Register editor: Big tech is squeezing the finances of newspapers in Iowa and across U.S.; here’s how an antitrust bill could help

Google and Facebook stack the deck against newspapers and broadcasters by refusing to compensate publishers for the work their journalists produce.

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Carol Hunter
Des Moines Register

Just as Iowa is a state of small towns, it’s a state boasting an extraordinary number of small but widely read newspapers — more than 250.

That’s No. 3 in the nation on a per capita basis. Most are weeklies delivering news about the city council, local businesses and high school sports to readers in their town or a cluster of neighboring towns. They’re part of what keeps a town vibrant, providing jobs and connecting the community with shared stories of hardship and celebration.

But from the smallest weekly to the Des Moines Register, the largest news organization in Iowa, the shift of readership and advertising to online platforms has dramatically shrunk the revenue that supports local reporting.

In just over a year, Iowa has seen a reduction of 15 newspapers, most of them merged into neighboring operations, said Susan Patterson Plank, executive director of the Iowa Newspaper Association.

It’s a pattern seen across the country. The news industry has lost more than 28,000 jobs since 2008, and more than 1,800 communities have lost their local newspapers since 2004, including 52 in Iowa, according to the News Media Alliance.

It’s not that fewer people are interested in the news that their trusted local newspapers provide: 83% of Iowa adults read a print or digital newspaper, according to Iowa Newspaper Association data. Counting print and online readership combined, more Americans read the work of newspaper journalists than ever before.

The problem is that two tech giants, Google and Facebook, have a stranglehold on online news and advertising, denying newspapers the revenue they deserve. The same is true for local broadcasters.

This duopoly stacks the deck at every turn:

• First, they literally control access to the news. While I’m grateful for the loyal Register readers who have downloaded our app or otherwise go directly to our websites, research shows most Americans access their news from the stories that surface in their Facebook feed or through Google searches. And at their whim, the two companies change the algorithms that control what users see easily and what they don’t.
• Google and Facebook benefit tremendously from distributing the in-demand news content that newspapers provide, which in turn boosts the companies’ advertising revenue. But they have made the business decision to pay publishers little if anything for their journalism, in contrast to the companies’ practice of compensating music publishers and other creators.
• They also control an estimated 80% of digital ad spending. While some news organizations, like the Register, participate in advertising partnerships, the tech giants return only a fraction of revenue to participating publishers. They also leverage the vast amount of data they collect on users to attract even more business and shut out competitors.

The result is that newspapers are cut off from revenue needed to pay reporters, photographers and editors to cover local news in their communities.

What can be done to combat big tech’s anticompetitive practices and give local publishers a better shot at reclaiming a fair return?

One step in the right direction would be passage of the Journalism Competition and Preservation Act, also known as the Safe Harbor Bill, which would allow a four-year antitrust exemption to permit news organizations big and small to work together to negotiate with Google and Facebook to secure fair compensation for the journalism the publishers produce.

Some critics of the measure say it risks creating a monopoly of “big media” in the effort to rein in the monopoly of big tech. The reality: Big tech dwarfs all TV, print and digital news media in the U.S. combined, garnering nearly four times the revenue as of 2018, according to News Media Alliance data.

The bill, which has bipartisan sponsors, has been referred to the Senate Judiciary Committee, where Sen. Chuck Grassley of Iowa is ranking member and could be key in steering its passage.

Other newspaper representatives and I had the opportunity to speak with Senator Grassley about the bill earlier this month. Grassley is a veteran of fighting the ills of consolidation and vertical integration in the agriculture industry, and I observed that big tech is following the same pattern.

Grassley said he was open-minded about the bill, but if he ultimately lends his support, it might be for reasons other than what we newspaper representatives had discussed. He voiced his belief that big tech unfairly censors conservative viewpoints, most notably by banning former President Donald Trump from Facebook, Twitter and YouTube.

As usual, Grassley listened politely, and his staff was well-prepped and asked smart questions. I trust he’ll give the bill fair consideration. I encourage Iowans to ask our entire congressional delegation to do the same.

The bill could be an important piece of resetting the competitive landscape and maintaining the local newspaper in your town.

Carol Hunter is the Register’s executive editor. She wants to hear your questions, story ideas or concerns at 515-284-8545, chunter@registermedia.com, or on Twitter @carolhunter.