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Google Intends to Share Revenue with News Publishers

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Google told the Financial Times that they want to share revenues with publishers who take advantage of their new subscription tools.  Similar to its ad system, it would use machine learning know-how and a vast collection of user data to find potential new and renewing subscribers, and take a cut from sales when people take action.  Unlike ads, where Google would take up to 30% of the money, the terms would be significantly more generous, according to Google. Google denies the idea that they are trying to take control from publishers in light of Facebook’s new subscription service, which uses Instant Articles that run on its own site.

This is what Google told the Financial Times:

“We want to have a healthy ecosystem where we’ll benefit both as a society and with our business. We are still working it out, we’re not experts in the subscription business, but the rev shares will be very, very generous.”

Google isn’t announcing any final details just yet, so there’s no guarantee that every major publisher will even accept these terms.  What is clear, however, is that Google has come a long way from the days when they were feuding with publishers accusing it of profiting off their work with nothing in return.  Google is also downplaying the idea that they locked articles behind subscription paywalls unless publishers agreed to offer free access to at least three articles per day.  Now they’re dropping that hard and fast rule in favour of profiting when someone decides a story is worth a subscription.

The situation might not be quite as simple as Google says.  It is true that Google won’t have the same level of control as Facebook, it will still have considerable sway.  After all, Google may be the key to helping publications grow their subscription ranks.  If you’re a publisher, do you really want to turn down a possible competitive advantage when it comes from the world’s most dominant internet search provider?

The question for publishers is whether this is Google trying to insert itself in between the customer and the media business in order to draw in new revenue for itself.  Or whether its innovation in data use and artificial intelligence could still help revive the economics of the online news industry.  This debate comes at a time when tech giants are facing questions around the idea of fake news, and what kind of role they are playing in delivering it.

Google has indicated that they’re not planning on creating a subscriptions business, but there are still concerns about this move given the business advantage for Google to broker payments for digital goods.  To many, this feels like they are trying to become a middleman.  Which is what they’ve tried to do since Google Wallet.

Google hasn’t been as successful at goods or even subscription services when you compare them to Apple or Amazon for example.  Which is why they seem to be pushing this kind of business strategy.  Can it work?  Will it work? Once Google announces this program with more detail, we will know what their intentions are with it.