As Facebook weathers a storm of criticism over its handling of news and politics, one of the world's biggest media titans argued Monday that the social network could restore people's faith in the platform by taking a lesson or two from the cable industry.
Rupert Murdoch — the Fox News founder and executive chairman of News Corp, which owns the Wall Street Journal — said that Facebook should support credible news organizations by paying them for their content. Modern tech companies have “popularized scurrilous news sources” by spreading fake news and misinformation, he argued.
Murdoch’s salvo comes days after Facebook said it would reduce the amount of news it serves its users and would weight media organizations based on how much users say they trust them.
The change at Facebook is aimed at restoring a focus on human relationships, but it has also drawn attention to the sometimes prickly economic relationship between publishers and the social media company.
“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. “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.”
Under Murdoch's proposal, Facebook would pay news outlets a “minor” fee in exchange for displaying their articles on the site. The social network declined to comment.
Beyond publishers receiving money for their content, it isn't clear how Murdoch envisions his cable analogy playing out on the Internet. News Corp didn't immediately respond to a request for comment. But some longtime cable analysts said the unintended consequences could be enormous.
In today's cable industry, consumers pay providers for a monthly bundle of TV channels such as ESPN or CNN. Some of that money ends up in the local cable company's pockets, but much of it goes toward covering the cable company's own programming costs. ESPN in particular is among the costliest, charging cable companies more than $7 per subscriber per month.
While the system has worked for decades, it has resulted in rising bills for consumers as content firms seek to raise their prices year after year. And when programmers can't agree with cable companies on a price, it can lead to blackouts that prevent TV fans from watching their favorite shows. Customers of then-Time Warner Cable experienced precisely this problem in 2013, when a dispute between the content distributor and CBS led to a month-long blackout of shows like “Under the Dome.”
“Rupert Murdoch’s programming companies have derived BILLIONS from consumers for cable subscriber fees,” wrote Matthew Polka, president of the American Cable Association, in an email. “So I guess it’s no wonder he would look at revenue from Facebook as another similar revenue stream.”
Charging Facebook for, say, News Corp content could elicit one of two responses from the social media company, analysts said. Either Facebook could refuse to pay and drop Murdoch's content from its platform — hurting a news outlet that depends far more on Facebook for traffic than the other way around — or Facebook could seek to pass along those content costs.
Either way, it probably would be harmful to the Internet as an open platform, said John Bergmayer, a tech-policy lawyer at the consumer advocacy group Public Knowledge.
“The idea that you have to pay a site to link to it undermines the entire purpose of the Web, and calling linking 'carriage' is either disingenuous or ignorant,” said Bergmayer. “If you don’t want to be linked to, don’t put stuff online, or put it behind a paywall.”
The Wall Street Journal is known, among other things, for being one of the few news outlets to have embraced a paywall in the early days of online news consumption, helping to insulate the publication from some of the more painful shifts that affected its competitors in later years. News Corp also took on Google last year when the publisher stopped allowing the tech company to give search users free access to paywalled articles; the policy, known as “first click free,” had discouraged readers from buying subscriptions, News Corp had argued. News Corp nevertheless ended fiscal year 2016 with a 7 percent decline in news revenue.
This is not the first time news publishers have proposed charging tech companies for access to their content. In 2014, German publishers demanded that Google pay for listing small portions of their content in Google News search results. Google declined, instead delisting some publishers and causing referral traffic to plummet by double-digit percentages.
A similar experiment in Spain involved legislation that required publishers to charge Google for posting snippets of content on Google News. It was unclear how much Google was expected to pay, but the debate was soon mooted as the search giant announced it was shutting down Google News entirely in Spain.
Critics said the Spanish law actually cost the news industry roughly $10 million, rather than helping it flourish.
The punishing results highlight the immense influence that firms such as Google and Facebook enjoy over public discourse — and the potential pitfalls of Murdoch's proposal.
Still, the European Union has weighed the idea of a continent-wide version of the Spanish rule, as well as a proposal that would give publishers the power to sue tech companies for using their content without permission.