DMG Media chief executive Rich Caccappolo has said that monopoly lawsuits against Google and the prospect of new UK tech regulation could bring huge benefits to news publishers.
In August, a US judge ruled that Google’s $26bn-plus annual payments to companies like Apple and Samsung to secure prominence for its browser were illegal and monopolistic. A second US case, which began on 9 September, argues that Google created an illegal monopoly in the world of adtech – harming publishers and advertisers.
In the UK, Google, Facebook and other US tech giants are facing tougher regulation as a result of the Digital Markets, Competition and Consumers Act, which was passed in May.
Speaking at the Press Gazette Future of Media Technology Conference in London this month, Caccappolo said he expects the major tech companies in the UK media market to get designated as having “strategic market status” by December this year, with new rules likely to be put in place by the Competition and Markets Authority governing their behaviour by next August.
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He said: “Unfortunately, I think that we as publishers are not doing enough. We’re sort of sleepwalking and waiting to see what comes out of it, instead of being there every day, knocking on the doors, arguing about what should be in there.
“It’s not just payment for content – and by the way, whatever the payment for content is, it’s not going to be enough to save us. The way that the payments get allocated needs to be decided, whether it’s number of journalists, number of stories… and the ramifications to that have to be understood.
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“It could be so much more though. We should have a role in understanding when changes are coming and how they’re going to impact us.
“We should have a role in saying that they impacted us, perhaps unfairly, like this thing that’s killed off white labels for publishers in the most recent Google algorithm update [which, in June, stopped discount vouchers advertised by publishers from appearing in search].”
Reach chief executive Jim Mullen has also spoken out about big tech in the past week, arguing regulation is needed to ensure free, advertiser-funded online news can thrive.
Google monopoly cases mean ‘things are going to get sold off’
On the subject of the monopoly cases against Google in the US and elsewhere, Caccapoulo said: “There are going to be things that get sold off. There are going to be changes in the way money flows. There’s going to be investment, private equity and venture.
“We’re going to see new browsers, new search engines, new ad servers. And those of us in the space who have traffic are going to be key partners for these new initiatives. This is a chance to fix a lot of of things that are bad in our space.
“But the fights we choose, the options we make, the decisions we make, are going to have an effect on us, not just this year, but long term, and they will affect our fortunes and our ability to survive.”
DMG Media revenue and profit up
The Daily Mail and Mail Online boss said the company had finished up its financial year, which runs to the end of September, in a “strong” position. Last year DMG Media parent company DMGT reported adjusted pre-tax profit of £41m on turnover up 2% to £997m. Consumer media revenue fell 5%, largely due to a hit to advertising revenues.
On this year’s figures, which won’t be published until next February, Caccappolo said: “We’ve grown our revenue, we’ve grown our profit, and we made some changes that I think are really crucial to our long-term sustainability and success.”
Asked about the success of Mail Online’s partial paywall, launched in January of this year, he said the revenue contribution was “fundamental” but declined to be drawn on exact numbers for subscribers.
He said the Mail Online subscription, coupled with expansion into podcasts and original video on Youtube, had made DMG Media a much “healthier” and more “diversified” business”.
“We rolled out a subscription product, actually a subscription platform, and there’s an important differentiation there. It’s a product with the ability to test pricing, to test bundling, to test ads on, ads off.
“We’ve still got 1,000 to 1,500 free articles we do every day. Ten or 15 of them would be what we call ‘more from the Mail’.
“Those are available as part of a membership or subscription. And that has worked really well. We haven’t lost the traffic, and we have a very large number of people who are subscribing, and the churn rates are lower than we anticipated, so we’re really excited about it. It is a foundational component of our revenue. It’s very profitable.”
He added: “It changed the way we think about content, the value of content. It changed the way newsroom plans their day. It gives us feedback into what people are are interested in reading and what is good enough for people to pull out a credit card.
“This was an initiative that crossed over functional areas and I’m really proud of how we did that. And I mean, if you launch something like that and it works, it raises the morale, gives everybody a sense that we can do big things.”
Attribution for publishers on ChatGPT will bring revenue for news publishers
Caccappolo said DMG Media has no current plans to sue ChatGPT and other AI companies for using its content without permission but confirmed that it does block AI scrapers from accessing its websites.
However he said there was an opportunity for news companies to get paid by generative AI companies on the basis of attribution.
“You ask [an AI company such as Perplexity] for the news of the day and a response is given that’s five paragraphs long. We need to figure out how much of that came from each publisher, and they have to be attributed. And there is movement to that, and we’re supportive of that and that’s going to happen.”
One AI start-up, Prorata.ai, has so far signed deals with major publishers such as the Financial Times and Axel Springer with a plan for revenue sharing based on attribution of this sort, although its platform has not yet launched.
Caccappolo continued: “When that happens, I think there’ll be this amazing rush to suddenly unlock, and everybody wants to be scraped, and it’ll be just like search today. We’ll all say: ‘Hey, how come my account’s not being used there?’
“I don’t think any amount of citation of the sources is going to drive a lot of traffic. I think that’s going to go away, but I think there’s a real chance at getting some attribution.”
Google Privacy Sandbox could be a good thing for publishers
DMG Media was among the publishers arguing against Google’s plan to ban third-party cookies on Chrome at the end of this year and replace them with its own Privacy Sandbox technology.
Caccappolo was asked by Press Gazette whether Google’s July decision to keep cookies and instead introduce a new experience on Chrome which allows users to make an “informed choice” about privacy was good or bad news for publishers.
“We were concerned that if it went live and cookies were retired, that it would be practically unviable,” he said. “We worked with other publishers, with Google themselves and with the CMA, and we showed that it wasn’t ready. It couldn’t be done…
“I actually hope that they continue to work on it [Privacy Sandbox] because I think it is an important alternative, because when cookies go away there is not going to be one solution there is going to be five, six or seven solutions and one of them is going to be Sandbox.
“I had a meeting this week with a bunch of publishers in our office and Google talking about Sandbox. I hope it continues.”
He said one of the benefits of Sandbox was that it offered a way to attribute the success of advertising to publishers.
“One of the big mistakes we made is that we allowed ourselves to be a commodity. We allowed our inventory to be bought at scale, cheap, and part of that was that we never put in place an attribution engine to close the loop.
“People buy Meta, they pay £1, they believe they’re getting £1.20 in return… We, as publishers, were never big enough to solely to do that.
“I think that we should band together and do that. I think Google Sandbox, if you look at it underneath, had a lot of attribution and measurement that I think we can use as an industry. So I hope it goes forward, and I hope Apple adopts some of it.”
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