Publishers Seek More Money From Platforms to Pacify Their AI Woes

As excitement—and anticipation—of how artificial intelligence will upend the media industry grows, legislation that would let publishers collectively negotiate with tech giants for fair compensation for the use of their content has been reintroduced in Congress earlier in March.

Similar bills have been passed recently in Australia and Canada and have had seemingly positive impacts on publishers’ revenue and newsroom size. Following the year after the Australian bill was passed, Australian newsrooms were paid a collective of nearly $150 million, based on 2022 numbers.  

“Those are some quantifiable measurements,” said Danielle Coffey, executive vice president and general counsel of publisher trade body News Media Alliance.

Here’s an explainer of the Journalism Competition and Preservation Act (JCPA) and what it means for marketers and publishers.

What is the JCPA?

First introduced in March 2021 by Senate Antitrust Chairwoman Amy Klobuchar, the JCPA circulated in the previous session of Congress but was dropped in a defense-spending bill last December.

“Local news is facing an existential crisis, from ad revenues plummeting and newsrooms across the country closing to artificial intelligence tools taking content,” said Klobuchar at the time. “To preserve strong, independent journalism, news organizations must be able to negotiate on a level playing field with the online platforms that dominate news distribution and digital advertising.”

How does it work?

If passed, the JCPA will let digital publishers, with fewer than 1,500 full-time employees, collectively negotiate with dominant online platforms on pricing. Dominant platforms include companies with at least 50 million U.S.-based users and are owned or controlled by a person with net annual sales or marketing capitalization of over $550 billion, or at least one billion global monthly active users. Naturally, that includes Google and Facebook.

These platforms will be prohibited from retaliating or discriminating against the outlets based on their size or views expressed in their content, according to the bill. If platforms are found in violation, publishers can sue them through a private right of action.

The bill lets non-broadcaster news publishers demand a final-offer arbitration if their joint negotiation with a covered platform fails to result in an agreement after six months.

“The panel of arbitrators step in and decide which offer most closely approximates fair market value and wins,” said Coffey.

So, what has changed?

Publishers have fresh concerns now that AI tools are developing at a formidable pace, adding another dimension to the tensions already existing between big tech and publishers.

Lawmakers are aware of this fraught relationship. The bill continues to have bipartisan support, and as AI advances, the bill sponsors are eager to move it across the finish line.

Although its reintroduction spurred conversations around new provisions catering to AI, the bill is the same version that was passed out the Senate Judiciary markup, according to Coffey, which covers “access” or crawling of content, including AI.

“We’ve always considered AI in what we would want to be paid for,” said Coffey. “That wasn’t new to us.”

The bill will allow for fair compensation subject to individual publishers. This includes the revenue extracted from the platform’s views of a news publisher, including photos, summaries, snippets, data from readers, engagement, advertising against that content, use of content in AI and ad tech tax.

Okay, so what’s the concern?

While publishers get roughly an average of 27.72% % of their traffic on a trailing 12-month calculation from Google search, according to a small sample of 20 publishers from Parse.ly, there have been long-standing concerns, especially in Europe, that the content snippets visible in search engines lead to publishers receiving less traffic and generating less revenue.

As tech giants like Microsoft and Google’s version of AI search engines gain market muscle, this has further aggravated publishers in the U.S. who are already grappling for fair compensation from big tech.

If the bill passes, it could lead to an increase in publishers’ revenue and newsroom size. But, currently, there’s no unified protocol for publishers to make claims.

This sounds familiar. What are other countries doing?

A similar bill went into effect in March in Australia, called the News Media and Digital Platforms Mandatory Bargaining Code. Publishers have been able to collectively extract hundreds of millions from platforms, as well as grow newsrooms, with the public Australian Broadcasting Corporation can place at least fifty new journalists across the country. However, the exact details of where the money goes and who benefits are unclear.

Similarly, the Canadian government too introduced the Online News Act in April last year, and estimates point to a growth of at least 30% in Canada’s newsrooms, according to Coffey.

Other regions, including Latin America, the U.K., India and New Zealand, are looking to introduce similar legislation.

What is big tech’s stance?

In response to Adweek, Meta shared a statement stating the company will be forced to remove news from its platform if “Congress passes an ill-considered journalism bill.”

Meta similarly threatened to pull its news content from Australia but eventually reached voluntary commercial agreements alongside Google for the region’s news organization.

Meanwhile, according to Reuters, Meta is said to pull similar stunts in Canada if the bill goes through. Google, which started testing news censorship for some Canadians earlier in February, confirmed with Reuters that the time-limited tests would impact less than 4% of random users in Canada.

A global report by NERA Economic Consulting that Meta commissioned found that publishers reap “considerable economic benefits” from their use of Facebook, constituting approximately 1% to 1.5% of their revenues. Even so, the proportion of adults using Facebook for news fell by about a third between 2016-2022, from 45% to 30%, according to the report.

What’s next?

The bill sponsors are moving the bill through regular order in the Senate and are hoping the legislation will cross the finish line this time, in the next few months.

“They recognize that there’s a problem,” said Coffey. “And it’s a matter of what we can come up with is a solution that they would be amenable to.”