Rupert Murdoch Calls On Tech Giants To Pay Cable-Style Carriage Fees To “Trusted” News Providers

Rupert Murdoch Calls On Tech Giants To Pay Cable-Style Carriage Fees To “Trusted” News Providers

by Dade Hayes and Dawn C. Chmielewski January 22, 2018 12:15pm

In a forceful statement, Rupert Murdoch has called on digital behemoths like Facebook and Google to pay cable TV-style carriage fees to legitimate news content providers such as News Corp., where he is executive chairman.

“Facebook and Google have popularized scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable,” his statement reads. “Recognition of a problem is one step on the pathway to cure, but the remedial measures that both companies have so far proposed are inadequate, commercially, socially and journalistically.”

Murdoch referenced Facebook’s announcement, just days ago, that it planned to prioritize high-quality news on the social network by allowing users to rank news sources that they see as credible and trustworthy. Chief Executive Mark Zuckerberg wrote that at a time of “sensationalism, misinformation and polarization” Facebook elected to have its community determine which should be trusted.

“There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism,” Murdoch wrote. “We will closely follow the latest shift in Facebook’s strategy, and I have no doubt that Mark Zuckerberg is a sincere person, but there is still a serious lack of transparency that should concern publishers and those wary of political bias at these powerful platforms.”

Murdoch — who has been a frequent critic of the increasingly powerful technology platforms — appears to be seizing on popular sentiment among some in Congress, and political activists, that Facebook and Google face greater scrutiny about their influence over the outcome of the 2016 election by serving as a platform for fake news and propaganda.

“I imagine [Murdoch] thinks now’s the time, because Zuckerberg has been retreating of late,” said Forrester analyst James McQuivey. “Murdoch may be in a position – maybe, just maybe, we’ll convince him to have second thoughts about what he’s doing about the publishing ecosystem.”

Harsh economic realities are also at work. Newspaper analyst Ken Doctor said declines in print advertising last year were far worse than in 2016, resulting in another brutal round of newsroom layoffs.

“The idea that Google and Facebook have caused a lot of damage through digital disruption on the core funding of the news industry across us and Europe is not a new idea,” said Doctor. “It’s collateral damage. They did not set out to destroy the news industry …  But the fact is, the cratering of the news industry in North America and Europe is still continuing.”

Doctor said Murdoch is advocating the position that Facebook and Google, which collectively reaped $30 billion in profits, sound assist an industry that they inadvertently helped destroy.

“The time has come to consider a different route. 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 wrote. “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. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.”

Perhaps it’s not coincidental that Murdoch is taking his stand as Facebook announced a revamp of its News Feed to emphasize personal material over third-party news content. Many observers have warned will disadvantage legitimate news publishers, many of which have come to rely on the amplification Facebook provides.

Last month, ahead of the News Feed changes, the company announced it had developed tools to help users determine whether they were following Russian bots spreading phony posts.


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