News publishers and Big Tech platforms are in my ways “frenemies.” Publishers like all the traffic Google and Facebook have the power to send to news content, but they’re less delighted being beholden to the tech giants and at the mercy of their policies. Publishers also dislike Big Tech companies’ tendency to keep mobile users on tech firms’ own platforms by importing news sources’ content instead of sending consumers to publishers’ platforms.
But Google is aiming to build a friendlier and more productive relationship with content producers, announcing a plan Thursday (Oct. 1) to pay publishers more than $1 billion over the next three years via a new news content licensing program.
The move has been anticipated since at least February, when stories began to emerge that Google was considering a news service of its own to compete with Apple News. The rumor was that Google was in active discussions with several publishers about paying licensing fees to use content in an upcoming project.
And in June, Google formally confirmed a project called News Showcase, designed to allow participating publishers to curate how their content is displayed on the platform. Google also introduced a "story-panel" concept to allow publishers to vary their content offerings via timelines, bullet points or related articles — teasing articles and further engaging users into heavier consumption of content.
And now, Google has announced licensing deals with about 200 news publications in select countries, with an eye toward future geographic expansion. But interestingly, the United States isn’t in the first round of select countries. Instead, the service launches this week in Brazil and Germany.
Additionally, the News Showcase will only be available in the Google News app on Android, although Google confirms that the feature will soon expand to the iOS app, the Google Discover app and Google search.
“It's clear that the newspaper industry has long faced economic challenges,” Brad Bender, Google's vice president of product management for news, told CNN Business on launching the product. “I think a number of us in the ecosystem want to step up and enable a better future for news. This is a very big investment — our biggest investment today — but it really does build on our 20 years of efforts with the industry.”
However, those are efforts that at least at first glance look like they might not be far-reaching. For example, reports indicate that Google already has licensing deals for News Showcase signed in Germany, Brazil, Argentina, Canada, the United Kingdom and Australia — but not in the United States. Nor has the firm given nor any official word on when it might launch News Showcase with U.S. publishers.
Moreover, CNN reported that Google has already hit some serious stumbling blocks as it tried to get off the ground in Australia. The firm is clashing with regulators there over legislation that would give publishers greater power to demand compensation for their content. Australia started off leading the pack among nations where Google was signing up publishers, but has since fallen off as the regulatory scuffle has pressed the pause button on the project.
“Although our concerns about the [Australian law] are serious, we believe they can be resolved and hope to bring News Showcase to Australia soon,” Mel Silva, managing director of Google Australia and New Zealand, told CNN. “We believe the program will help publishers grow their audience and contribute towards the overall sustainability of our Australian news partners.”
It seems like Google is invested in the project for the long term — and looking to go the distance even where it encounters some headwinds. For instance, Google CEO Sundar Pinchai noted in on Google's blog that the plan is to expand its investment in the program “beyond the initial three years” now planned. He wrote that the broad vision is to make the news business sustainable in an increasing digitized future.
“The business model for newspapers — based on ads and subscription revenue — has been evolving for more than a century as audiences have turned to other sources for news, including radio, television and later, the proliferation of cable television and satellite radio,” Pichai wrote. “The internet has been the latest shift, and it certainly won’t be the last. Alongside other companies, governments and civic societies, we want to play our part by helping journalism in the 21st century not just survive, but thrive.”
How does that thriving work? How much money are publishers actually going to make? That remains a bit hazy. Google’s Bender only noted to CNN that compensation will vary based on what content publishers provide and how much of it they have to offer. What the relevant metrics are in those categories or what monetary value Google will assign to them remain question marks.
So do the answers to questions about how well the initiative will work for Google given that the market to be a revenue-generating platform for news content is becoming increasingly crowded. Aside from Apple’s competing new platform, Facebook has also been beefing up its news bona fides by striking licensing deals with The New York Times, Dow Jones and other news outlets last year in support of its Facebook News platform.
Meanwhile, a news platform that’s attractive to both publisher and content consumers can be tricky to build. For instance, Apple News+ — the premium-subscription version of Apple News — has struggled to sign on users since a big initial spike at its launch more than a year ago.
At the same time, publishers have complained that the product just hasn’t provided the revenue flow they were anticipating. Will Apple News+ do better now that it has been built into some of the new service bundles that Apple is planning to offer consumers though its new Apple One program? That remains to be seen.
Google thus far isn’t offering a similar subscription service, so it won’t have the same problems acquiring paying customers. But how much it’ll pay publishers and when there will be U.S. players in the mix remain big unknowns as Google gears up to throw its hat into the news aggregation ring.