A games company and a search giant tussling over Fortnight doesn't sound like it has much to do with publishing. But it begins a process which could see publishers get more revenue
There has been a lot of controversy over Google and Facebook “stealing” content from publishers. Publishers have been accusing Google of stealing their content for a long time. They claim that Google's search engine and news aggregator are infringing on their copyrights and depriving them of revenue, particularly in a world where more and more answers are appearing on Google’s results pages rather than pushing traffic to publishers.
The argument is that Google is using publisher content without paying them or asking for their permission, and that this is unfair and illegal. They also complain that Google is dominating the online advertising market and squeezing out their competitors. Some publishers want Google to pay them for displaying snippets of their articles or linking to their websites, or to stop using their content altogether.
Google, of course, argues that it is providing a valuable service to both publishers and users. It says that it is helping publishers reach a wider audience and drive more traffic to their websites, while also giving users quick and easy access to relevant and high-quality information. Google also points out that it respects the choices of publishers and allows them to opt out of its platforms or customize how their content is displayed.
Gannett, the publisher of USA Today, is not convinced. It has sued Google for allegedly monopolizing the advertising technology market, arguing that Google's broad control of the ad tech market has hurt the news industry, as online readership has grown while the proportion of online ad spending taken by publishers has decreased.
Gannett isn’t the only one. The Daily Mail alleges that Google has too much control over the online advertising market, which has resulted in newspapers seeing little of the revenue that their content produces. The lawsuit claims that Google controls the tools used to sell ad inventory, the space on publishers' pages where ads can be placed, and the exchange that decides where ads will be placed. The Daily Mail argues that this lack of competition depresses prices and reduces the amount and quality of news available to readers. The lawsuit also alleges that Google “punished” publishers who "do not submit to its practices”.
A lot of this hinges on copyright, and what amounts to effectively extending its provisions to cover something that’s previously been considered fair use: showing snippets of publisher content to let users decide if they want to click through to the content.
Similarly to Cory Doctorow, I would argue that extending copyright like this is foolish, and ultimately won’t benefit publishers and the rest of the creative industries. What will benefit us is removing the choke points that big tech companies like Google and Facebook own, and that world took a significant step forward this week.
Yesterday, a federal court jury ruled in favour of Epic Games in its lawsuit against Google, marking a significant victory for the game developer. The jury found that Google's Android app store, Google Play, uses anticompetitive practices that harm consumers and software developers.
Epic Games had accused Google of abusing its dominant position as the developer of Android to strike deals with handset makers and collect excess fees from consumers. Google collects between 15% and 30% for all digital purchases made through its shopfront. Epic tried to bypass those fees by charging users directly for purchases in the popular game Fortnite; Google then removed the game from its store, which led to the lawsuit.
The jury agreed with Epic on every question it was asked to consider, including that Google has monopoly power in the Android app distribution markets and in-app billing services markets, that Google did anticompetitive things in those markets, and that Epic was injured by that behaviour. What the remedy will be is yet to be determined. But even if it is confined solely to Epic, it’s a step towards breaking the stranglehold that Google and Apple have on the app stores and making the 30/15% tithe they take a thing of the past.
Why does this matter to publishers? Because it opens the possibility of publishers getting more control over the way their content is distributed to smartphones, and ultimately take more revenue by, in effect, running their own app stores just for content.
Being able to have an app store just for your publications would mean an immediate increase in revenue. Currently, between 15- and 30% of every in-app subscription or micropayment goes to the tech giants. If publishers could bypass this fee, they would retain a larger portion of their sales, potentially leading to significant financial gains.
This, as Doctorow highlighted, is where Google and Apple have been taking money from publishers – not by “stealing content”, but by stealing revenue. And it has the added bonus of allowing publishers to get a closer relationship with their customers, something that the app store intermediary model removes. . Customers won’t be buying from Apple or Google and the platform passing on the money to you: they will be buying directly from the people who make the content.
Of course, there are also challenges and risks associated with running an app store. These include the technical and financial resources required to develop and maintain it, ensuring security and privacy for users. Publishers would also have to convince users to switch from established platforms like Google Play and the Apple App Store, which takes more investment in marketing.
Of course, there are downsides. Publishers will need to spend more on discovery because it’s unlikely that either Apple or Google would ever promote a competing App Store. But that’s a small price to pay for restoring the direct relationship you have with customers.
