Rupert Murdoch, the executive chairman of News Corp and co-chairman of Fox Corp., who built his fortune in the newspaper business, once called the ad-driven profits from his publications "rivers of gold." By 2005, he lamented, "Sometimes rivers dry up."
Nearly 15 years later, everyone working in a newsroom is aware of the existential crisis that threatens the future of local journalism. On one hand, the audience for factual reporting and relevant news is larger than it's ever been, thanks to the proliferation of smartphones and fast internet access. But at the same time, the economics for newsrooms producing high-qualify digital journalism is worse than it's been since mass publishing exploded in the late 19th century.
It's a head-scratching conundrum for journalists. As revenue from print advertising continues to dry up across the board, you'd expect digital advertising to be on the rise, which it is ... just not for news organizations.
Overall digital advertising revenue has tripled since 2011 (the earliest year tracked), according to the Pew Research Center. It grew 23 percent alone in 2018, and now accounts for roughly half of all ad revenue in the U.S., according to eMarketer. Unfortunately, Google and Facebook suck in an estimated 73 percent of all digital advertising in the U.S., including a majority of online display advertising revenue.
Adding to the frustration is that about two-thirds of Americans continue to get a big chunk of their news on social media platforms like Facebook and YouTube. In fact, the news content that flows through their platforms is so important to their users that both Facebook and Google have invested hundreds of millions of dollars (some would call it charity) to help prop up favored newsrooms hit hard by the shifting winds of ad dollars.
Not surprisingly, this shift in online ad dollars has been labeled a "heist" and a "robbery" in more journalism think pieces than I have time to mention here. As a result, news organizations across the country are banding together to finally take on the big tech companies ... with the help of some politicians in Washington.
But not only is the legislation far from a sure thing, there are many vocal critics of the approach itself, including from some prominent journalists.
Mr. Journalist Goes to Washington
Back in April, a top House Democrat teamed up with a Republican colleague to introduce the Journalism Competition and Preservation Act, which would provide a 4-year "safe harbor" for publishers to band together to collectively negotiate with the large tech platforms.
"This is not just about their market dominance resulting in some impact on the sale of widgets, but this is really about the ability of citizens of this country to access trustworthy, reliable, local news, and a free and diverse press--particularly a local press--is really essential to the proper functioning of our democracy," Rep. David Cicilline, a Rhode Island Democrat and vocal critic of what he views as the monopolistic power held by large tech companies, told Washington Monthly in a recent interview.