Tech giants reap £ 1bn a year from UK news media, says top academic

News content created by British publishers generates around £ 1billion in UK revenue for Google and Facebook every year, a leading academic has found.

Professor Matthew Elliott from Cambridge University said both US tech giants relied on journalism to keep users engaged, which was crucial to their business models.

Yet, despite helping the platforms to earn at least £ 16billion every year in the UK, the media organizations that created the content received ‘little, if any’ compensation.

Any profits generated as a result of investing publishers should go into creating first-rate journalism rather than Google and Facebook, Professor Elliott said.

‘The fact that high-quality news content generates wider benefits to society makes this problem acute,’ he added.

News content is extremely important for digital platforms because it keeps users engaged and provides valuable data for online advertising, according to a new study

News content is extremely important for digital platforms because it keeps users engaged and provides valuable data for online advertising, according to a new study

Paul Zwillenberg, chief executive of the Daily Mail and General Trust, said yesterday that the Daily Mail has invested a lot in journalism and ‘deserves to be fairly rewarded’.

Speaking at the Deloitte and Enders Media and Telecoms Conference 2022, he criticized the ‘unfair’ deal, telling the audience: ‘The value of journalism in the UK – for newspapers, both regional and national, magazines and broadcasters – is about £ 1billion. . ‘

Not only should the content for payment be fair, he said, but it was also ‘important that the rules of engagement are clear’.

‘What do I mean by that? I mean algorithms that are fair, reasonable, and non-discriminatory. Free from bias and self-preference. ‘

The News Media Association, which represents UK national and regional papers, published the study.

It has led renewed calls for the Digital Markets Unit (DMU) to be given the powers it needs to level up the playing field between news publishers and online giants.

News content is extremely important for digital platforms because it keeps users engaged and provides valuable data for online advertising, the study said.

Entitled to the Value of Digital Platforms in the UK, it found around two thirds of Google search results in the UK showing up links to news articles.

It can appear through direct search queries or those that appear indirectly but capture the attention of the user and help give a better answer.

News content similarly benefits Facebook in keeping its users interested, which is critical to the social media giant’s business.

Its algorithms have been developed to maximize user engagement, which in turn enables it to sell more ads and collect more user data with which to target these ads.

Google earned £ 10.8billion and Facebook made £ 5.3billion in the UK in 2021, according to estimates based on company reporting.

News content is extremely important for digital platforms because it keeps users engaged and provides valuable data for online advertising, the study said.  Entitled to the Value of Digital Platforms in the UK, it found around two thirds of Google search results in the UK showing up links to news articles

News content is extremely important for digital platforms because it keeps users engaged and provides valuable data for online advertising, the study said. Entitled to the Value of Digital Platforms in the UK, it found around two thirds of Google search results in the UK showing up links to news articles

But Professor Elliott said: ‘They share little, if any, of these revenues with the publishers whose news content they rely on.

By considering how much revenue Google and Facebook might gain if news content were withheld, it is estimated that the value of the news to the platform is about £ 1billion a year.

‘If the public is to continue to be served with high-quality news, the benefits from investing in journalism made by news publishers should accrue to them, not Google and Facebook.’

The draft Digital Markets, Competition and Consumer Bill were announced earlier this week at The Queen’s Speech.

It will empower the DMU to comply with codes of force tech giants – or face fines up to 10 per cent of annual turnover.

Mr Zwillenberg said: ‘It is now firmly on the agenda and we are now at a point where it can open a new chapter and actually discuss what is a fair and level playing field.’

Meta said Facebook’s New Feed in 2021 sent over 180 billion clicks to news publishers at no charge to them, with an additional traffic worth an estimated £ 7.4bn.

A spokeswoman also highlighted the investments it made in journalism, including the £ 12.5m in the Community News Project, a partnership with the NCTJ to help local newsrooms and improve diversity.

He said last year the company also launched Facebook News, a dedicated surface for national and local news that has paid tens of millions of pounds to hundreds of news sites to be part of its service.

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