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CAIRO - 11 July 2017: American newspapers are moving to avoid their replacement by digital giants such as Facebook and Google for more financial share and collective bargaining power, according to an article by Los Angeles Times on Tuesday.
The News Media Alliance of newspapers plans to request permission from Congress to join economic forces against Google and Facebook and to push forward for a new law that will allow their members to negotiate collectively without getting in trouble with antitrust regulations.
David Chavem, president and CEO of the Alliance said in an op-ed in the Wall Street Journal Monday that the newspapers want “a special pass because, they said, Google and Facebook have too much control over how news gets distributed and they’re sucking up all the ad dollars.”
The News Media Alliance is a conglomerate comprising LA Times, the Washington Post, the New York Times, the Wall Street Journal and other small newspapers.
According to Los Angeles Times staff writer, David Pierson “For year news organizations have had little recourse but to cede more distribution and advertising dollars to Facebook and Google, even agreeing to give away articles in the hopes the wider digital audience will pay off in the long run.
By banding together, news outlets will have more leverage against the two companies that command more than 70 percent of the $73 billion digital advertising industry in the U.S.,” Pierson added.
Pierson notes that for years, news organizations have had little recourse but to cede more distribution and advertising dollars to Facebook and Google, even agreeing to give away articles in the hopes the wider digital audience will pay off in the long run.
However, with the increase in companies’ ad revenue, the newspapers’ share of them declined to $18 billion in 2016 compared to $50 billion 10 years ago, according to Pew Research Center.
The News Media Alliance stated that good reporting requires both more time and costs; more importantly news industry should continue to exist amid the continuous doubtful news, opinions, and hoaxes.
Chavern stated in the Wall Street Journal, that Google and Facebook are not relevant to the tasks of the news industry such as unveiling hidden truth, exposing corruption, and sending correspondents to war zones to be updated by authentic news.
“It is easier for them to assign these tasks for the news industry at a tight economic platform,” he added.
It is expected that stronger intellectual-property protections can be applied if all news industries rejoice to negotiate with Google and Facebook and to push forward for a balanced revenue and data.
In response to these actions, Google has released a statement mentioning that it had good intentions in introducing news industries to the digital platform including their challenges and opportunities.
CEO of Facebook Mark Zukerberg announced late June that the company’s users have reached two billion across the world and have also taken over Instagram and Whatsapp; while Google is known as a search giant consuming up to 80 percent of searches.
Facebook’s capital amounts a total of $649 billion while Google’s capital amounts a total of $434 billion, leaving the news industry to less financial power as the capital of both the Wall Street Journal and the New York Post amounts to a total of $7.55 billion while the New York Times amounts to a total of $2.78 billion.
A report published by ad Agency Zenith by end of 2016 suggested that the advertising expenditure of social media is expected to replace newspapers in the upcoming four years as the rate of advertising is growing 20 percent annually, reaching a total of $50.2 billion by 2019. In 2019 it is expected that advertising on Facebook and Twitter would reach 20 percent of the total internet advertising compared to 16 percent in 2017.
The agency also expects that a 4.4 percent ad spend growth will be achieved by 2018.
Infographic on Facebook and Google's domination of digital market- Egypt Today/Pakinam ElGohary
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