Opinion: Local journalists should benefit when companies use their work

When a Davenport apartment building collapsed on May 28, local journalists from the Quad-City Times were some of the first people on the scene. Since then, they’ve helped hold those in power accountable with dogged reporting on everything from proposed demolition plans while residents were still believed to be inside, to questioning city officials about why the most recent inspection status online changed from pass to fail in the days after the collapse.

Put simply, local journalism matters.

So what happens if there’s no local news left to investigate the next building collapse or other disaster?

We all know the answer: the powerful are left unaccountable and the rest of us are left worse off for it.

According to the Pew Research Center, newspaper newsroom employment of publishers like the Quad-City Times plummeted 57% between 2008 and 2020.

To put that in perspective, if we saw a 57% drop in Iowa’s population using 2020 census numbers, it would be the equivalent of wiping every city and town smaller than Burlington, with its population of 23,931, off the map.

The conventional wisdom argues the reason for this precipitous drop is because newspapers and other media organizations were slow to transition to the internet economy, most especially digital advertising. They dragged their feet and got outcompeted, leading to declining revenue, and required cuts in staff.

I used to believe this oft-repeated and easy-to-understand tale, too. So imagine my surprise when I learned that what I believed to be true, wasn’t. Or at least it wasn’t fully true.

So why do local news organizations continue to struggle?

It turns out abuse of monopoly power is a huge part of it.

Giant corporations like Facebook and Google are bleeding local news publishers dry because they’re able to use their market size to prevent the little guys from making a profit.

To understand how this works, think of what happens when news breaks. Do you find out about it on Facebook or maybe Google it to find out more?

For example, when I Google “why did the davenport building collapse” as of writing this article, my search results include something Google calls “featured snippets.” These paragraphs essentially take the content of publishers and host it directly on Google. As a user, I never have to leave Google to find out answers to questions about why the building collapsed or who owned the building. This decreases the amount of traffic, and therefore ad revenue, that publishers receive.

Google may argue this kind of business practice is for the user’s benefit because they’ve brought the information to me in a faster and easier way, without having to click through to multiple different news stories. While technically true, it also means that publishers are never compensated by Google for their work when this happens.

At the same time, Google profits off the reporting they didn’t invest in by selling their own ads on Google Search, which is also where they’re trying to keep users from navigating away from.

When it comes to Facebook, we all know how much effort is spent in trying to keep us from ever leaving their platform.

At this point, you may be thinking that perhaps the solution is to click more links so publishers receive more traffic, which means the ability to sell more ads. While well-intentioned in theory, that won’t work either in practice.

Researcher Dina Srinivasan notes in the Stanford Technology Law Review that, “Today, a single company, Google, simultaneously operates the leading exchange and the leading middlemen (i.e., intermediaries) that publishers and advertisers must use to trade.”

Imagine I’m the owner of one of my favorite meal spots, Tasty Tacos. I want to promote my weekly dinner special with ads on the Des Moines Register’s website.

To do this, I would likely use a buy-side tool, such as Google Ads (formerly known as Google AdWords), because a tool like this is how I “place my order” with something called an ad exchange for a “share” of online ad inventory available on DesMoinesRegister.com. This is like how someone might use the buy-side tools of Vanguard or E*Trade to place their order for a share of a company’s stock on the stock exchange.

Now, if I’m the publisher of the Register, I also likely use Google’s products. But in this case I’m using what’s called an “ad server,” such as Google Ad Manager (formerly known as Google DoubleClick for Publishers), because that ad server is what allows me to connect my site’s ad inventory with the exchanges where ads are being bought and sold.

Finally, the exchanges where ads are bought and sold themselves lie in between the buy-side tools like Google Ads and the sell-side ad servers like Google Ad Manager. Because Google also controls the leading ad exchange, this means it can engage in monopolistic practices like imposing opaque private taxes on digital advertising at every step of the process: buy, sell, and exchange.

Srinivasan has remarked the whole situation is, “as if Goldman Sachs owns the New York Stock Exchange”.

With that context, it’s no surprise Big Tech monopolies are gobbling up to 70 cents out of every dollar generated in digital ad revenue, according to the News Media Alliance. That only leaves a whopping 30 cents for local news publishers like the Quad-City Times or the Des Moines Register to invest back into efforts like investigative journalism.

With the deck stacked like this against publishers, the hollowing out of local news across Iowa and the country starts to make more sense.

Fortunately, there’s a potential solution. U.S. Senators John Kennedy, a Louisiana Republican, and Amy Klobuchar, a Minnesota Democrat, recently re-introduced the Journalism Competition and Preservation Act. Last year, the bill made it out of the Senate Judiciary Committee in a bipartisan vote before stalling in the face of major lobbying efforts against it.

The Big Tech monopolies hate this bill and have spent ungodly sums of money opposing it, which is a pretty good indicator that it might be worth supporting.

The bill would help resurrect local news. It starts to level the playing field by doing things like allowing small and local news publishers to band together in a cooperative fashion and collectively bargain with giant corporations like Facebook and Google.

Australia passed a similar law in 2021, and as of August 2022 it led to more than $140 million in new funding for news publishers there, according to Poynter. One outlet alone expanded their newsroom with the addition of 50 journalists.

It’s no doubt helpful that Big Tech platforms make information easier than ever for us to find, but as things stand, these same platforms benefit from the work being done by local publishers to produce the news without paying their fair share of the costs for that work.

The Journalism Competition and Preservation Act is a bipartisan fix to this problem that should be brought up for a vote and passed. And if the U.S. Congress refuses to act, then Iowa lawmakers of both parties should add a state version of the bill to their priority list for the 2024 legislative session.

Scott Syroka is a former Johnston City Council member and a former Google employee.

This article originally appeared on Des Moines Register: Opinion: Local journalists should benefit when their work is used