News Corp’s chief executive believes the journalism industry is “about to get a second wind” as publishers begin to strike new cash-for-content deals with technology giants.
Robert Thomson, a former journalist who has been the company’s CEO since 2013, also claimed News Corp’s Google deal will benefit other publishers.
He said “the terms of trade for content are changing fundamentally” and revealed that News Corp is “haggling” over UK and Australian deals with Facebook.
“It isn’t just about News Corp,” said Thomson. “It’s also about providing some negotiating leverage for smaller publishers. Because you don’t change the landscape with a single deal for a single company.”
News Corp’s deal with Google – the financial terms of which remain secret – has drawn some industry criticism, most notably from DMGT executive chairman Lord Rothermere.
In a letter to the Financial Times last week, Rothermere said: “News Corp, owner of The Times, has announced it has won ‘significant payments’ and ‘the sharing of ad revenue via Google’s ad technology services’.
“What does it give in return? Will it continue to fight for fair terms of business for all publishers, or are two of the world’s most ruthless companies now locked in an unholy alliance, giving rise to unfair competition unless its terms are made public?”
But speaking at a Morgan Stanley virtual conference on Thursday, Thomson said: “It’s important for us. Without being too pompous about it, it’s important for society.
“Don’t forget, in the past decade about 40% of professional journalists in the US have lost their job. Journalism has to be sustainable for society to be healthy. I think the reassuring point I would make… is that the fourth estate is about to get a second wind.”
Thomson added: “The terms of trade for content are changing fundamentally. And without being too Churchillian about it, it’s just the end of the beginning.”
As part of News Corp’s Google deal, the Wall Street Journal, Barron’s MarketWatch, New York Post, Times, Sunday Times, Sun and Australian news outlets including Sky News will join the Google News Showcase.
The three-year agreement will see the companies develop a subscription platform, share marketing revenues via Google’s ad technology services, and work on audio and video journalism projects together.
Thomson did not specify the details of News Corp’s Facebook “haggling” in the UK and Australia. The social media giant launched Facebook News – which pays publishers for their content – in the UK in January without the Sun and Times titles on board. The News Corp-owned Wall Street Journal is a Facebook News partner in the US.
Google and Facebook have both pledged to spend $1bn buying content from publishers, via Facebook News and the Google News Showcase, over the next three years.
How Andrew Hughes, of the global Press Database and Licensing Network, has said the pair should be paying at least six times this figure under the principle that publishers should get 10% of “relevant turnover”.
Google made $104bn from search advertising last year, and news publishes in the US have estimated that 10% of search traffic goes to news.
Some argue that Google should pay even more, because news is among the most valuable content to its users.
Photo credit: Jonathan Ernst/ Reuters