Tech companies are eating journalists’ lunch. Shouldn’t they at least pay for it?

21st-century media baron Jack Dorsey. Get Everwise, CC BY-SA

Journalism is in an existential crisis: revenue to news organisations has fallen off a cliff over the past two decades and no clear business model is emerging to sustain news in the digital era.

In the latest in our series on business models for the news media, Richard Jones asks whether tech companies that benefit from journalism should pay a levy to help sustain it.

Twitter was once described as the most significant innovation in journalism since the telephone. More than three quarters of journalists in the UK use it to gather stories, promote their own work and keep up with what’s going on.

But Twitter is in trouble. User growth slows every quarter, and is flat in the US. Squished between Facebook, Google and Apple, and under pressure to do more to tackle abuse, Twitter has lost some of its sparkle, not least to Facebook-owned Instagram and WhatsApp.

Now back at the helm of the company he co-founded, Jack Dorsey recently signalled that Twitter’s most famous feature – the 140-character limit – might soon be lifted.

Allowing publishers to post extended messages or even full articles could encourage users to spend longer on Twitter. This has seemed a likely move ever since Facebook introduced its own Instant Articles feature last year, cajoling news companies to put content there instead of on their own websites.

Instantly engaged. Plus31 Media, CC BY

Instant Articles may be a better experience for readers – they’re on Facebook anyway and don’t have to wait for an article laden with data-heavy adverts to load up from the open web. But for traditional publishers who have seen print dollars turn into digital dimes, the prospect of Facebook pennies is not exactly enticing – and from April Facebook will open Instant Articles up to all news publishers. Google and Apple now have fast-loading formats of their own.

News companies could be forgiven for finding this exasperating. For the best part of two centuries, newspapers could make handsome profits on a reliable mixture of cover price and advertising sales. Now, trying to focus on a viable business model is the constant challenge for news publishers – and one that tech companies are not necessarily helping with.

Sharing economy

Which is why some journalists think the tech giants should start giving the news companies a bit more love. And by love, I of course mean cash. Sharing news articles is a big part of what people do on Facebook, Twitter and the rest. So, if the makers of that news are struggling financially, isn’t it right that Silicon Valley shares some of its vast profits with them?

The growing power that Facebook in particular has is certainly quite something, with Ofcom reporting that almost a third of all Britons now use it for news. At one time, newspapers only had to worry about keeping the print unions onside to make sure their product got into the hands of readers. Now, a change to a line of code by an engineer at Facebook HQ can have a dramatic impact on how many users will ever see a link posted by a publisher in their news feeds. It’s a loss of control to which the news business is unsurprisingly battling to adapt.

Some commentators have called for a bail-out to help the legacy news companies. Maybe a levy on broadband to be distributed among the papers might be the thing, or even some kind of direct state subsidy as in France and the Nordic countries.

Declining values

But then, the counter-argument goes, just why should successful companies prop up less successful ones? Henry Ford wasn’t exactly rushing to share the profits from the Model T with the horse-and-carriage makers left in his slipstream.

Newspapers: a bit old hat these days? Kate Ter Haar, CC BY

While traditional publishers can rightly say they were caught out by the pace of change in modern media, many hastened their own problems through bad decisions. Just as @Jack was sending his first tweet, Johnston Press was paying £160m for The Scotsman and its sister titles. Just seven years later, Amazon founder Jeff Bezos splashed out the same amount for no less than The Washington Post, out of his own pocket.

No disrespect to the venerable Edinburgh institution, but it’s no longer worth the same as the paper of Woodward and Bernstein. The Scotsman even had to downsize offices, replaced in its old HQ by new media powerhouse Rockstar North, the makers of Grand Theft Auto and Red Dead Redemption.

Trying to predict the road to redemption for traditional news companies is a mug’s game. But working constructively with the tech giants while also throwing more spaghetti at the wall – membership and subscription models, micropayments, crowdfunding, better terms for ads around the distributed content hosted on other platforms – seems a better bet than simply getting a begging bowl out.

Just don’t ask me to put any money on it.