Google to pay publishers $1 billion over three years for news content

Google CEO

Google intends to pay $1 billion to publishers globally for their news over the next 3 years, its Chief Executive has said, a measure that could allow it to win over a powerful group amid spiralling regulatory scrutiny around the world.

News publishers have been in a long-running battle with the search engine for reimbursement for using their content, together with British, EU and Australian media groups leading the charge and claiming that Google takes and stores their content and then monetises it without paying the cost of production.

Chief Executive, Sundar Pichai said the new product called Google News Showcase will launch first in Germany, where it’s signed up German papers including Der Spiegel, Die Zeit, and in Brazil with Band and Infobae.

It’ll be rolled out in Belgium, India, the Netherlands and other countries. Approximately 200 publishers in Argentina, Australia, the UK, Brazil, Canada and Germany have so far signed up to the new product.

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“This financial commitment – our biggest to date – will pay publishers to create and curate high-quality content for a different kind of online news experience” Pichai said in a blog article.

Google parent Alphabet reported a net profit of some $34.3 billion on revenue of almost $162 billion last year, much of which came from search-related activities.

The item, allowing publishers to pick and present their stories, will start on Google News on Android devices and eventually on Apple apparatus.

German publisher the Spiegel Group welcomed the undertaking, with Stefan Ottilz, managing director of the group saying they are happy to be part of it from the start..

News Corp, which has advocated EU antitrust authorities to act contrary to Google, was equally enthused.

There are complex negotiations ahead but the principle and the precedent are now established,” its Chief Executive Robert Thomson said in a statement.

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The European Publishers Council (EPC), whose members include News UK, the Guardian, Pearson, the New York Times and Schibsted, however, was critical.

“By launching a product, they (Google) can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production,” explained EPC Executive Director Angela Mills Wade.

Google is negotiating with French publishers, among its most vocal critics, while Australia wants to induce it and Facebook to discuss advertising revenue with local media classes.

Google’s funds for information organisations has frustrated other online publishers, for example weather sites and recipe tools, which say Google has hurt their own revenue.

COMMENT: The core of this issue may not actually be the monetisation of content. It is the control on the marketplace that 2-3 platform businesses have over a long established (and somewhat dysfunctional) industry. Publishers have long been reliant upon the platform businesses not only for audience acquisition, but also for measuring and monetising it. It took more than a decade of dominance for the penny to drop within the major publishers.

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Many publishers however will take this latest (and potentially generous) offer from Google will glee. They are in many ways kicking the can down the road.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Foo Yun Chee. Additional reporting by Paresh Dave in San Francisco, Diane Bartz in Washingon DC and Klaus Lauer in Berlin. Editing by Barbara Lewis. Comment by Rob Phillips.

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