Google is implementing a new licensing program that will enable it to pay news media outlets for their contents. The program will take more than $1 billion over the next three years.
The Silicon Valley giant has signed licensing deals with about 200 publications in select countries with plans to add more and expand geographically.
The program is part of Google’s attempt to address the challenge of poor revenue generation hitting news organizations, especially in the COVID-19 era. The crippling impact the pandemic unleashed on the global economy, forced news organizations to take drastic measures, including downsizing, to stay in business.
“A vibrant news industry matters – perhaps now more than ever, as people look for information they can count on in the midst of global pandemic and growing concerns about racial injustice around the world. But these events are happening at a time when the news industry is also being challenged financially. We care deeply about providing access to information and supporting the publishers who report on these important topics,” Google said in a blog post.
Google and Facebook lead the web ad revenue generation table by miles, a feat they achieved serving contents from news media outlets among others. The News Media Alliance said in 2019 that Google made $4.7 billion off the news industry in 2018.
To compensate news outlets for the gains, countries like Australia and France started making a case for publishers to get paid for their contents. The subject has long been debated between governments, publishers and Google.
When France made the rules requiring publishers to be paid for snippets of news stories displayed in search results in 2019, Google said it would be displaying only headlines. CNN reported how earlier in April, the French competition authority ruled that removing the snippet amounts to abuse of Google’s market dominance, and ordered the search giant to negotiate with French publishers.
In Australia, Google has been in tussle with the government as it resists the call for search and social media platforms to pay publishers for their contents.
It is against this backdrop that Google announced in June; the new licensing deal that will see some select publishers around the world get paid first, in what seems like a pilot phase of the program.
“Today, we are announcing a licensing program to pay publishers for high-quality content for a new news experience. This program will help participating publishers monetize their content through an enhanced storytelling experience that lets people go deeper into more complex stories, stay informed and be exposed to a world of different issues and interests,” Brad Bender, Google’s VP Product Management for News said.
The program will take off first in Australia, Brazil and Germany. Part of the deal involves removing paywalls from news sites to make monetized articles free for non-subscribers.
The program named News Showcase, took effect on Thursday in Brazil and Germany. The app will be available in the Google News app on Android and subsequently, Apple store, and later expand to the Google’s discover app and Google search.
Bender told CNN that Google will extend the program beyond the three-year commitment and add more funds to the $1 billion. However, he did not say how Google intends to select participating countries and news organizations, or which countries and news outlets will be included in the next phase of the program.
He said publishers will be allowed in the future to include video and audio to News Showcase, not just text and images, as it will give them the opportunity to tell their stories the way they want.
“Depending on the story and how they want to tell it, participating publishers can pick the best template to showcase the best of journalism and tell stories the way they want to. This additional context for users not only helps users understand the story better, but also helps them get to know the publisher’s editorial voice and priorities,” he said.
The move is expected to tune down the prolonged controversy between the news media and Google, and subsequently create more revenue opportunities for publishers.