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Summary:

Everyone seems convinced that the Internet owes them a living, and that Google (being synonymous with the Internet the way it is for so many) is the best one to settle the bill, especially since it has billions of dollars just lying around, like Scrooge McDuck. Let’s call this the “Google as sugar daddy” argument. But why should Google pay? Especially when the main argument as to why it should seems to be because it can?

d1117sugar-daddy-postersVariations on the “Google should pay me for X” theme have been around for some time now, and the precipitous decline of content-related industries — among them book publishing, newspaper printing and music distribution, to name just a few — has only accelerated the number and frequency of these complaints. Everyone from the World Association of Newspapers to the American Authors Association seems convinced that the Internet owes them a living, and that Google (being synonymous with the Internet the way it is for so many) is the best one to settle the bill, especially since it has billions of dollars just lying around, like Scrooge McDuck. Let’s call this the “Google as sugar daddy” argument.

But why should Google pay? The main reason seems to be: Because it can. Any additional rationale comes off as an afterthought, and one that in most cases, doesn’t hold water.

The latest addition to this sad pantheon is an opinion piece by Peter Osnos, a former journalist turned book publisher who writes for an outfit called the Century Foundation. He has posted on The Daily Beast a shorter version of a piece he wrote for the Century Foundation. The most recent one is called “Will Google Save The News?” but the earlier piece is much more blunt, entitled simply “Make Google Pay.” Osnos’s argument seems to be: Google paid book publishers for the right to scan their books, therefore Google should pay newspapers as well, since their content is used without their permission in Google News. Presto! Industry rescued. As he puts it:

“The major point is that Google has now conceded, with a very large payment, that information is not free. This leads to an obvious, critical question: Why aren’t newspapers and news magazines demanding payment for use of their stories on Google and other search engines? Why are they not getting a significant slice of the advertising revenues generated by use of their stories via Google?”

This argument is so full of holes that it’s difficult to know where to begin.

Let’s take one of the most obvious points: Google News doesn’t carry advertising, so there are no “advertising revenues generated by use of their stories” for the news industry to get “a significant slice” of (there is referral revenue, but that’s a step removed, and requires a different argument). Obvious point #2: Books are not newspapers. Google was (and is) scanning hard copies of books and adding them into its index of data, which publishers say amounts to copyright infringement. The only way this would be comparable to what Google is doing with newspapers is if Google was buying copies of every newspaper and scanning all the stories manually. Stories show up in Google News because newspapers make their content freely available — if they did not, then it wouldn’t be indexed. Don’t want Google to have it? Don’t publish it online, or use simple tools (like robots.txt) to block the Google bot from indexing it.

Obvious point #3 (although this could easily be a candidate for obvious point #1): Google is indexing entire books, but only small fragments of news stories appear in Google News. Why should Google pay newspapers for the use of a headline and a few sentences from their stories? Even if you assume that newspapers aren’t getting a flood of traffic from Google (which they are), and even if you ignore the fact that this kind of use is a prime candidate for exclusion under the “fair use” clause in U.S. copyright law (which it almost certainly is), asking for payment makes no sense whatsoever. If you follow the logic of Osnos and his fellow Google-hounds, then I should be able to sue Google and be compensated for having my blog indexed in its search results.

This is absurd, of course — as is Peter Osnos’s argument (former journalist Mark Potts makes some good points on his blog as well, calling Osnos’s theory “sheer idiocy”). The real reason that Osnos thinks Google should pay is simple: Newspapers are desperate for funds, and Google has boatloads of money. But that doesn’t mean his thesis has any actual merit. The reality is that newspapers should be thinking of ways (and many are) to profit from the traffic that Google and other web sites and social networks send them, not obsessing over how to get the search giant to cough up some of its cash.

  1. Mathew,

    I think Potts’ number (20 – 30%) for traffic from Google is “at least”. On a website that is properly SEO and has deep archives that number more than doubled, as it was on the community newspaper website that I developed.

    Osnos doesn’t understand what news companies sell. I know I’ve been saying this a lot lately, but it bears repeating. It’s not newspapers, its not news, its not content, and its not information. It’s readership. Why these guys continue to miss this fact boggles my mind.

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  2. How much did Google pay you to write that?

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  3. Right on target!

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  4. [...] the rest of this post at GigaOm) [...]

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  5. Your analysis is just brilliant..

    These people should wake up, smell the coffee, and realize that the market they thought they knew, has changed completely. If they don’t / can’t see that, well, that’s their own problem, NOT Google’s…

    http://the-anti-google-baloney.blogspot.com/2009/02/i-wont-pay-i-wont-pay-ya-no-way-now-now.html

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  6. It’s past time for Google to agree to the offered deal, to stop crawling selected news sites.

    One of two things will happen.
    (1) Those sites will find that they don’t need Google traffic.
    (2) Those sites will find that they need Google more than Google needs them.

    If (2), Google has another revenue opportunity, namely charging them for popularizing their content.

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  7. Well if I would run a news organization I would change the business model.
    Cut a deal with Microsoft or Yahoo or what ever and publish my content only under that brand.
    No links, internally all ads and page views are tracked by my publisher. Revenue from a click through is shared between search (most likely) and review articles to just brand advertising on site.
    Let Google handle the long tail, and let’s see how much money they make from it.
    Nobody ever said we have to use the Web as is. Eliminate the published links, just create them autonomous internally and let’s see how good Google’s engineering really is.
    To bad news publishers have no idea what can be done with technology or how to use it. And how to use it to change the business model from “search click through” to “shared for research and branding”.

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  8. Can you be more biased towards Google?

    I wonder what would happen if every newspaper blocked their site from the Google crawler.

    Google may not have ads on their news page but by offering an aggregated news service, they want you to use their search, etc which does have ads. So they do indirectly benefit from someone else’s content.

    I’m not saying Google should pay the papers but they are not all that innocent either. They can’t always hide behind the veil of “Do no evil”.

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  9. Totally agree, Tim.

    And David, I’m not biased towards Google at all — if anything, I’m biased towards the *Internet.* What difference does it make whether it’s Google aggregating some news headlines and links or the guy down the street who puts together his own news page? By Osnos’s logic, they should both pay because they are re-using newspaper content.

    But ignoring for a second the principle of fair use, if using a headline and a couple of sentences from a newspaper story extracts all the value that story has, then your paper has much bigger problems than getting money out of Google.

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  10. An analogy to the relationship between management and workers in the general economy: Without a union (collusion among newspapers), labor (individual publications that do the work of the web) has no bargaining power against management (search engines that direct attention).

    Therefore change the anti-trust laws so that newspapers (labor) can collude (create a union) to force search engines (management) to pay for the privilege of indexing their intellectual property (work product).

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  11. Interesting discussion. On one hand, there’s a strong argument that Google is free-riding on the world’s content: the world is slaving away to create the content that make Google’s service useful–even the links that help Google rank it! On the other hand, almost everyone trying to make money in the content business is using an ad-supported model that depends on Google for traffic and in some cases even for the ads themselves!

    It’s true that anyone can opt out of being indexed by Google. But it’s a prisoners’ dilemma: unless the content providers collude en masse, it’s a bit late to dethrone Google from being the world’s primary interface to this content. Note to newspapers: as you have sown so shall you reap.

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  12. Quite the blinkerd nature of old skool media amazes me the Guardian media asupliment on modays is a good example. If for exampel it turns of steve jobs has 3 months to live this would be a small story thr inside page while they lead with a full page story about thow the second assistant tea boy at the frimly advtiser and bugle is being made redundant!

    The fus the NUJ made over alowing a Blogger to be a meber made me laugh also

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  13. Daniel,

    You’re kidding, right? “Free-riding on the world’s content”?

    Without a decent search engine like Google, there’d be no way to find all the juicy information out there on the web. The web would be next to useless.

    You see that, right? I mean, using [insert favourite search engine here] is so ubiquitous and simple that it’s like breathing air – we don’t notice it until it’s gone. But try to have a serious sit-and-think about what the web would be like without working search engines. I have one word for it: craptastic.

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  14. I am not anti-Google, but I just don’t think the issue is as simple as you posit. And most of all, I don’t think the answer “because it can” is what people usually use a their rationale.

    The logic behind some of that “being wronged by Google” is that Google DOES NOT PRODUCE CONTENT. Its money is coming from ads running ON TOP OF OTHER PEOPLES’ CONTENT. Let me repeat: OTHER PEOPLE PRODUCE CONTENT WHICH GOOGLE RUNS ADS ON (WITHOUT PAYING). How hard is it to understand?

    As far as the argument “oh, we don’t have ads here” is concerned, it’s ridiculous. If it’s worth for Google having this service – for brand management, for example, it means they SHOULD be willing to pay for this. Otherwise, why do they have Google News? Also, Google Finance did not feature ads until last year. Now they do. Should newspapers simply have to wait until they start monetizing to complain?

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  15. I, for one, welcome our Google overlords!

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  16. There is no argument.

    Newspapers put their content for FREE online. For FREE. So let me recap: They put articles online for free, and google should pay to send traffic to these articles?
    As Mathew says, if they dont want people reading their stories, they can just make them subscription only or block the content to Google bots.
    If their articles are free, they are free and cannot ask for monetization from a third party. Otherwise, I, as a user, should also pay the newspaper everytime I send a link to a story to a friend.

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  17. I have a huge problem with anyone demanding things of Google or any other search engine company for that matter. Google is, first and foremost, a search engine that indexes all content — legal and illegal, paid and unpaid. It just so happens that Google is the most popular search engine out there, so naturally everyone is accusing Google of doing very bad things because they are turning a profit.

    The challenge is not with Google, the true question lies with the ethics of indexing and serving up content.

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  18. I think it’s pretty clear that any newspaper that wants to commit Internet suicide should block Google from indexing. Done and done.

    Of course, newspapers are finding myriad ways to kill themselves, so what’s another log on the fire?

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  19. [...] Yesterday afternoon, Matthew Ingram responded to Osnos’ article with the post “Google Is Not Your Sugar Daddy,” at GigaOM. Ingram says Google owes newspapers bupkis. Why should Google pay newspapers for the use [...]

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  20. Newspapers make their content public on their own site. It is NOT FREE, it’s PUBLIC. Users pay them a visit and they show content & ads.

    Google should index them, just as it indexes any other website. BUT running a News display or News search engine amounts to making a product based on someone else’s content.

    This clearly is riding for free.

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  21. Newspapers GET a huge amount of value from appearing on Google News without having to pay for the placement. Readers scan Google News, find articles of interest, then click on the article which takes them to the original newspaper site complete with ads and such.

    The rest of us have to PAY Google for this sort of advertising. The newspapers are getting it for free. So far.

    I wonder what would happen if Google sent a letter to the newspapers offering to either remove them, or allow them to continue to appear on Google News if the newspaper paid Google the going AdWords rate for the placement and referrals. I bet most of the larger newspapers would choose to pay.

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  22. Exactly.

    Newspapers and the old ” I Drink your Milkshake” theory…

    As a matter of fact the Newspapers should look at Google as their Sales Man, better yet, a free Sales Man.

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  23. If google posted more than a sentence’s worth of text in its news aggregate results I’d see the issue, but as it is there’s nothing to complain about. If anything, they’re helping people find stories and funneling them on to the publisher’s site, where the publisher can generate advertising income.

    The “Is Google Too Big?” issue seems to be lurking under this issue, and that is a very valid question. And no, I have no solution/answer to it :P

    Good article!

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  24. I hate to argue any of your points since I agree 100% with your opinion on Osnos and his like minded drones. However Google does display ads on news search – http://zi.ma/GoogleNews

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  25. Om, I seriously think you are sniffing the digital glue that holds your web pages together on this one.

    The fundamental problem here is that Google is (highly likely) robbing news sites of eyeballs that they could be getting and thus losing out on ad revenue due to lowered number of eyeballs reading their content on their site but who found it on a google newsreader first.

    So, Tim Burden, I submit to you and those that have posted similar views that Google indeed is hampering the content creators ability to make money.

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  26. How is Google robbing news sites of eyeballs they could be getting? How likely is it that I would be reading an article in a Phoenix newspaper from Iowa without Google news? If I find the title and the opening sentence interesting enough, I will click through to read the entire article. Otherwise, I would never see the article or the newspapers page (and advertising). I agree that the newspapers are getting FREE exposure from Google and INCREASED eyeballs…
    If you post public information to the web, be grateful for traffic from Google. Instead of complaining, improve your web savvy and SEO and watch the unique views increase!!

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  27. [...] Here’s the article, its much more well-written than my musings:  google is not your sugar daddy [...]

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  28. Jonathan Mendez Wednesday, February 4, 2009

    No one seems to care about what’s best for the people who use the web. Clearly people like aggregation, search, et al. Maybe it’s because 1% of each day’s news(paper) is relevant to me.

    The fight over an open web is over and thus the value prop has changed from being about content to being about distribution. Now that CPMs are falling everyone is crying. They can all look in the mirror instead of Mountain View for the blame.

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  29. Google is making money indexing content?!! Oh the humanity!

    Google is a search engine, they are doing what they are supposed to be doing. Block em if you don’t want your stuff on there newspapers, I dare you.

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  30. If there were no one generating content, why would I use Google? Sure Google sends traffic to newspapers. But if I couldn’t find NY Times stories doing a Google search, or free at the NY Times site, I sure would be paying for access to that NY Times site.

    I know many people believe news is generic. But I’m guessing that’s because they don’t read the news, or they understand that my next door neighbor’s blog is a lot less important to me than a story on a complex issue written by an experienced journalist and curated by the world’s top editors.

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  31. [...] That column had numerous factual problems — torn to shreds nicely by both Mark Potts and Mathew Ingram. Again, though, the issue is that the focus is on just getting someone else (Google, instead of [...]

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  32. [...] That column had numerous factual problems — torn to shreds nicely by both Mark Potts and Mathew Ingram. Again, though, the issue is that the focus is on just getting someone else (Google, instead of [...]

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  33. Great analysis.

    Keep in mind, though, that information overload causes many people to use Google News as their principle news source and never bother to click on the links. They and are satisfied with the headlines and the short excerpt that Google presents on the front page. Thus, Google news becomes a content destination using other people’s content.

    Only Google knows the click-through rates of these headlines…

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  34. Here’s another phony statement in that article: in no way has Google EVER paid publishers to scan their books. In fact, just the opposite– that was the root of their lawsuit against them, with the settlement that pubs will get a CUT of any online sales of copyrighted books.

    If anything, those who should gripe are the college LIBRARIES who have let Google scan their inventory for free!

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  35. I believe that if every major newspaper and magazine colluded to:
    1) create a search engine of their own that indexed their sites, and
    2) blocked Google from indexing their sites
    Google would quickly agree to pay for “landing rights” on their properties.
    In effect, the newspapers and magazines must “unionize” against Google, which manages the distribution of their products.

    If Google didn’t like that, perhaps it could start its own news organization.

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  36. A union wouldn’t change anything.
    If content was blocked, someone would scrape it back into the index. coyright? No one has stopped illegal video downloads…
    Newspaper have their nuts in a vice, but should just be happy to get extra revenue from the google traffic through ad display. That’s what all mediums do.
    No sane newpaper director would cut his readership or reduce the amount of ways people can get to his content.

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  37. [...] Finally, as for my initial fear that this would signal something of an “open season” on Google, with demanding money from Google for Google daring to provide the service of helping others find their works, we’re already seeing some of that in the early stages. Some in the newspaper business are using the book settlement as a template for how Google should pay them too. [...]

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  38. Tom,
    The analogy to illegal video downloading isn’t applicable in the unionization scenario.

    Google currently spiders publications to include them in its index. You seem to be saying that Google would continue to do so even if these publication requested Google to stop doing so.
    Wouldn’t that violate Google’s “do no evil” mantra?
    Wouldn’t that legitimately expose Google to legal action by publication union.

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  39. [...] these arguments? # Google carries no newspaper content itself, beyond headlines, a few words and links. It sends [...]

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  40. [...] Sugar daddy? That’s not earning revenues. Paywalls, donations, tip jars, Kachingle? Forms of pay-for-content. Targeted search ads, upsells in business directory, selling other services? Forms of advertising. [...]

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  41. [...] it’s obvious to most… I think this article is worth repeating and forwarding… I’ve ranted many times about “hybrid” ad [...]

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