Spain is introducing a new intellectual property law that allows Spanish publications to charge aggregators for using their content. If a newspaper publishes a story, they can place a price on it. An aggregator, like Google News, can decide whether to carry the story.
Google’s response to this new law is to shut down Google News in Spain. This is the ultimate chilling effect a law can have on a market. Ideally, the law would create a market for news. Aggregators can shop around for stories, carry all the free content, plus some budgeted “paywall” content for balance. As the market matures, publishers will learn what prices bring them revenue without pricing them out of the market.
Given the uncertainty of an emerging market, Google took their ball and went home. This is an understandable position.
Here’s the Google blog post announcing the closure.
This is an experiment with big implications. The news business is slipping from one side of the curve (high integrity, low revenue) to the other (page-view driven, revenue required). If the content producers and the aggregators can find some middle ground where the content creators can bring in enough money to keep the lights on, we might still be able to salvage the news-driven (as opposed to page-view driven) news business.
The paywall version (served up by ft.com and wsj.com, for example) asks the consumers to pay for their news. The aggregator tax (Spain’s experiment) spreads the payment for news across aggregators, who will either absorb the cost (perhaps offset by advertising) or pass it along to consumers in the same way. An interesting experiment, but one that will play out without one of the biggest aggregators in the business, Google News.
Too bad, google. Pay up. You have no skin in the game. Reporters, editors, and publishers don’t work for free.
This law should apply everywhere.
The solution is Bitcoin, which enables micropayments for online content. People can instantly pay 1 cent for every article they want to read. Solves all the problems that the news business is now facing.
I’d be all for an al la carte, pay-per-article model, sans ads. I currently pay $420/yr for a NY Times subscription and more and more I’m just not reading their articles. This is partly because of mediocre writing, but also partly because they sidestep issues I deem as important.
This may drive better writing overall, but I imagine it would also drive more sensationalistic articles as well.
“An interesting experiment, but one that will play out without one of the biggest aggregators in the business, Google News.”
I’m not sure that wasn’t one of the Spanish government’s intentions. If you’re going to conduct an experiment, why let the 8000 lb Gorilla in every room pull a ‘King Kong’?
Google says news used to be low revenue. That is horse hockey. It used to be like having a license to print money.
As the world changes, and news organizations try to find new ways of paying to stay in business, it doesn’t help for Google and others to rip off their news and prevent them making money to stay in business.
This generation’s desire to get everything free is going to bite them in the end.
I’m not sure I understand how Google News hurts news publishers. Does it not help me find news articles which I then need to click thru to read on the publishers website? Websites which I might night visit otherwise. Or do news publishers reject all kinds of sharing and prefer a walled garden approach whereby only those who pay a subscription get to see what is on offer inside.
Why should Google have to pay when they help drive traffic to these sites? And Google does have advertising on Google News, so Google shouldn’t have to subsidice a business just because it is dying.
Okay, but why should one of the companies helping news organizations get tons of traffic be the ones to pay? Should Google and other tech companies be forced to support a business just because it is dying?
You have a point. If they are driving traffic to the news site, that shouldn’t require payment. I was thinking aggregator was where they post the content from the other websites on their own website. That is obviously not what Google is doing.
Just going to drop this here for you Terry: https://www.techdirt.com/articles/20141105/09593129055/germanys-top-publisher-admits-its-web-traffic-plummeted-without-google-wants-politicians-to-take-action.shtml.
They tried this in Germany and the publishers who whined so hard about Google stealing traffic came back begging.