Was it a lot?

Justin Hendrix:

Well, it's a lot more than they would've gotten otherwise, but it's still probably only a small fraction of what Anya thinks they could probably be paying based on how much Google benefits from news content.

Anya Schiffrin:

We're talking about a huge, huge, huge surplus that news has contributed to and the money's not being shared. We've switched the discussion from millions to billions, and I think that's actually what happened.

Rebecca Rand:

I mean, I'd love some billions. So do we know what kind of effect Anya's research has had so far, if any?

Justin Hendrix:

I think her goal is to reframe it towards the type of money that's necessary to actually recapitalize the industry of journalism. These small grants of $20,000, $30,000, $100,000 to news organizations just aren't going to cut it. But whether bargaining codes are going to rescue journalism, I think it's too soon to say. These kinds of negotiations take a long time, but Anya says people are really interested.

Anya Schiffrin:

I get email almost every day from all around the world asking for details. So we're doing these pro bono Zooms with loads and loads of countries and publishers and governments.

Rebecca Rand:

I mean, I'm not surprised it's a popular idea. Anyone who cares about journalism as one of the core components of a functioning democracy is really desperate right now for some solution to keep the news afloat.

Justin Hendrix:

Yes. And this is one idea of how to make that happen.

Rebecca Rand:

Okay. So I mean, what are the counterpoints here? Because it does sort of strike me as a little weird for news organizations to get into bed financially with the companies that have been supposedly stealing from them. And do we know the terms of any of these deals?

Justin Hendrix:

We don't. They are private.

Rebecca Rand:

So how do we know that the news organizations that get these big payouts are actually going to spend that money on journalism? I feel like that's just sort of trickle-down economics. And I mean, we have plenty of examples through history showing that big payouts at the top do not filter down to news workers like me. The money stays at the top.

Justin Hendrix:

So I'm glad you brought that up because I want to bring in the other voice from the event that the Knight Foundation hosted, Cory Doctorow. Cory wears a lot of hats. He's a science fiction author, an activist, a journalist, a blogger, and a lot of folks know him from the Electronic Frontier Foundation. When I asked Cory what he thought about these negotiations with news organizations and big tech, he started talking about Canada, which just passed its own bargaining code, the Online News Act, this past winter.

Cory Doctorow:

So I'm from Canada. And so I followed the Canadian news bargaining code very closely, which is why I was personally very dismayed to see Torstar, our largest news company, which is now owned by a couple of guys who were really into online casinos, take a bunch of money from Google voluntarily. …

I just don't think that there's an amount of tech money that we could give to Alden Capital that would lead them to rehire the staff that they fired from the Chicago Tribune nor an amount of money we could give Sinclair that would stop them from turning the Baltimore Sun into a partisan rag. I don't think that if Conde Nast gets into bed with Google and Facebook that they're going to give us back Pitchfork. Apple has just offered all of the kind of A-list media outlets 50 mil apiece to turn over their corpuses. As someone who cares about the news and news workers, I don't see how licensing that material gets The New York Times to not use the resulting model to fire me and replace me with an AI, if we think that that's what AI is going to do. …

So I don't see how creating a regime in which corporations can charge license fees to other corporations, corporations that are insatiably horny for firing their workers gets us better news or more employment for news workers at all.

Justin Hendrix:

So this is a common concern. You hear about these news media bargaining code style deals. Are we just funneling money into Rupert Murdoch's pocket?

Rebecca Rand:

Right.

Justin Hendrix:

And it makes sense why you and Cory are skeptical. But at least in the case of Australia, it looks like their deal with the tech firms actually did create some jobs. So Australia's news media bargaining code became law in 2021, and after a year at least a few big a Australian news organizations and some independent newsrooms as well said they had used the money to hire more journalists. And researchers at the Australia Institute saw a 46% increase in job ads for journalists after the deal went into effect. Now, the data aren't entirely clear, but at least that's some indication that things went in the right direction.

Rebecca Rand:

Got it.

Justin Hendrix:

So one criticism people have of what's happened in Australia is that these negotiations are not transparent. So there's no way to make sure tech companies are paying publishers enough and there's no way to hold publishers accountable to spend the money in ways that actually benefit journalism.

Rebecca Rand:

Or to make sure they don't change their coverage of big tech after making a deal with big tech.

Justin Hendrix:

That's right.

Rebecca Rand:

So clearly Cory's not a big fan of this plan. Does he have an idea of what we should do instead?

Justin Hendrix:

He does. And for him, it starts with transforming the way we're thinking about the problem of big tech stealing from journalism.

Rebecca Rand:

How so?

Justin Hendrix:

Well, first, Cory wants us to think bigger about the market.

Cory Doctorow:

I think that one thing that generally people who show up at a Knight Foundation event about saving the news and saving democracy agree on is that tech is stealing something from the news. But the thing that maybe I disagree with some of you about is what they're stealing because I don't think they're stealing content. I just think they're stealing money. There's a lot of money disappearing between the cracks that doesn't have to do with a failure to pay licensing fees.

Rebecca Rand:

Well, if it's not about them stealing content, what are these cracks?

Justin Hendrix:

Well, the first one Cory talked about is online advertising.

Cory Doctorow:

So take ad revenues, right? Programmatic ads, they're a duopoly. The two companies control the vast majority of that are Google and Meta. They've been caught illegally colluding to rig that market where they raise the price for advertisers, lower the payments to publishers. They provide tools for sellers, which are publishers. They provide buyer tools to advertisers. They run the marketplace where the buyers and the sellers meet. They are also buyers and sellers in that marketplace. So this is like you going through a divorce where you and your partner are both represented by the same lawyer who's also the judge.

Anya Schiffrin:

Can I just say that happened to me.

Justin Hendrix:

We're now going in a different direction with this conversation.

Anya Schiffrin:

When I saw you had said that in one of your papers, I was like, "Oh my God."

Cory Doctorow:

But was the lawyer also the judge? And was the lawyer also trying to match with both of you on Tinder? And when the divorce was over, did the lawyer own your house?

Justin Hendrix:

What?

Rebecca Rand:

Yeah. So that sounds very convoluted.

Justin Hendrix:

Right. And I think that's part of the point. But in the end, if you look at the numbers back in the days of print ads in the newspaper, at least before the 80s, the agencies that sold those ads back in those days got a 15% commission. But now that agency is Google.

Rebecca Rand:

And how much is Google making?

Justin Hendrix:

It's at least 30 cents on the dollar, sometimes more. That's according to the Department of Justice which has an ongoing antitrust case against Google.

Rebecca Rand:

That's a pretty big share for a middleman. So this is one of the ways he says big tech is siphoning off money from the news.

Justin Hendrix:

Yes. And there's more.

Cory Doctorow:

So another way that tech steals money from the news, which is payments. There's another duopoly. Google and Apple who control mobile payments and they take 30 cents out of every subscriber dollar, every donation, every time someone buys a tote bag with the name of a news outlet through an app.

Rebecca Rand:

Not my tote bag.

Justin Hendrix:

Yep.

Rebecca Rand:

Wait, so let's just use an example from this morning. On my way over here, I was listening to the Daily and they had reporters on with their little message saying, "Hey, if you care about journalism and if you want to support us, please subscribe to the Times." So if I were to do what they said and go on my New York Times app and pay them, say $50 for my first year, Cory's saying that a third of that, $16 is going to either Apple or Google.

Justin Hendrix:

That's what he's saying.

Rebecca Rand:

This sounds like a problem not just for newsmakers, but anyone who receives online payments. So any business.

Justin Hendrix:

That's right. And there's another antitrust case against Apple for exactly that reason.

Rebecca Rand:

So Cory's given us two big places where money for journalism is falling through the cracks.

Justin Hendrix:

Yes. And there's one more.

Cory Doctorow:

And there's a third way that tech steals money from the news media and that's blackmail. So the platforms make this promise to their users. They say, "Come on to our platform, tell us who matters to you, and we'll show you what they post." So news entities show up in the platforms, they put a lot of energy into cultivating audiences, and then the platforms turn around and they say, "Actually, we're not going to deliver the media to the people who ask to see it unless you pay us to boost or to authenticate, and this is a rolling and recurring payment."

Rebecca Rand:

Wait a second. Is this now you have to buy a blue check mark on X?

Justin Hendrix:

Yes. And the tech platforms have created other schemes by which news organizations have to compete to get visibility.

Rebecca Rand:

It's funny you mention that because I've noticed lately that the only way I ever see the news on Facebook or Instagram is when it's an ad presumably paid for by The Atlantic or New York Magazine.

Justin Hendrix:

That's right. And it makes sense. Some of these biggest publishers like New York Magazine, they pay social marketing firms to help them buy and target Instagram and Facebook ads.

Rebecca Rand:

So it sounds like the only way to survive in big tech's world is to act more like big tech, or at least embed yourself deeper into their business model.

Justin Hendrix:

Yeah, and I suppose that's not just specifically journalism. Look, a lot of people out there are pissed at big tech firms. They've been called to testify before Congress. They're getting sued by the DOJ. They're getting investigated in Europe. Other places like the UK are passing new laws to try to hold them to account. The problem is way bigger than just the news. And Cory says that's actually a good thing.

Cory Doctorow:

We can hitch the news as a wagon to big political currents that are much larger than the constituencies who care about news. I admit that I'm one of the weirdos who cares about the news. So are you. But we should admit that we are not a mass movement in the way that people who care about, say payments are. Fortnite players are a much larger constituency who are worried about payments than everybody who reads the news, including the people who just do the Wordle.

Rebecca Rand:

So Cory wants the news to forge an alliance with Fortnite players?

Justin Hendrix:

Sort of. He's pointed out a bunch of big changes people are already pushing for that will help the news recoup some of that lost revenue. One of those changes is comprehensive online privacy laws. And another big one is breaking up big tech's various monopolies.

Cory Doctorow:

And so this is why all over the world there is a movement to break up the ad tech platforms. And here that movement is extremely bipartisan. How bipartisan is it? The AMERICA Act, which will break up Meta and Google, is co-sponsored by Elizabeth Warren and Ted Cruz.

Rebecca Rand:

And I assume this will help publishers keep more of the money that advertisers pay to post ads.

Justin Hendrix:

Right. That's 30 cents on the dollar. So news publishers would get to keep more of that dollar.

Rebecca Rand:

Got it.

Justin Hendrix:

So Cory's last proposal has to do with how the news shows up on social media platforms.

Cory Doctorow:

When people sign up for social media, they don't get the stuff that they asked to see so that the platforms can charge the people who publish the things they asked to see ransom to show it to them.

Rebecca Rand:

Right. That's one of the reasons publishers say they're losing money right now, that there's been changes to algorithms that are actually down ranking the news.

Justin Hendrix:

Correct. And like we mentioned earlier, sometimes the platforms do this then turn around and ask you to pay them to "boost your content." So Cory says you can address this by barring platforms from tinkering with their algorithms in ways that hide content that users say they want to see. And this is in line with so-called net neutrality laws, which make it illegal to use your position as an internet provider to negatively manipulate people's online experience in a way that makes you more money.

Rebecca Rand:

Like slowing down the internet when users go on a competitor's website.

Justin Hendrix:

Exactly. It would treat these social media companies the same way, telling them, "You can't make it harder for people to see the stuff they want to see." So these solutions Cory's suggesting are already popular.

Rebecca Rand:

Yeah, I mean, if Liz Warren and Ted Cruz agree on it, that's pretty impressive.

So moving back to Anya and this idea of negotiating payouts between big tech and news orgs, what does she think of what Cory's saying here?

Justin Hendrix:

I think she agrees with Cory that the problems he's describing are real and that they're also a major threat to news and journalism.

Rebecca Rand:

But Cory's also arguing that accepting money from big tech is still problematic.

Justin Hendrix:

Right. And I think Anya agrees there are problems with bargaining codes, but she says at least some of those can be addressed within the codes themselves.

Anya Schiffrin:

We really think that these codes have to include small outlets and we want a commitment that the money is going to be spent on journalism and we want diversity. And I was never, by the way... When I first started looking at this in 2020, I wasn't like some huge advocate. I'm not saying that I'm like the bargaining code girl. I'm saying that right now, it's something in front of us that's transferring money from big tech to outlets. And I think that's a good thing.

Rebecca Rand:

So what I'm hearing is kind of a pragmatic argument, like news outlets are dying today and this gives them an injection of money right now. So what does Cory say to all this?

Justin Hendrix:

His response is that even though it seems like the changes he's pushing for are huge and unattainable, they're actually just as achievable as these new bargaining code laws.

Cory Doctorow:

So I think that there's an implicit idea that fixing ads or payments or fixing these ransom payments for reaching subscribers, that these are big lifts that require a long run-up and that are kind of quixotic quests. And my argument is that these are immediate issues of moment for groups of people who are larger and more powerful than the press and that if the press wants to get the biggest bang for its buck, it should be joining forces on these issues that are not just the parochial interest of the press, but the broad interests of the public around the world.

Rebecca Rand:

I just don't see why he doesn't think we can have both. Why can't the news pursue these short-term deals with big tech as a matter of survival and keep pushing long-term for broader regulation of these big monopolistic tech giants?

Justin Hendrix:

That's a question that some of the people asked that night. Why can't we have both? I think Cory's concern is about the ethics of the thing.

Cory Doctorow:

So I think the problem of selling indulgences is well studied and it's been studied for 500 years, right?

Rebecca Rand:

Wait, 500 years of what?

Justin Hendrix:

I think he's talking about the Catholic Church.

Rebecca Rand:

Oh. Okay. Keep going Cory.

Cory Doctorow:

If you want to extinguish conduct, you shouldn't tax it. You should prohibit it. And I think that the conduct that we need to extinguish here is not indexing the news. I think the conduct we need to extinguish is taking the money.

Justin Hendrix:

So we didn't necessarily solve this debate that night. And...

Rebecca Rand:

You didn't?

Justin Hendrix:

No. And I have to say I haven't solved it in my own mind. I think that on some level I see the urgency of trying to get dollars into the hands of news organizations now, even as I see it as a very urgent thing to try to remake the market. But stepping down from all the kind of, I suppose, strategic level of things there, how's this landing for you, Rebecca? I want to come back to you as the journalist coming out of graduate school. You're looking for work right now.

Rebecca Rand:

Yeah. So on one hand, I mean, I'm ready to accept any solution. I'm not going to say, "I don't want your blood money." But I do wonder how much of this money I'm ever going to see. If the news accepts these sorts of payouts from big tech, it might in the short term relieve just enough pressure, especially at the top of these organizations for us to stop fighting so hard against the real root of the problem, which is that big tech has too much power. They can shut off the news in Australia, Canada, California. So one thing I want to ask you is why are big tech companies fighting this so hard? I mean, I think about Google and Meta and from my perspective, they have so much money. Isn't a few hundred million dollars no big deal?

Justin Hendrix:

It's a few hundred million times the number of years the deal lasts times every new country that adopts one of these codes.

Rebecca Rand:

Okay.

Justin Hendrix:

But you're right, they probably could afford at least some of it in some markets. Everyone's got their own theory on why big tech fights back so hard against laws that appear to be in the public interest. And I suppose we can't know for sure until we actually talk to folks at Google or Meta. But many folks in the tech policy world, including Anya, say that the big tech companies have drunk their own Kool-Aid.

Rebecca Rand:

And what Kool-Aid is that?

Justin Hendrix:

It's sort of the idea of the free internet. That information should be free for all, no copyrights or licensing getting in the way.

Rebecca Rand:

Except please let me profit from it at every step of the way.

Justin Hendrix:

Well, especially with the advent of AI, they want to be able to train these AI models on vast quantities of text, every book, every blog, every news article ever written. If they had to pay for all that, the game would be over.

And we haven't really talked about all the ways that AI is going to change the market for information and for news in terms of both how journalists produce information and publish it and how it's monetized. The deck seems really stacked in favor of big tech in the long run, and they're more or less just doing the exact same thing they've been doing for the last two decades when it comes to negotiating with news organizations.

Rebecca Rand:

You bringing up AI is making me think about something I read recently from a tech reporter, Cade Metz. He pointed out that a problem these companies are actually running into with developing these AIs is that they're actually running out of real-world data to feed the model.

Justin Hendrix:

That's right. They're starting to turn to synthetic data.

Rebecca Rand:

Oh, God. But if big tech companies want to pursue better and better AI, shouldn't they want to make sure that there are people out there, I don't know, journalists generating all of that tasty content to feed the AI?

Justin Hendrix:

One would think. And I think they want journalism to exist. Google and Meta go around and give money to journalism. We're starting to see OpenAI do deal after deal with journalism organizations.

Rebecca Rand:

Right. And I think the school we're sitting in right now got some Zuckerberg money.

Justin Hendrix:

It got some Zuckerberg money and more recently some Microsoft money associated with AI.

Rebecca Rand:

And I'm pretty sure they're partnering up with the Google News initiative as well. So we're happy to take whatever we can get over here. But again, is that just to appease news organizations?

Justin Hendrix:

Maybe. But I think they also may realize they need news for the reasons you just said. It's just that the status quo and the imbalance of power between tech and news with journalism organizations kind of limping along half dead. That's working out just fine for them.

Rebecca Rand:

Yeah. And actually the great journalist Jon Stewart I was watching, he brought on the FTC chair, Lina Khan, on The Daily Show, and he was talking about AI and how these monopolistic type activities are already happening with these big tech companies and AI. And she said something that really struck me.

FTC Chair Lina Khan:

I mean, going back all the way to the founding, there was a recognition that in the same way that you need the Constitution to create checks and balances in our political sphere, you also needed the antitrust and anti-monopoly laws to safeguard against concentration of economic power because you don't want an autocrat of trade in the same way that you don't want a monarch.

Rebecca Rand:

I was really stunned by that phrase, autocrat of trade. And like you, I'm not really sure what the solution is here. It feels like America is grappling with the threat of autocracy from so many angles and it seems that journalism has placed itself right into the center of that fight.

Justin Hendrix:

Well, I suppose that's where it's supposed to be on some level, but what a time and a way for you to start a career.

Rebecca Rand:

That's right. Here's hoping I'll actually have fun.

Justin Hendrix:

Rebecca, thanks again. I'm really glad to have your perspective in this conversation as someone who's just starting out.

Rebecca Rand:

Thanks. I'm actually really glad I got to learn about all of this. And it's looking grim out there, but I'm glad that people care about the news, even if Cory will call all of us weirdos.

Justin Hendrix:

Let's go make some more muffins.

Rebecca Rand:

Yeah.