News Corp. CEO Slams Facebook, Google for Not Sharing Enough Ad Revenue
News Corp. CEO Slams Facebook, Google for Not Sharing
Enough Ad Revenue
‘Too many publishers have been patsies,’ Robert Thomson
says
BuzzFeed CEO agrees that Facebook should share more ad
revenue
By Gerry Smith March 1, 2018, 4:00 AM PST
He’s derided them as “bot-infested badlands,”
“dysfunctional and sometimes dystopian,” and platforms for “the fake, the faux
and the fallacious.” On a recent earnings call, he called them “mephitic,”
prompting his spokesman to tweet the definition: “foul smelling.”
No media executive has more tirelessly criticized Google
and Facebook -- and done so with such a colorful vocabulary -- than News Corp.
Chief Executive Officer Robert Thomson. A top lieutenant of the billionaire
media mogul Rupert Murdoch, Thomson uses alliterative attacks as part of a
decade-long crusade to pressure Silicon Valley for a greater share of its
advertising revenue.
Now, Thomson, 56, is taking his campaign against Facebook
a step further: He wants the social media giant to pay publishers for their
content, the same way a cable TV company pays Walt Disney Co. to carry ESPN.
Once a lonely gadfly poking at tech giants like a modern Don Quixote, Thomson
is now finding that other media executives publicly back his quest.
At a Recode conference last month, BuzzFeed co-founder
Jonah Peretti agreed that Facebook should share more revenue generated by its
News Feed with media outlets. On a recent earnings call, New York Times Co. CEO
Mark Thompson expressed optimism that demand for quality news has created “the
possibility of direct payment from distributors.” Martin Sorrell, CEO of
advertising giant WPP Plc, said in January that he supported such a proposal.
“Too many publishers have been patsies,” Thomson said in
an interview from News Corp.’s headquarters in midtown Manhattan, where he
oversees the Wall Street Journal, Dow Jones & Co. and the New York Post.
“What you are seeing, at last, is more publishers are prepared to be more vocal
and that eerie collective silence has been broken.”
Former TV journalist Campbell Brown, head of Facebook’s
news partnerships, was noncommittal when asked about whether the company would
cut more checks to media outlets. “I would never say never to anything,” Brown
said at the Recode conference.
A Facebook Inc. spokeswoman declined to comment, as did
Google.
Media executives may view this moment as their chance to
negotiate more favorable terms with Facebook, which is under fire for allowing
Russians to spread fake news and meddle in the 2016 presidential election. But
they also probably feel a sense of urgency. Facebook and Google account for
about three-quarters of U.S. online advertising, leaving fewer dollars for
publishers. A significant share comes from selling advertising against news
articles served up by web searches or that users post in their news feed.
Facebook’s recent change to its news algorithm is
expected to shrink many of their audiences. Last month, Vox Media, owner of
websites like SB Nation and the Verge, fired 50 employees in response to
Facebook de-emphasizing content from media companies.
Facebook has taken steps to help media outlets boost
their subscriptions. It also has paid them to experiment with new initiatives
like live video and let them keep all of the revenue if they sell ads around
articles that are published directly on Facebook. But in a statement in
January, Murdoch said that wasn’t enough and that Facebook should pay “trusted”
media outlets a fee for all of their content.
No Difference
Thomson said he sees no difference between Facebook
acquiring the rights to stream professional surfing, as it did in January, and
licensing the rights to quality journalism.
“They would have rights to publish, to share,” Thomson
said. “We’d work with them so the experience is the best it can possibly be for
Facebook users.”
News Corp. has made similar noise before. In 2009,
Murdoch suggested he might remove his newspapers’ articles from Google’s search
results if the tech company didn’t pay him. Google never did, and Murdoch
focused on creating paywalls for his newspapers instead.
Murdoch split the original News Corp. in two in June
2013, giving 21st Century Fox Inc. the more lucrative entertainment assets and
leaving the current News Corp. with his print properties, which also include
the book publisher HarperCollins, an online real estate business and newspapers
in the U.K. and Australia. Bloomberg LP, the parent of Bloomberg News, competes
with News Corp. in providing financial news and services.
Thomson said News Corp. hasn’t decided what it will do if
Facebook ignores its latest proposal, or how it could withhold its articles
when Facebook users could share them on their own. The idea was meant to start
a conversation, he said.
Down Under
Born in the small rural town of Torrumbarry, Australia,
Thomson spent about two decades as an editor at the Wall Street Journal, the
Times of London and the Financial Times. He raised concern about the rise of
fake news as far back as 2007, during testimony before Britain’s House of
Lords. In 2013, he assumed the role of CEO of News Corp. A New Yorker profile
of Thomson in 2011 said that “he is perhaps Murdoch’s only close friend.”
Thomson said he doesn’t use a thesaurus to craft his
alliterations. He says he honed his skills during years as an editor writing
headlines, which he says must be “compelling and concise.”
He once called companies that aggregate content without
paying for them “tech tapeworms in the intestines of the internet.” He has said
people who think everything should be free online are “Net Neanderthals.” He’s
also criticized questionable audiences in digital advertising, saying, “we’ve
sort of gone from the era of ‘Mad Men’ to mad metrics.”
“It’s not stand-up comedy,” said Thomson. “It’s trying to
get people’s attention in a world that’s very crowded and cacophonous.”
Other publishers credit him with nudging tech companies
for better business terms. David Chavern, president of the industry trade group
News Media Alliance, said Thomson was instrumental in persuading Google last
year to change its “First Click Free” policy that had led publishers with
strict online paywalls to appear lower in search results.
“What movement you see from the two tech platforms is due
in large part to his willingness to call them out and ask for a better deal,”
Chavern said.
Lobbying Efforts
While Thomson criticizes Facebook publicly, News Corp. is
pressing its case behind the scenes. In 2016, Thomson and Murdoch met with
Facebook co-founder Mark Zuckerberg at a conference in Sun Valley, Idaho, and
threatened to criticize the social network more publicly if it didn’t start
offering a better deal to the news industry, according to an article last month
in Wired magazine.
In the past two years, News Corp. has spent at least $1.1
million lobbying Congress on various issues, including “online platform
competition,” according to disclosure forms.
Thomson says U.S. regulators should study whether
Facebook and Google use their algorithms to disadvantage publishers and other
businesses. He has company: At a conference in Barcelona this week, CNN
President Jeff Zucker said regulators should pay closer attention to the power
of Google and Facebook.
Thomson also would like to see regulators scrutinize
another tech giant, Amazon.com Inc., for being both a major search platform and
a dominant seller of audio books, calling it “a serious issue for regulators.”
Amazon declined to comment.
“It’s fair to say I have algorithm angst,” Thomson said.
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