If an industry's broken, can regulation fix it? That's one of the issues that is currently being addressed in the respect to journalism. The Federal Trade Commission is convinced that original reported journalism cannot be sustained by the current environment online. To fix that, the organization is considering a few remedies. One could be a 5% consumer electronics tax. Another is regulation that will prevent low cost news aggregators from scavenging newspapers' reported content.
But there are more than a few things that stand in the way of such regulation. Including Google. In a blog post called Business problems need business solutions, Google explained in no uncertain terms that regulation isn't the way to save journalism.
The FTC draft proposal is a compilation of recommendations and discussion topics to spark the debate around the future of journalism. But a lot are close to home for Google. That's why the company has now responded.
According to the Google Public Policy blog:
"We strongly disagree with a number of policy recommendations set forth in the Staff Discussion Draft, such as the suggestion that Congress enact a federal hot news doctrine -- something that would not only hurt free expression, but also the very profession of journalism that the proponents of hot news say they support."
The "hot news doctrine" would prevent any website from reporting the same facts as a traditional publisher for a set period of time after news breaks. But increasing the inefficiencies in distributing the news would not neccessarily fix journalism's problems.
For instance, newspapers have voluntarily shared news items for years before aggregators came into the picture. But the pace of revenue declined has quickened rapidly with the adoption of the internet.
According to the FTC:
Newspapers' revenues from advertising have fallen approximately 45% since 2000. Classified advertising accounted for $19.6 billion in revenue for newspapers in 2000, $10.2 billion in 2008, and is estimated to be only $6.0 billion in 2009.
But Google is quick to point out that it has not stolen any publications' profits:
"The large profit margins newspapers enjoyed in the past were built on an artificial scarcity: Limited choice for advertisers as well as readers. With the Internet, that scarcity has been taken away and replaced by abundance. No policy proposal will be able to restore newspaper revenues to what they were before the emergence of online news. It is not a question of analog dollars versus digital dimes, but rather a realistic assessment of how to make money in a world of abundant competitors and consumer choice."
Ouch. Google insists that the future of the newspaper industry depends on innovation, not handicapping the competition. Google's post continues:
“Innovating to create products and services that consumers want to pay for is the only way to guarantee long-term subscription revenue growth, and none of the policy proposals are designed to foster that kind of innovation.”
Publications aren't likely to care for Google's response.
As The New York Times wrote last week:
"The potential impact of Google’s algorithm on the Internet economy is such that it is worth exploring ways to ensure that the editorial policy guiding Google’s tweaks is solely intended to improve the quality of the results and not to help Google’s other businesses.
But Google isn't going to let anyone see the details of its top secret algorithm willingly. And while it's fair for companies to worry that Google is favoring its own content over theirs, the idea of newspapers maintaining more ownership over their original content is a difficult to enact. As Google points out:
“Facts, hot or cold, cannot be protected by copyright since there is no author of them.”