Facebook recently unveiled its “News Tab,” a feature that will promote to the social network’s users news articles from a hand-picked collection of news-media outlets.
Facebook says it created the feature because “we want new forms of journalism in the digital age, including individual, independent journalism, to flourish.”
In exchange, some of the participating news outlets will be compensated for their content, receiving up to $3 million a year. The social-media giant rolled out the News Tab to a limited subset of Facebook’s 2.5 billion users; the company hopes to expand the feature so it’s available to more people by early 2020.
While the News Tab isn’t a bad thing in and of itself, it doesn’t address a larger issue that’s long festered between Facebook and the news business.
Journalism is in crisis and has been for decades. Since the launch of Facebook in 2004, the number of U.S. newspaper employees has dropped by more than half, according to the Bureau of Labor Statistics. Over the same period, the country has lost about 20% of its local newspapers, leading to the emergence of more than 900 communities that lack local news outlets — dubbed “news deserts” by researchers.
The demise of the news business is a story that’s familiar to many. Runaway consolidation within the local-newspaper market has contributed to this crisis, as have venture-capital privateers with names like Alden Global Capital and Fortress Investment Group that have purchased more than 1,000 local-news outlets before stripping them of their assets, flipping them and moving on.
But the dominance of platforms like Facebook and Google, which control more than 60% of digital-ad revenues, has undercut the industry as well.
Through the 20th century, one-to-many mass-media technology allowed a handful of gatekeepers to control the production and distribution of news while reaping the rewards of the advertising marketplace. In the digital age of many-to-one media, the dominant gatekeepers have aggregated third-party content that can be tailor-made to suit individual users. These companies, with very few exceptions, are in the tailoring business, attempting to serve you content based on what they glean from your online activities and preferences. By their own admissions, they aren’t in the business of producing news.
This leaves us as a society with a tough decision: Do we think it’s worth supporting news production and distribution in the 21st century in the absence of a viable commercial market?
To many, the answer appears to be obvious. Poll after poll has shown that U.S. taxpayers support publicly funded media. And that’s been the case since 1967, when Congress passed the Public Broadcasting Act, which established the Corporation for Public Broadcasting and, eventually, PBS and NPR.
As powerful online platforms dominate new media and audiences become more diverse, we must revisit public broadcasting’s original vision and rewrite the policies to support the digital production and distribution of noncommercial news. We need a deeper solution than anything online platforms can provide, one that seeks to build a revitalized and resilient news sector.
Earlier this year, Free Press Action President Craig Aaron and I published a report calling for a tax on targeted online advertising to respond to the crisis in journalism and fund diverse, local and independent news and information.
For example, an annual 2% tax of online enterprises of a certain scale would yield nearly $2 billion for a new and independent Public Interest Media Endowment.
Endowment grants could underwrite local-news startups and civic-engagement initiatives, or fund new experiments in investigative reporting and newsgathering. They could also provide tax credits and other incentives for news organizations to cover neglected communities, including those in news deserts. Grants could help incubate noncommercial social-media platforms that serve users without harvesting their data for targeted advertising.
“Think of it like a carbon tax, which many countries impose on the oil industry to help clean up pollution,” Aaron and I write in the report. “The United States should impose a similar mechanism on targeted advertising to counteract how the platforms amplify content that’s polluting our civic discourse.”
Levying excise taxes on harmful products and activities like gasoline, cigarettes and gambling isn’t a radically new idea. The proceeds from these sorts of taxes help fund infrastructure, school and welfare initiatives. Taxes on legalized marijuana in Washington state yield hundreds of millions of dollars each year for public health, education and research, among other programs.
It’s debatable whether targeted ads yield much social value, and Facebook’s decision to allow politicians to blatantly lie in their ads illustrates how dangerous these ads can be. But taxing online advertising to support independent journalism is a way of addressing multiple market failures.
While this approach won’t solve all of the problems surrounding platforms or journalism, a platform-ad tax is a winnable fight in Washington, D.C. Already a number of presidential candidates are giving our proposal a look. U.S. Sen. Bernie Sanders brought it up as part of his media-policy platform unveiled at the end of summer. It’s also being considered by prominent members of Congress.
Facebook’s News Tab could be a nice widget if it lifted quality news and in-depth reporting above the static of social networks, but let’s not pretend it’s a solution to a larger systemic problem. If we want to get serious about reversing journalism’s downward spiral, a digital-ad tax is a good place to start.