“If Facebook wants to recognize 'trusted' publishers, then it should pay those publishers a carriage fee similar to the model adopted by cable companies,” Murdoch said in a statement on Monday. “The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook's profits but a major impact on the prospects for publishers and journalists.”
Amen, said News Media Alliance President David Chavern, when I asked him about Murdoch's proposal.
Chavern, whose trade group represents about 2,000 media outlets, including The Washington Post, said the news business “very much needs a digital ecosystem that provides a viable economic return to news publishers, and we simply don't have that today. A carriage fee would be one clear way to bring more economic balance to the system. Quality journalism is critical to our civil society, and Google and Facebook have a responsibility to make sure that their dominant platforms help to ensure that it has a future.”
A responsibility, perhaps, but what about leverage? Do media companies have enough to make Facebook pay up? This is business, after all.
“Well, it doesn't hurt to ask,” said Rick Edmonds, media business analyst at the Poynter Institute. “Murdoch is right — Facebook could well afford this. I'm not wildly optimistic, though.”
Edmonds noted that Murdoch, owner of the Wall Street Journal, Fox News and the New York Post, has complained in the past to no avail about Google's aggregation of news content.
“We are going to stop people like Google or Microsoft or whoever from taking stories for nothing,” Murdoch said at a National Press Club event in 2010.
The mission has not been accomplished.
The weakness in Murdoch's stance is that news outlets benefit from the web traffic that flows through Google and Facebook. The Washington Post's Brian Fung pointed out Tuesday that previous attempts to squeeze money out of Google, in Germany and Spain, have backfired. Instead of opening its wallet, Google fought back by kicking publishers out of its search engine.
Facebook could do the same, refusing to link to news outlets that demand payment. That's an ominous threat, since Facebook remains a major traffic driver to many websites, even as it refocuses on content posted by users' family and friends.
Guy Rolnik, a media entrepreneur who teaches in the business school at the University of Chicago, warned that securing payments from Facebook — even if possible — could come with a downside for the media industry.
“While I think that we need to find ways to address the excessive market power of Facebook, I don't think that forcing the company to pay specific media outlets is the way to go,” said Rolnik, who founded TheMarker, a business-focused newspaper in Israel. “Forcing Facebook to pay specific news outlets for using their content will distort markets [and] entrench incumbent, large news organizations.”
Facebook might agree to pay for content from Murdoch's big brands, but it might elect to exclude local newspapers and media start-ups from the platform, rather than shell out for material that doesn't add much value to Facebook.
In such a scenario, it is unclear whether carriage fees from Facebook would do more to help or hurt the press.