The future of news cannot be built on a broken view of the past

Google's VP of news, Richard Gingras, argues that our understanding of today's publishing industry is built upon a fundamental misreading of the past.

At the mid-point of the ACCC’s 18-month inquiry into the impact of technology on Australian media, it’s time to acknowledge that a profitable future for the news industry is attainable if we acknowledge and move beyond the challenges of the past and work together to adapt to the reality of a digital future.

There is cause to be optimistic about the future of news publishing in Australia, but not on the basis that success will be achieved by preserving old business models – it will depend on publishers embracing technology to reach audiences in different ways, and rethink their commercial strategy.

These are critical considerations as Australia’s competition regulator examines the transformative impact of digital platforms on the news and advertising industry and considers what action, if any, should be taken.

But by taking – as some of Google’s detractors choose to do – an overly simplistic and homogenised view of technology, we risk encouraging an overly simplistic policy response.

Technology platforms, and the services they provide, are dramatically different. Twitter, YouTube, Apple, Google, Facebook and Amazon are not the same. They have different business models, different use cases and different motivations for their behaviour.

A simplistic narrative of news organisations being suddenly poleaxed by technology, with “digital platforms” cast as the villains, is both incorrect and helps no-one – least of all today’s media companies.

Before the World Wide Web arrived, a newspaper was your local internet. It’s where we came together to find out information, discuss events, trade goods, meet people. That was how it worked for most of the last century.

But people’s habits have changed markedly since then, deeply impacting the way journalism is funded, and it’s important to understand how and why that happened.

For the first decade or so of the life of the internet, from the mid-90s through the mid-00s, many publishing executives viewed it first as a novelty and then later as a handy, low-cost additional means of reaching audiences. The revenue streams they generated from their print classified and display advertising seemed impregnable, and there was no obvious cause for concern. For too many years – perhaps two decades, in some cases – this was their approach.

This was a devastating lack of assumption about the impending wave of change the mobile internet would create.

That is not a criticism – I understand the mindset of the times, because I was there. I was among the new breed of publishers that were digital-only, having co-founded Salon.com, the first digital-only magazine.

To put oneself in the shoes of a newspaper executive in 1998, when their classified ad revenues resembled rivers of gold, it’s easy to imagine how news and the business model supporting it could be seen as inextricably linked.

In fact, the old funding model for journalism deteriorated because the revenue flow wasn’t based on news, it was largely based on those marketplaces and on display advertising around softer “lifestyle” content. The value proposition of the Adelaide Advertiser wasn’t: “We have the best local crime and council coverage”. It was: “Here’s everything you need to live a good life.”

The internet, by putting a printing press in everyone’s hands, created a vast new marketplace of diverse services and expression that detoured around incumbent publishers.

Classified ads, which contributed perhaps a third to a half of the revenue of many newspapers, migrated online and splintered into hubs for cars, real estate and jobs, some of which today remain under the stewardship of the publishers. Trading of goods is not even considered advertising any more – it’s now the domain of online marketplaces.

This is why it is incorrect to say that technology platforms destroyed the news industry. The disruption was driven by changing consumer behaviours. Without that understanding of the past it would be impossible to find a way towards a profitable future.

So where indeed do we go from here? There are reasons to be optimistic about the future of news in a digital world, but the solution is not simple, and there is no one path to success, because not all audiences are the same nor any two publishers exactly alike.

Today, news publishers must reframe their value proposition around, well, news. If you’re asking people to pay for content, which many publishers are now doing, it raises the question: what’s the value proposition? Why should a consumer be paying for this? They have to have news that is valuable, which consumers can’t get elsewhere.

Google puts the user first in everything that we do – and we acknowledge that this hasn’t always been helpful to publishers, particularly those with paywalls. But we have listened to the industry and made changes to get the balance right, in the interests of both users and publishers.

Today, Google is helping publishers in a number of ways, whether by supporting innovation in their newsrooms, providing advertising exchanges, working to create signals that differentiate premium content from misinformation, or helping casual readers become paying customers.

Google and publishers share a common cause – we both value and depend on free expression and universal access to knowledge

This is why, as Australia weighs the changes that have swept through the news industry over the past two decades and considers whether new rules are needed, it is important to understand that you cannot take a homogenised view of the many digital platforms used by people around the world to discover, communicate and trade. To do so would be to misunderstand the dramatic changes in the marketplace and consumer behaviour, and to risk a crippling response that stifles innovation and creativity.

We cannot and should not set back the clock to a bygone age.

Richard Gingras is Google’s VP of news.


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