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Two weeks ago, I questioned the news industry’s efforts to pay their reporters and other staff fairly, risking losing talent to online platforms or other industries looking to lure them with better compensation packages. Today I’m here with another problem newsrooms face as their plight becomes more complex than ever.
Unless you’ve been living in a cave, you’re aware of how quickly and deeply the newspaper industry is being decimated. You’re also likely aware that newspapers are having a massive challenge trying to get paid fairly for their content that appears on Big Tech platforms — primarily in the form of Facebook and Google. This consistent underpayment to newspapers may have a much more detrimental effect than any of the industry’s other current challenges.
At the heart of the problem is the fact that an ever-growing number of consumers are reading news stories on social media — and in particular, Facebook. Social media sites have perfected a means to curate newspaper content alongside advertisements, which has been proven to decrease clicks on the news content and increase the likelihood of readers clicking on ads. When that happens, the revenue goes to Facebook, not to the original news site whose journalist wrote the piece. That’s the reason Pew Research reports that the news industry has lost advertising revenue every year since 2006 — even during years when newspaper circulation increased.
Hal Singer, managing director of Econ One, an economic consulting firm, adjunct professor at Georgetown’s McDonough School of Business, and consultant