Sharing Revenue with Online Content Developers

Why in news?

EU is debating to evolve a revenue sharing model between conventional news agencies and online aggregator sites like Google and Facebook.

What is the debate about?

Sites like Google and Facebook aren’t involved in the difficult task of gathering, checking and serving news from around the world.
However, these online giants do receive a lot of eyeballs and generate huge amounts of advertising revenue from providing links to such news stories.
As this effectively means serving users the work done by others (news media in this case), this is touted to constitute a case of copyright infringement.
The current discussion is hence, premised on giving news agencies leverage to negotiate with online news aggregators on revenue sharing models.
If the negotiations succeed, then the big online platforms would be paying for the millions of news articles they feature on their sites.
This could potentially change the current revenue model for news consumption and, perhaps, for other content as well.

What are the current revenue trends?

News articles are the second most popular category on social networks, exceeded in viewership only by posts related to friends and families.
Under the current copyright laws, the online aggregators are not obliged to share this revenue with the content creators.
Notably, revenues for conventional news media are dropping, thereby making the expensive task of investigative reporting increasingly unsustainable.
On the contrast, Google and Facebook together hold 60-70% market share of online advertising across the world and their profits are increasing.
In 2016, Facebook reportedly tripled its profits to $10 billion and Google reported a 20% increase in profits that accounted to $20 billion.
This shift of revenues away from the content creator to the disseminator started with the very emergence of the “world wide web”
This is a classic example of technological disruption altering the value chain and it has been accentuated with the rise of social media.

What is the binary in the arguments?

Social media platforms can argue that they have invested significantly to build their platforms and deserve the right to monetise from it.
On the other hand, news agencies do need revenues to produce high-quality reporting to facilitate continued online traffic on these sites.
While there is logic on both sides, recognizing that there is also a symbiotic relationship is crucial.
It is true that, if Google and Facebook stop linking to news then the revenue for news agencies will decrease even more than the present.
But at the same time, Google and Facebook will also lose some revenues and suffer loss of credibility, as news agencies provide credible content.

How does the future look?

Possible Solution - Some have mooted to extend the concept of “neighbouring rights”, which in the EU is currently available only to authors and not news agencies.
This concept allows authors the right, with 20 years validity, to control the reproduction and publication of their content.
If it is extended to publishers, the news agencies would get better control over the sharing of their content.
The Challenge - While enhancing news monetisation through deals with social media giants is a possibility, given their monopolistic nature, Facebook and Google would play tough.
They could even consider selectively removing articles that demand payment or rather, fine-tune their algorithms to filter out anything that the surfer does not explicitly seek.
The Impact – An enhanced copyright regime could, at the very least, give the news agencies some leverage to try and grab a slice of advertising revenue.
More significantly, this would open the possibility for other content creators like bloggers, musicians and video makers to aspire for a similar deal.
It is to be noted that, while now these people are already being remunerated by sites like YouTube, their share has largely been a pittance and completely according to the terms and conditions of the websites.

Source: Business Standard