Google is struggling to persuade some of America’s largest publishers to sign up to its News Showcase aggregation scheme, an investigation by Press Gazette has found.
Armed with a $1bn budget to pay publishers for the use of their content, Google unveiled Showcase nearly 15 months ago.
- December 22, 2021
- December 10, 2021
- December 2, 2021
The programme has gone live in 14 countries and has more than 1,000 publication partners, including leading titles in the UK, Canada, Australia and Germany.
But the service has yet to launch in Google’s native, and most important, market – the United States.
Press Gazette understands that Google started making approaches and contract offers to US publishers over the summer. Some were told by Google that News Showcase would launch in the US by the end of 2021. This start date has since been pushed back to the first quarter of 2022, according to news industry sources briefed by Google, but some publishers now believe it could be postponed further.
Why the delay? An investigation by Press Gazette, based on conversations with ten sources from the US news industry, has found:
● Several large publishers are underwhelmed, and some “offended”, by Google’s Showcase payment offers
● Major metropolitan news brands are being offered as little as $200,000 a year to partner with Google – sources we spoke to said the payments should be five, ten or 20 times the size
● Publishers are concerned by a contract clause stating that they agree Google does not owe them any money for their content beyond Showcase payments
● Publishers are sceptical about the quality and discoverability of Showcase, doubting its potential to help them find new readers and subscribers
● Some publishers have flatly rejected Showcase, believing that US laws will soon be changed to allow them to collectively negotiate with Google and strike more lucrative deals.
Most of Press Gazette’s sources spoke on condition of anonymity. As we revealed in a previous investigation, ‘Google News Shh-owcase’, confidentiality agreements forbid publishers from speaking about their negotiations with the search engine giant. News companies also fear damaging relations with their most significant financial partner.
We spoke with senior sources at eight US news publishers – three covering national news and five large local/regional outlets – that have been approached to join Showcase.
Three local publishers indicated that they would not be signing up unless Google’s terms change dramatically. One source at an outlet that covers national news said it looked “increasingly unlikely” that they would become a Showcase partner. The other four sources said that, around six months after Google started making US Showcase offers, talks are ongoing.
David Chavern, president and chief executive of the News Media Alliance, summed up the view of the industry, telling Press Gazette: “I haven’t heard of anyone signing up (other than News Corp). We don’t know what has been offered but we have heard that the compensation is absurdly low, particularly given the hassles of the News Showcase product. Google is an absolutely dominant counter-party, after all.”
What is Google News Showcase?
First unveiled by Google on 1 October 2020, News Showcase is an aggregation platform that allows users to browse and follow different publications.
In exchange for a fee, publishers are responsible for maintaining short, low-maintenance newsfeeds, or panels, on the platform.
Publications that have an online paywall are paid also to make some of their content free to Showcase users. After a certain number of articles, readers are prompted to sign in to a publisher’s website, and later they are encouraged to buy a subscription to the site.
As well as being paid for their participation, publishers have the potential to attract new readers through the platform. For paywalled websites, News Showcase represents an opportunity to sign up new subscribers.
As reported by Press Gazette in September, many publishers have been told that their non-negotiable Showcase contract values are determined by a strict, globally-consistent formula that includes audience size, content volume, subscription prices and newsroom costs.
In theory, News Showcase sounds like a good and fair opportunity for publishers to be paid for their content while attracting new readers and subscribers.
In practice, while several publishers have made positive public comments about Showcase (usually through Google press releases), most news industry sources spoken to by Press Gazette – for this US-focused article and for our previous global investigation – have been disappointed or frustrated by the scheme.
1. ‘It’s a product issue’
Sources at three publishers already on News Showcase outside of the US have told Press Gazette that the service has so far proved ineffective at driving website traffic. This suggests that Showcase has struggled to establish itself among news readers. Publishers have also spoken of “bugs” in the News Showcase system. Technical glitches and traffic issues have been reported on separately in Germany by Netzpolitik.
“They’re having problems with the product,” said a senior source at one large international publisher that is a Showcase partner. “Discoverability is the big issue. Everyone’s pouring their hearts into [newsfeed] modules, but it’s hard to see them in the wild.”
Even if Google does fix these technical issues, another source – an executive at a large US regional news business that has so far rejected Google’s partnership offer – doubts that Showcase will work well for publishers.
“We hear the product is not doing well in other markets,” the source told Press Gazette. “People go to Google News for a high density of news headlines. So, they say, ‘Here are some [newsfeed] cards from different publications.’
“But there’s nothing to indicate that consumers want that. People go to Google for lots of headlines. People come to our website for our view and insight into things. So it’s a product issue.”
The same source was not convinced that Showcase, in its current form, would drive readers or subscriptions for local publishers.
“Google sincerely say they want to help with subscriptions,” they said. “But it’s Google saying: ‘I know better than you.’ And they don’t. They’re taking a very East Coast – New York Times, Wall Street Journal – view on it. They’re looking at it as a big, global platform.”
2. ‘Offensive’ payment offers
Even with Showcase’s apparent product issues, more than 1,000 publications across the world have signed up to the scheme.
Many non-US publishers spoken to by Press Gazette effectively view Showcase payments as free money. This is particularly true for publishers with free websites. They are being paid by Google to maintain a simple newsfeed and are not sacrificing any content that would not be freely accessible otherwise.
For several reasons, large US publishers spoken to by Press Gazette have taken a different view on these offers.
The boss of one major local news publisher, which has rejected Google’s approach, described their Showcase talks as “a bit of a waste of time”.
“The dollar amounts they started with were so low they were offensive. Especially when considering the news coming out of Australia.”
The source said that many in their industry have been disappointed by the disparity between reported deal values in Australia and the amounts they have been offered by Google.
They pointed specifically to News Corp’s global deal with Google, which is centred on Showcase but includes ad revenue sharing arrangements and investments in audio and video journalism.
“Google has been very clear that our deal is News Showcase only,” the source added. “YouTube money was not on the table for us.”
Press Gazette’s US news industry conversations suggest that large metropolitan daily news organisations are being offered as little as $200,000 a year to take part in News Showcase.
One local news executive said they would have expected their offer to have been five times larger. Another suggested ten or 20 times larger would be appropriate.
“Everyone’s feeling quite offended,” said one. “I would be very surprised if any newspaper in a top 20 market ever inks a News Showcase deal.”
The other was more sympathetic to Google and appreciates the tech giant’s intentions. “This is not Google trying to screw us over,” the source said. “They sincerely want it to work. This is a lot of money to spend on a product that might not work.”
One of the reasons large US publishers can be picky with News Showcase deals is that many have built up large digital subscription businesses.
This means that, compared with many of their peers overseas, they are on solid ground financially and are not in desperate need of extra cash. It also means that publishers are wary of giving away their paywalled content for below-market prices.
The source above said: “We don’t want to make a big hole in our paywall for people to access our content for free. And Google is not offering enough money to compensate us for that. The cash isn’t enough.”
A senior source at one publisher that covers national news said larger outlets are also frustrated by negotiations with Google. They described their Showcase offer as “giving away a ton of value for not a ton of money” and said it looks “increasingly unlikely” that they will agree a deal with Google.
A source at another large metropolitan daily news group said that their publisher has “had several conversations” with Google but is “not close to making any deal as we just can’t imagine the numbers would make sense for us”.
3. The concerning clause
Another large issue some publishers have with their News Showcase offers is contained within the small print of Google’s contracts.
A clause in the standard US Showcase offer document is understood to state that publishers, by accepting Showcase money, are agreeing that what they’re being paid is fair remuneration for everything they do with Google relating to their content.
This characterisation is at odds with the views of many publishers across the US, and the world, who believe that Google should pay them for the use of news content on search and other services.
In theory, publishers could still sign the contract, accept Showcase payments and then pull out when other cash-for-content payments become attainable.
But some in the industry feel uncomfortable signing statements they do not agree with. They also believe that doing so could undermine future monetary claims against Google.
What happens now?
The US launch of News Showcase has already been delayed. When the tech giant approached publishers in the summer, some were told that the product would go live before the end of 2021.
Press Gazette reported in September that this date was likely to be pushed back to the first quarter of 2022. Now, some in the US news industry expect it could be delayed further.
A source at one local news publisher that refused to sign up predicted Showcase may never launch in the US.
This seems unlikely. Showcase partners already include the Wall Street Journal, Barron’s, MarketWatch and the New York Post – which are covered by News Corp’s wider deal – while Reuters has also signed a global agreement.
Google should also have the resources to add more high-profile titles.
The tech giant is understood to have shown some flexibility in negotiations with the nation’s largest news organisations. In other words, it appears willing to attach Australia-style add-ons to Showcase deals for America’s national publishers.
Google has shown less, or no, flexibility with large metropolitan daily news groups. But it could achieve wide local coverage by agreeing large-scale deals with chain regional news companies like Gannett. (Gannett’s UK operation, Newsquest, has signed up to the British version of Showcase.)
Regardless, several of the US news industry sources Press Gazette spoke to have already moved on from considering Showcase offers.
Instead, they are focused on the Journalism Competition and Preservation Act (JCPA), which if passed in Washington would allow publishers to collectively negotiate content payment deals with Google and Facebook. Several of our sources were increasingly confident that the JCPA will be enacted within the next year or so.
“Google is probably too arrogant to believe that the JCPA will pass,” said a senior source at a major US news publisher. “But there is a lot of energy behind it. On both sides of the aisle.”
What does Google say?
“In just over one year we’ve launched News Showcase in 14 countries,” a Google spokesperson told Press Gazette in response to this investigation.
“The overwhelming feedback we’ve received about the product from our partners has been positive; they report that it has helped them deepen their relationships with readers and engage their audiences.
“To date, over one million News Showcase panels have been created by News Showcase partners globally and readers have tapped the Follow button on News Showcase panels over 1.5 million times, showing they’re looking for more content from participating publishers.
“With more than 90% of publications signed up for News Showcase representing local or regional news, we’re looking forward to continuing to work with our publishing partners to improve their and their readers’ experiences.”
Google says it has not publicly set a launch date for News Showcase and so there has been no delay.
As a principle, Google says it supports journalism and is willing to pay to license news in depth where appropriate, but not for links or short extracts that accompany them.
In addition to News Showcase, Google offers financial support to publishers through Subscribe with Google – which aims to help news companies understand their audiences and grow reader revenue – and the Google News Initiative scheme, which offers training in digital skills and capabilities.
Since Google launched in News Initiative in 2018, it has worked with more than 7,000 news partners, and 450,000 journalists, in 120 countries and territories.