News publishers all over the world have tried to estimate what Google and Meta owe them for the news they distribute to audiences. This is a difficult task due to a lack of publicly available data about audience behavior and because a lack of competition makes the price tech companies pay for news artificially low.
Our new working paper estimates that Google and Meta owe U.S. publishers between $11.9 and $13.9 billion a year.
The tech giants have argued that news is not essential and that publishers are lucky to have their platforms driving traffic to their sites, which can then convert that traffic into subscriptions. But our study finds that news is important to Big Tech platforms and that value is created for both sides. We use insights from more than 50 years of research in the economics of bargaining to find the fair payment for news. If publishers were able to negotiate collectively, for example if the proposed Journalism Competition and Preservation Act were enacted, publishers would receive far more than they do now.
Big tech companies have resisted paying traditional licensing and copyright fees and are not forthcoming about providing audience traffic and impression numbers. What payments they make are meager and often through small grants or private arrangements with major outlets.
Unsurprisingly, by keeping the cost of goods sold (news) down, Google and Meta have grown rich off the advertising revenue they reap from attracting the world’s eyeballs to their sites.
Meanwhile, news deserts have become a global problem as outlets struggle with the loss of revenue, although some — like The New York Times and The Guardian — have been able to offset the losses with subscriptions and other income.
In 2021, Australia took action when then-Competition and Consumer Commission chair Rod Sims proposed that the large media platforms should negotiate directly with news outlets. If they could not reach an agreement then the government would appoint an arbitrator to help lessen the power imbalance between the large platforms and the news publishers. The government passed the Australian News Media Bargaining Code, which has injected hundreds of millions of dollars into the news business in that country. Other governments — such as Canada, which passed its C-18 law — are paying attention.
In response, Google has signed payment agreements directly with publishers around the world. These are covered by nondisclosure agreements, so the amounts are not made public. Nor is the methodology of how such payments are calculated made public. This has put smaller outlets and digital natives at a disadvantage as they don’t know the basis on which deals are being made.
As the laws spread globally, coming to some sort of standard will be critical in order to ensure equity for smaller outlets.
Our working paper contributes to the global debate. Co-written with three economists and reviewed by some of the top names in the field, we estimate what news contributes to the revenues of Meta and Google. Part of our methodology came from a study conducted for Swiss publishers earlier this year by the Swiss consulting firm Fehr Advice & Partners AG. They created a randomized control trial in which they compared user behavior between Google search and a version of Google created without news. The study, which Fehr is replicating in other countries, found that news is a key part of the search experience.
We applied this analysis for Google, and data from a recently published study on Facebook usage, to the U.S. market and calculated a reasonable revenue-sharing agreement. We then reviewed the few deals that have already been made with Google and Meta for which information is publicly available. Finally, we benchmarked other licensing agreements to verify whether our calculations are in line with industry practices.
Our contribution is not just that we provide a dollar amount for what is owed — which we estimate at between $11.9 to $13.9 billion a year in the U.S. — but we also provide details of our methodology so that others can replicate our work or use the same methods in their own markets. We benchmark our estimates against recent deals that have been made between news outlets and Google/Meta, but also with a database of news licensing agreements over decades.
Our estimates take into account the value of news-related internet searches to Google, and the value created for Meta from the presence of news content, on Google and Facebook’s platforms. We believe this is a more accurate assessment of the value of news than Google’s figure that 2% of search queries are related to news.
We estimate what the revenue split between the platforms and news media publishers should be. At a 50% split, this works out to be roughly $10 to 12 billion owed by Google to U.S. news publishers. Very conservatively, we estimate that Facebook owes $1.9 billion to publishers.
There are many ways such funds can be distributed and we have written extensively about the policy options available. This paper does not provide recommendations. We simply confine ourselves to estimating the amounts owed to U.S. publishers by Google and Meta.
Unlike Hollywood actors, journalists don’t have one big union. It’s too easy for the bigger and more powerful outlets to cut deals while others are left out in the cold. Our hope is that through this study — which will be publicly available in a few days — we can open up the remuneration discussion and encourage others to share data and make better estimates for a fairer price for news.
As deals are quietly signed around the world and large language models suck up content without paying for it, the need for more quality information is urgent.
The authors of the study are Dr. Patrick Holder and Dr. Haris Tabakovic, Dr. Haaris Mateen and Dr. Anya Schiffrin.
