Alphabet’s Google Open to Sharing Revenue with News Publishers for Subscriptions

Google News subscription tools

Google’s head of news, Richard Gingras, recently told the Financial Times that the company was willing to concede to a certain extent with respect to subscription-based news publishers that were willing to use Google’s own subscription tools. The concession will be in the form of a revenue-share, where formerly, news publishers that had a paywall were generally ranked lower than free-to-read sites.

There are several angles to this move.

The first is that subscription-based news services and Google have been at loggerheads for a long time. A few years ago, Spain took action to favor publishers by introducing a “Google Tax” that the company had to pay publishers for linking their content. Germany had done something similar the year before. And the feud is an ongoing one.

The second angle is the fact that this is a mutually beneficial relationship that hasn’t been properly nurtured so far. Google gets the quality news content it needs, and the publishers get pre-monetized Internet traffic to their content. So far, the only monetization method that the publisher can exploit is through renting out advertising space to companies like Google and other ad networks or direct advertisers. Other than directly offering subscriptions to its potential readers, of course, like the Wall Street Journal, Financial Times and other publishers do.

The third point is that this will bring some sort of parity between news publishers with subscription services, and other publishers that have the kind of quality content that readers are willing to pay for, but haven’t implemented any sort of paywall, like The Guardian, for example.

There’s little clarity about how this will work, but Google’s machine learning capabilities will essentially be able to track subscription signups and renewals through its own system, and then hold back a share of revenue. According to Gringas, the commission it takes on these subscriptions will be less than what it currently takes as its share of ad revenues, which is 30%.

There are still several hurdles for Google to cross before this plan can become reality. For example, there has to be collective buy-in from larger publishers. Moreover, Google will have to assess the impact of paywalls on content that may have previously been free, since a lot of non-paywall publishers are going to want to take advantage of Google’s subscription services as well.

Google is clearly not ready to roll out this initiative at this point. It would appear that the company is merely testing the waters by announcing its intent.

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