NY Times Publishes Laughable Propaganda To Argue Google Owes Newspapers Like Itself Free Money

Earlier this week, I posted about a silly new organization that claims it's going to "save journalism" mainly by whining about how evil Google and Facebook are. As I noted in that piece, even if you believe Google and Facebook are evil, it's not clear how whining about them being evil provides any new journalists jobs. But the news industry as a whole has been on this weird "blame someone else" kick for way too long. The "News Media Alliance" (formerly the Newspaper Association of America) has been on a weird anti-tech protectionist kick for years now, and on Monday published a "study" claiming that Google made $4.7 billion from news -- a number that was then trumpeted loudly by the NY Times, which just happens to be one of the larger members of the News Media Alliance.

There's just one tiny problem. The "study" is no study at all and basically everyone in the media business is laughing at the NY Times for publishing such a ridiculously bogus study without highlighting how bogus it was. The $4.7 billion is not based on any careful research. It's based on one off-hand comment from over a decade ago by an exec who hasn't been at Google in years, and then extrapolated forward. Really.

That study relies on a public comment then-Google executive Marissa Mayer made at a media event in 2008, when she estimated that Google News brought in $100 million in revenue. The NMA report calculates what the same proportion of the company's revenue would be today, then further inflates this figure based on the fact that news consumption via Google's main search is 6 times larger than via Google News (according to the NMA's estimate of referral traffic to newspaper websites).

This is not what any sensible person would call a "sound" methodology. Oh, and I almost forgot the kicker:

...the News Media Alliance cautioned that its estimate for Google's income was conservative

The NY Times also kinda skimmed over the purposeful timing of this study's release. The News Media Alliance has been pushing for sometime for a special antitrust exemption to allow big news orgs to collude to try to force more money out of Google and Facebook, and the study was released just a day before a Congressional hearing on the topic. Most normal reporters would recognize that, maybe (just maybe) there was an ulterior motive in releasing this "report" with such a flimsy statistic. But the Times reported it as if it was fact.

There may be plenty of reasons to distrust Google and Facebook and their role regarding journalism, but this report is not any of that. Google doesn't even put ads on most of Google News, but instead pushes visitors off to the websites of news orgs. If those news orgs are failing to monetize that traffic, it seems pretty ridiculous to blame google for that and demand more money via collusive efforts.

As Jeff Jarvis notes in his own response to the NYT's piece, if the publishers want to point the blame finger, they might want to start by turning it back on themselves:

The problem has long been that publishers aren't competent at exploiting the full value of these clicks by creating meaningful and valuable ongoing relationships with the people sent their way. So what does Google do? It tries to help publishers by, for example, starting a subscription service that drives more readers to easily subscribe"-"and join and contribute"-"to news sites directly from Google pages. The NMA study cites that subscription service as an example of Google emphasizing news and by implication exploiting publishers. It is the opposite. Google started the subscription service because publishers begged for it"-"I was in the room when they did"-"and Google listened. The same goes for most every product change the study lists in which Google emphasizes news more. That helps publishers. The study then uses ridiculously limited data (including, crucially, an offhand and often disputed remark 10 years ago by a then-exec at Google about the conceptual value of news) to make leaps over logic to argue that news is important on its services and thus Google owes news publishers a cut of its revenue (which Google gains by offering publishers' former customers, advertisers, a better deal; it's called competition). By this logic, Instagram should be buying cat food for every kitty in the land and Reddit owes a fortune to conspiracy theorists.

The real problem here is news publishers' dogged refusal to understand how the internet has changed their world, throwing the paradigm they understood into the grinder.

Yes, the world has changed. But the NMA seems to think that the government should now just force the internet companies to hand over money after their own members spent years twiddling their thumbs and squandering any attempt to build up loyal followings and sustainable business models. It's not easy to keep a media business sustainable these days, but so much of it has to do with those companies refusing to recognize how the internet was changing the business, and how to take advantage of those changes.