Digital News Publishers Association claim against Google that “the website publishers only receive 51% of the advertisement spend by the advertisers.”
To find, report and deliver news to readers online, digital news companies in India are required to spend a considerable amount of money. There’s a lot of human resource involved along with investments on tech platforms in the online content creation and news business.
There’s no denying that online advertisements are the bread and butter for any media firm as the main product– i.e. content– is mostly offered for free.
Now, you must be thinking that it’s a fairly simple business model where news is delivered online for free, readers click on it to read them and hopefully interact with the advertisements as well on the web page. In turn, depending on the popularity of the website, advertisers pay money to media firms for their ads to gain visibility. This is how online companies used to operate a decade back or at least how it was expected to function.
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But when we talk about advertisements, how can we ignore the world’s largest online advertisement company— Google. Of course, it’s also one of the largest tech companies but its bread and butter is also advertisements, just like news companies.
Now, with Google entering the Newsentertainment business the stakeholders of media companies had already predicted whatever is written above in the past. But what they may not have comprehended in the past is that Google will move so quickly to essentially try to become the ‘god father’ of the online business.
“Google is the major stakeholder in the digital advertising space, and it unilaterally decides the amount to be paid to the publishers for the content created by them, as well as the terms on which the aforesaid amounts have to be paid. As an illustration, the Informant (DNPA) alleges that Google has unilaterally decided not to pay the publishers of news for the snippets used by them in search,” the news body said in its complaint to the Competition Commission of India (CCI).