• by December 18, 2019

Sen. Rand Paul, (R-Kentucky), put his support behind a proposal to let news publishers negotiate collectively with digital platforms, like Facebook and Google, over their use of news content. While some publishers may see Paul's backing as commendable, it's still not clear whether the law would save many publishers from extinction.

The Journalism Competition and Preservation Act (JCPA) would give news organizations a four-year exemption from U.S. antitrust laws so they can bargain with digital platforms to create a revenue-sharing model. The News Media Alliance, which represents thousands of news publishers, praised Paul for supporting the bill.

The JPA was introduced in April as an antitrust scrutiny of tech giants, including Amazon, Apple, Facebook and Google, as they gained momentum in Washington. All four companies generate revenue from digital advertising.

Facebook and Google are almost entirely dependent on digital ad sales, while Amazon has a fast-growing business selling ads on its online marketplace and media platforms, which include Twitch, Amazon Music and IMDb TV. Apple sells ad space in its App Store, but most of the iPhone maker's services, such as Apple TV+ and Apple Music, rely on paid subscriptions and are ad-free.

Most of the digital ad market has become concentrated in the hands of Facebook and Google, but it's unclear how much money they make from news content. Google News doesn't have advertising; search results that point to publisher content only show a headline and a link to the publisher's site.

Facebook this year opened its checkbook to publishers, offering to pay them for content hosted in its Facebook News section.

And yet, more than half of U.S. adults say they get news from Facebook, which also owns Instagram, while 28% say they see news content on Google's YouTube, according to Pew Research Center. How are publishers missing out on this potential revenue bonanza?

Facebook and Google also have programmatic platforms that place ads on third-party sites, giving them a chance to skim some of that revenue, though it's unclear how much.

While I don't like the idea that a handful of tech companies control what billions of people see online and dominate the U.S. digital ad market, I'm skeptical the JCPA will help publishers boost their market share.

More research needs to be done to bolster the need for the bill, especially since no amount of legislation will bring back audiences that have gone elsewhere, along with ad dollars.

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