A BIA study commissioned by NAB estimates local broadcasters lose $1.9 billion annually when their news and other local content appears in Google Search and Facebook News Feeds without compensation.
Updated June 16, 2021: See related podcast.
Local news produced by broadcast stations continues to be the most trusted, highly consumed and valued information. It is also very costly to produce, and yet its consumption and the advertising dollars that support it are shifting to technology platforms where broadcasters cannot fully recoup their investment or earn the economic benefit they create for the platforms because of unequal bargaining power. This competitive imbalance puts a severe strain on the economics of local broadcasters and threatens their continued investment in local journalism.
BIA interviewed top executives at local radio and TV broadcast groups to dig into the potential economic impacts incurred from Google, Facebook, Apple and Amazon. While each of these major tech platforms impact broadcasters, uncompensated use of local news content by Google and Facebook generated the greatest concern among local broadcasters in today’s marketplace.
The issue of unlicensed, uncompensated use of local publisher content has become a global concern. Recently, Australian regulators took issue with both Google and Facebook along these same lines. As a result, as recently reported by the BBC, “Australia has passed a world-first law aimed at making Google and Facebook pay for news content on their platforms.” This law is being studied by other countries including the U.S., Europe and elsewhere.
In the U.S., the National Law Review reports that the Journalism Competition and Preservation Act of 2021, “is designed to give news media leverage to negotiate better financial terms with Google and Facebook…both of which publish headlines, snippets and thumbnail photographs of news articles and photographs from media outlets.”
BIA’s study of the tech platforms’ impact on local broadcasting concluded:
- No Technology Platform Currently Offers a Viable Economic Model for Broadcast News
- Algorithms Do Not Properly Weight Local Broadcast News Value
- Broadcast News Is Not Properly Identified
- Under the Guise of User Privacy, Google Gains Even More Market Power
Based on BIA’s economic models for the value that local broadcasters create for tech platform users, but are not able to monetize themselves, examining just Google Search and Facebook News Feed, we estimate a total annual loss of value equal to $1.873 billion. Facebook News Feed lost value: $455 million with a range of between $325 million to $585 million. Google Search – zero click lost value: $1,289 million with a range of between $921.1 million to $1,658 million. Google Search – improper local news algorithm weighting: $128.6 million with a range of between $91.9 million to $183.8 million.
The immediate impacts on local broadcasters from other platforms, namely Apple and Amazon, are not yet as dire, but the potential for future harm is likely as these platforms also have immense market power.