A study commissioned by the National Association of Broadcasters concludes that broadcasters lose close to $2 billion per year in value their content, in particular local news, generates for Google and Facebook because those tech platforms do not fairly compensate them, and that the government needs to step in.
The study was released the same day some newspaper execs were meeting with legislators to push legislation that would provide for an antitrust exemption to allow print and broadcast content providers to team up to negotiate with Big Tech for rights to their content.
It also comes the week that NAB is holding its State Leadership Conference, when local broadcasters advocate on the Hill for key issues, in this case with a big focus on the power of Big Tech and its adverse affect on qualify journalism, a drum NAB has been banging more loudly during the pandemic, which has done a number on broadcasters numbers.
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The NAB study, “Economic Impact of Big Tech Platforms on the Viability of Local Broadcast News,” produced by BIA Advisory Services, blamed the market power of the two tech giants for shorting broadcast content by $1.873 billion, money broadcasters could definitely use as they wage a competitive battle for the hearts, minds and eyeballs for video fans increasingly turning to over-the-top.
It itemized the losses from Google and Facebook alone:
o "Facebook News Feed lost value: $455 million with a range of between $325 million to $585 million.
o "Google Search – zero click lost value: $1,289 million with a range of between $921.1 million [and] $1,658 million.
o "Google Search – improper local news algorithm weighting: $128.6 million with a range of between $91.9 million [and] $183.8 million.
It pointed to broadcast news often being included in searches alongside questionable sources and disinformation, which tarnishes broadcasters and confuses users, BIA said.
While the study focused on Google and Facebook, it extrapolated the issue to conclude that no tech platform, Apple and Amazon were cited, pays broadcasters a fair price for their work and that algorithms "do not properly weigh local broadcast news, which intentionally and unfairly undervalues broadcast content in search queries....There is no viable revenue model from the technology platforms that pays or enables broadcasters to earn equitable revenue."
BIA said the impact from Apple and Amazon are not as dire, but given their market power, the potential is there for future harms.
“The growth of these platforms presents the potential for substantial future harm to the industry if not constrained by government action," said Rick Ducey, managing director of BIA Advisory Services.
NAB agrees. "[T]his study makes clear that the competitive advantage of a handful of big tech platforms prevents broadcasters from recouping their substantial investment in local news, putting local journalism at risk," said NAB president Gordon Smith. "Preserving quality, trusted journalism in communities will require policies that ensure broadcasters are fairly and justly compensated for their valuable content.”
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