Robert Thomson, CEO of News Corp and digital platform critic, has been discussing the growing power of the digital platforms for over a decade, particularly their effect on publishers’ commercial prospects and the social and cultural implications of this power.
“There’s no virtue in victimhood; it can’t just be a matter of complaining,” he said during a session on March 21 at Advertising Week Europe in London. “We raise these issues to try and change the landscape, for commercial reasons and because of the social consequences. It has to change.”
Here are takeaways from the session, edited for clarity.
Platforms lack self-awareness
While Thomson said self-regulation makes sense based on the size of the platforms, they don’t have the self-awareness needed to do so.
“[Alphabet and Facebook] have to be more compliant. They have been in a state of denial, particularly Facebook,” he said. “Mark [Zuckerberg] finds it very difficult to say ‘publisher,’ but he is a publisher, and a lot of what they are publishing is reprehensible.”
Thomson acknowledges that Google is trying to create products that align with publishers’ business models through its subscription product, but he said it’s “not quite right around the data and price, so we’re not participating.” Eliminating First Click Free also shows the platform is starting to address issues affecting publishers.
Carriage fees could become reality
Along with Rupert Murdoch, media companies like BuzzFeed believe platforms should pay publishers to host quality content on their platforms, similar to the carriage-fee systems of cable TV. The danger with this is the power the platforms could have over content distribution if publishers become too reliant on the revenue kickbacks. Thomson, however, is a fan.
“Here’s a way of getting trusted publisher content on the platform and a way of tailoring the service for a Facebook user,” he said. “This has had the usual criticism that we face, but it’s a very realistic concept.”
Subscription and ad models can coexist
Building successful advertising and subscription models is difficult to do well: People who pay for subscriptions are often put off if they still see ads. News UK’s subscription revenue is increasing while its print ad revenue declines, but in its most recent earnings call, Thomson said the U.K. newspaper operation had its first quarter of advertising growth in 27 quarters. The publisher is learning how subscriptions and advertising can work together.
News IQ, the publisher’s new ad platform available in the U.S., is News Corp’s attempt to understand and collect its audience across brands, which in turn will help improve the publisher’s distribution, typically where the platforms have had the upper hand.
“From an advertising perspective, you have permission data, place and provenance,” Thomson said. “When there is insecurity about where ads are placed, we can genuinely offer demographic data and experience that we can authenticate.”
Lack of clarity on algorithms
Since Google ended its First Click Free policy last October, the search engine has been indexing Wall Street Journal pages again. According to Thomson, traffic has surged in the last two weeks. When the publisher asked Google about it, the platform said there was a problem with the algorithm. “You get the sense it’s the algorithm running the algorithm,” Thomson said. “They can’t or won’t tell you why. Those platforms are seemingly objective but innately subjective.”
Encouraging younger audiences to pay
There’s much debate around whether younger people are willing to pay for content. While there’s more publishers can do to encourage this, working with platforms to provide subscription services will help change the whole ecosystem.
“We’re arguing self-interestedly for Google and Facebook to provide subscription services,” said Thomson. “As more defined subscription experiences become more common, the expectation of what’s free and what’s paid for will change again over five years.”