News Corp’s Rupert Murdoch calls (again) for payments from Silicon Valley

News Corp Executive Chairman Rupert Murdoch has long been critical of Google and online content aggregators in general. He sees them as parasitic and, at one point in 2009, publicly stated that he would block Google from crawling his sites.

Obviously, that hasn’t happened, and from time to time, Murdoch has moderated his anti-Silicon Valley rhetoric. But now he has turned his ire toward Facebook. Reviving a previous demand, Murdoch is once again calling for big internet sites to pay for news content:

Facebook and Google have popularized scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable. Recognition of a problem is one step on the pathway to cure, but the remedial measures that both companies have so far proposed are inadequate, commercially, socially and journalistically.

There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism. We will closely follow the latest shift in Facebook’s strategy, and I have no doubt that Mark Zuckerberg is a sincere person, but there is still a serious lack of transparency that should concern publishers and those wary of political bias at these powerful platforms.

The time has come to consider a different route. If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies. The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.

Facebook recently decided to de-emphasize news and other commercial publisher content in its News Feed. On Friday, the company also said that it will prioritize news from publishers that have been identified by users as trustworthy. This move is what triggered the Murdoch complaint.

Murdoch believes that search engines and social sites like Facebook deliver less value to his business than he provides to them. He has long believed that visitors who don’t directly navigate to his news properties are worth considerably less (or worthless).

The Wall Street Journal, which is owned by News Corp, ended its participation in Google’s “first click free” program in early 2017. It saw its traffic drop by nearly 45 percent but reported “a fourfold increase in subscription conversions.”

More than a decade ago, News Corp’s own foray into social media was a failure. The company acquired Myspace for roughly $580 million in 2005. Six years later, it sold the company, which had then been overtaken by Facebook, for about 6 percent of the original purchase price. That experience may also be fueling Murdoch’s latest complaint.

In Europe, various governments and publisher interest groups have sought to impose copyright licensing fees on Google, largely without success, as a way to subsidize the industry. Murdoch is invoking the cable TV model by analogy to lend greater credibility to his demand to be paid for content.