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The global ad market now revolves around a new core: the algorithmically targeted placements offered by the likes of Facebook and Google. (Photo Illustration: Rafael Henrique/SOPA Images/LightRocket via Getty Images)

The global ad market now revolves around a new core: the algorithmically targeted placements offered by the likes of Facebook and Google. (Photo Illustration: Rafael Henrique/SOPA Images/LightRocket via Getty Images)

World Press Freedom During the US Tech Boom

Free Press believes that creating a diverse and thriving news sector in the United States can be achieved by imposing a tax on online-advertising revenues that fuel the platforms and the attention economy.

Timothy Karr

On Monday many observed World Press Freedom Day, a chance for people everywhere to assess the global health of a free press and the future of journalism.

As the world marked the occasion, the world's largest tech companies, including Amazon, Facebook and Google, reported their quarterly earnings. The news for them is very, very good: Their streak of trillion-dollar earnings in 2020 is expected to continue to grow through 2021.

But what's good news for these tech giants is bad news for most traditional news outlets around the world.

Quality local journalism has gotten lost in the reshuffle of the advertising economy.

The New York Times reports that U.S. tech giants are "making bonkers dollars" because of the coronavirus, not in spite of it. The effects of the pandemic have been very different for the world's newsrooms, which have seen an uptick in layoffs and closures since the beginning of 2020 due to the economic downturn and the continuing decline of advertising in newsprint.

The global ad market now revolves around a new core: the algorithmically targeted placements offered by the likes of Facebook and Google. In comparison to traditional media advertising, this technology is a far more economical way to put products (or ideas) before people who are most likely to buy (or support) them.

Quality local journalism has gotten lost in the reshuffle of the advertising economy. These digital-advertising platforms don't need to employ reporters or produce news content to reach their intended audiences. The latest numbers reflect this change: eMarketer projects that global ad-spending will top $695 billion in 2021, and that more than 56 percent of that will be payments to online advertisers that typically don't produce local-news content.

To understand what this means, It's useful to think of U.S. tech companies as extraction industries that take advertising revenues out of local-news economies.

Lawmakers around the world have responded by crafting policies to "make Big Tech pay" for the damage it's doing to legacy news production.

The News Media Bargaining Code in Australia and the Journalism Competition and Preservation Act in the United States are examples of this response. In effect, these policies seek to force tech platforms into payment negotiations with large outlets in exchange for linking to their content.

Earlier this year, Rupert Murdoch's News Corp. leveraged the mere threat of these rules to secure a three-year deal with Google that would provide access to the publisher's empire of news content in exchange for "significant payments" from the search giant.

But is facilitating payment negotiations between new and old media giants really the answer?

The reality is that the market-driven model that once fueled traditional news production isn't sustainable in a world where attention has become the main commodity.

Any policy solution that merely props up the media's old model is simply prolonging the life of a commercial news system that never really served all of the people.

"More than simply placing regulatory patches on broken commercial systems, we must intervene at media's very foundations," argues media scholar Victor Pickard. He calls for regulatory support of "a positive program that provides robust, diverse, and reliable news and information to all communities—and these communities should be centrally involved in governing and making their own media."

Any policy solution must be built on the fundamental belief that public-interest journalism is a social good, that it is essential infrastructure for democracy, and that governments must play a central role in funding this infrastructure if they hope to see democracy thrive.

Free Press believes that creating a diverse and thriving news sector in the United States can be achieved by imposing a tax on online-advertising revenues that fuel the platforms and the attention economy.

The resulting revenue would be placed in a Public Interest Media Endowment and used to fund the kinds of local, independent and noncommercial news that's gone missing from too many communities. For example, a 2-percent ad tax on the 2020 U.S. advertising revenues of the 10 largest platforms would yield more than $2 billion for the endowment—that's more than four times the annual funding the U.S. government provides for public media.

This is just one approach that can be modified by other nations facing the journalism crisis. There are many others: Lawmakers in Canada and the United States have proposed the use of tax credits to help fund local journalism. Such proposals are evidence that lawmakers are getting serious about the issue — but these plans won't deliver the levels of support needed to rescue local news.

Any policy solution must be built on the fundamental belief that public-interest journalism is a social good, that it is essential infrastructure for democracy, and that governments must play a central role in funding this infrastructure if they hope to see democracy thrive.

As we recognize press freedom worldwide, we should take action to ensure that it gets the support it needs to survive.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Timothy Karr

Timothy Karr

Timothy Karr is the senior director of strategy for Free Press Action Fund, the advocacy organization that fights for everyone’s rights to connect and communicate. Follow him on Twitter: @TimKarr.

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