Mannheim, September, 04th, 2024. A recent study conducted jointly by ZEW Mannheim and the University of Technology and Economics Budapest shows that social media and news providers can benefit from each other if news providers pay for the quality of their content and social media operators support them in this endeavour. Because of the news websites, potential readers are less likely to use the classic news websites of online journalism by publishers.
„If the operators of social media platforms paid the traditional news providers better, they would benefit in two ways: Firstly, such payments increase the incentives for better news quality – if journalistic content increases content quality, more people will also use social media. Secondly, this increases competition in the digital advertising market on both social media and news websites, which in turn benefits online journalism. In our study, we show that social media and news providers can also benefit from each other,“ explains Luca Sandrini, PhD, co-author of the study from the ZEW Research Department “Digital Economy”.
Social media benefit from the work of news websites. This is why news providers have so far been remunerated by social network operators. However, the study shows that compensation payments by social media providers are not worthwhile.
If publishers‘ demands are too high, content is banned from news websites and therefore from social media. Below a threshold value, however, there would be room for negotiation, as the study also shows.
The authors therefore suggest mandatory negotiations. „A system that links the amount of money paid to the quality of additional news created would be ideal – the higher the quality, the higher the payment,“ says Robert Somogyi, PhD, co-author of the study from the Budapest University of Technology and Economics.
In this concept, quality is an objective, measurable indicator, such as the number of full-time equivalents employed in a newsroom. Users often associate quality with positive attributes such as trustworthiness and information value, as the content produced by a news website with a larger editorial team usually offers better and more comprehensive coverage of local news and international events.
„This realisation is relevant for political attempts to ease the competitive pressure between platforms and journalism through legislation and should also apply to the EU market after the EU Copyright Directive of 2019,“ says Somogyi.
Model for optimised payments
The ZEW study uses a game-theoretical model of a two-sided market to analyse the effects of political regulations that stipulate payments from social media to publishers. The researchers look at the market environment in which consumers can consume news via social media and news websites and digital adverts are marketed.
Due to the considerable social importance of journalism, protecting the profession from the overwhelming competitive pressure of large digital platforms has become an important goal for regulatory authorities. Various political approaches are being pursued around the world to protect journalism, for example in Australia, Canada and Indonesia. Efforts are currently underway in the United Kingdom and New Zealand, as well as in the USA at national and state level. Following the introduction of the EU Copyright Directive in 2019, Google has started to sign licence agreements with news publishers in Germany and other European countries.
The text was translated with the support of DeepL Translator, a translation with artificial intelligence
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