The former media executive behind News Corp’s failed Project Alesia bid to take on the new media giants has warned that Google and Facebook’s domination of online advertising “will be a disaster” for publishers.
He headed up Alesia, a plan in 2010 to create a Sky-style subscription bundle for news publishers online. News Corp invested £20m in the project but pulled the plug after rival titles had concerns about working with it on the scheme.
Young, who is today working on a new payment technology for news publishers, believes the news industry has to work together to counter the threat posed by Google and Facebook. Together the two giants are expected to take more than 70 per cent of the money spent on digital advertising in the UK by 2020.
Young said that this makes it almost impossible for anyone to build a journalism business based around consumer advertising online.
He said: “If we give up control over our work, we also lose control over how people find and consume it and we lose the economic benefit that we should get when people consume it – then the economics of creativity and journalism become very difficult.
“The right way for Google and Facebook to work is with permission and under terms that have been agreed with publishers. They need to make room for innovation and content creation.
“Yet people let Google and Facebook take our products, turn them back into raw content and exploit them any way they see fit without permission, payment or any control. That way only bad things can happen.”
Asked why news publishers don’t seek to enforce their copyright more forcefully when it comes to it being shared on Facebook and used by Google, he said: “In America, where these things tend to be decided, the definition of fair use has been rather broad.
“Newspapers in particularly also have a very strong link to the idea that they should try to reach the biggest possible audience.
“They don’t want to disappear, but I think they should have more confidence in their products.”
Young, who is also a former chairman of the Newspaper Licensing Agency, said: “Publishers need to start to set the agenda, rather than going cap in hand to Google and Facebook asking them to modify what they do. Their fundamental principle is they pay nothing and they get more than nothing. When they do that at scale they make billions and billions of dollars.
“Media companies need to rally around the idea they can set the terms under which they want to operate and be brave about doing that.”
Young is himself currently working on a media start-up which has the working title Agate, and which seeks to provide a payment option for news publishers which lies in the middle ground between free and subscriptions.
He said: “We need better models for consumers. My project is not a subscription product, it’s a really, really easy way to pay.
“Finding a really good way for of getting consumers to pay for your product is a much more sustainable model.
“Media consumption is casual, it’s a lot of small decisions. But the current financial models in place don’t accommodate that.
“Google and Facebook solve problems by trying to own the whole value chain and then dominating it. That’s not a good place to be.”