Google, Facebook, and other online media have built staggering revenue streams, in part, on the back of insights gleaned from users reading and sharing news articles. Now, Google says it will give news publishers revenue-sharing deals similar to those it grants YouTube personalities and third-party ad hosts – helping them connect with likely subscribers, then taking a percentage of their earnings in return.
Speaking to the Financial Times, Google’s head of news Richard Gingras said Google would likely take a cut of less than 30 percent of subscription revenues. Given Google’s power to target audiences, the plan could amount to a huge windfall for paywalled outlets like the New York Times and the Financial Times itself.
Those publications, along with News Corp, were part of discussions about subscription marketing announced last month. Google at the time said it would use new artificial intelligence tools, along with its existing trove of user data, to reach likely subscribers. The resulting tools, Google said, would become available to other publishers as well.
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Perhaps equally important for publishers, Gingras says Google is committed to maintaining the independence of the publications it helps sell. “Unlike other participants in the environment, we’re not trying to own the publisher . . . we don’t want to own the customer,” he said.
Gingras may have been referring to Facebook, Google’s main competitor for online advertising dollars, which is testing its own news subscription tool. While Facebook’s program will apparently use its internal Instant Articles section to entice readers to subscribe, it will reportedly send readers directly to publishers for subscriptions, so Gingras’ comments may not be entirely fair.
Regardless, that both Google and Facebook are angling to cement positive and lucrative relationships seems like good news for publishers, and for journalism. Newspapers and magazines have spent more than a decade now hemorrhaging revenue, staff, and reach thanks to the collapse of print advertising, but recent outcry about the spread of “fake news” may have motivated Google and Facebook to provide more support to trusted publishers.
Digital subscriptions have already helped prestige papers like the New York Times and Washington Post reverse that trend somewhat, but getting the web’s largest news portals on board could trigger a much broader revitalization.
Article source: http://fortune.com/2017/10/22/google-subscription-revenue-news-outlets/