Google Inc. is ending a decade-old policy that asked publishers to open up their paywalls to Google News users, or see their traffic from the search giant drop. And it is announcing that it will work with publishers to help them promote their digital subscriptions.
The shift comes as the digital giants are facing pressure over their dominance of the information ecosystem online. Both Google and Facebook Inc. have in recent months announced initiatives to promote journalism and to work more collaboratively with news publishers. Google's policy, known as "first click free," mandated that publishers with subscription-based websites must allow users clicking on links in Google News to bypass their paywalls on a minimum number of articles each day. Those who did not participate saw their Google News listings ranked lower. It will now replace "first click free" with what it calls "flexible sampling," which will allow publishers to decide how many stories Google News users can read for free before being asked to subscribe. The change is based on tests Google did with the Financial Times and the New York Times.
Google is also announcing that it will offer data analytics to publishers to help them better target subscription offers, and to understand readers' propensity to pay for news. And it will offer the option to publishers to help simplify the subscription process for Google users who are signed in to their accounts, by automatically filling in some of their information if they decide to subscribe. Finally, it will adjust targeted listings on Google News and add more results in Google searches to show links from sites that users subscribe to, in order to "increase engagement" with those news sites and make people more likely to resubscribe.
"There are significantly more news organizations looking at paywalls today than there were a year ago, or a year before that," said Richard Gingras, head of Google News. "So it's a reaction to the marketplace dynamics, to the recognized need for quality news publishers to expand their business models to include subscription revenue."
The changes reflect tensions caused by the way news consumption has shifted. People often are coming to news sites through links they click on elsewhere, not browsing a single site they are loyal to in order to find information. And the vast majority of that external traffic is coming into articles from two sources: Google and Facebook. Publishers are not just dwarfed by the scale of those businesses; they depend on them for exposure. At the same time, those two companies compete for ad dollars with publishers, operating their own advertising businesses that profit from a wealth of content on the Web that they do not pay to produce; a recent forecast from research firm eMarketer suggested that Facebook and Google will control more than 60 per cent of U.S. digital advertising this year.
Facebook has also been working on its relationship with publishers: it launched Instant Articles in 2015, making articles load within Facebook much more quickly and smoothly than via a link to a site, and sharing ad revenue from those articles. But publishers have raised concerns that they had no mechanism to sell digital subscriptions through Instant Articles. They're free, and they help boost time spent with Facebook; not users' willingness to support a news outlet. In July, Facebook said that it would begin testing a tool in Instant Articles this fall to help drive subscriptions.
"For too long, both companies have dictated – intentionally or unintentionally – the business model of the publishing industry online," said Jason Kint, CEO of Digital Content Next, a U.S.-based trade association for premium publishers, which represents media companies including the New York Times, the Financial Times, BBC.com, the Associated Press and others. "There's really no way as a publisher to survive and thrive without a relationship with Google, because of their power. They have a monopoly on search. You have to work with Google. Same thing with Facebook."
The Wall Street Journal, which opted out of "first click free," saw a 44-per-cent significant drop in traffic from Google News referrals in the first five months of this year, parent company News Corp. has reported. News Corp. has over time been one of the most vocal critics of Google in the news business; CEO Robert Thomson said at an event earlier this year that he would share that statistic with the European Commission, "which is rightly investigating Google's blatant abuse of its search monopoly." This summer, the News Media Alliance – a U.S. group representing roughly 2,000 newspapers and digital publishers – requested an antitrust exemption from Congress that would allow them to form a bargaining coalition to negotiate more effectively with Google and Facebook.
Google's Mr. Gingras said the company recognizes that publishers rely on the Web to build audiences, and while Google does not make money from subscriptions, its ad business does benefit from their success building those audiences and their financial viability to continue creating content.
"Google's success is driven by the fact that there is a rich ecosystem of knowledge on the Web. We want that to continue. The value of Google search is dependent on that. So it's very much in our interest at Google search for that content to be there," Mr. Gingras said. "Our ad platforms, being used by two-million-plus publishers around the globe, are also based on the open Web. So the health of the open Web is very intrinsic to the nature of our business."