Local Broadcasters losing $2B a year providing news to Tech platforms, BIA study says.

Radio and TV stations are not being fairly compensated for content, especially local news, provided to technology platforms such as Google and Facebook, according to a new study out today from BIA Advisory Services. The study, “Economic Impact of Big Tech Platforms on the Viability of Local Broadcast News,” commissioned by the National Association of Broadcasters and based on economic modeling to analyze the use of broadcast content on major technology platforms and interviews with broadcast executives, finds local stations are losing nearly $2 billion in value annually due to these platforms’ leveraging of their substantial market power to advance their own growth to the detriment of broadcast news.

In fact, the study concludes that no tech platform currently offers acceptable compensation for broadcasters, with “no viable revenue model from the platforms that pays or enables broadcasters to earn equitable revenue as shown in our economic models for Google Search and Facebook News Feeds under their current practices.” BIA’s analysis shows that not only do these platforms not properly identify local broadcast news content in search queries – often showing it alongside questionable sources and disinformation, which could diminish trusted broadcast brands and confuse users – the algorithms used fail to properly weight its value. The study also finds that Google specifically gains even more market power under the guise of user privacy.

“Radio and television broadcasters play a vital role in providing Americans with valuable news and information, shining a light on the events shaping their communities,” NAB President and CEO Gordon Smith says. “Unfortunately, this study makes clear that the competitive advantage of a handful of big tech platforms prevents broadcasters from recouping their substantial investment in local news, putting local journalism at risk.”

BIA confirms the importance of local broadcast news, citing findings from The Pew Research Center that local TV and radio stations remain leading sources of news, and that audiences trust local broadcast outlets more than any other platform, backed up by a Television Bureau of Advertising (TVB)-sponsored survey showing three-fourths (73%) of registered voters in ten battleground states trusted local broadcast TV news following the 2020 election. At the same time, nearly nine in ten Americans (86%) now get their news from a smartphone, computer or tablet, making search functions for local radio and TV news all the more important.

‘Put Up Or Shut Up’
Against this backdrop, BIA shows that the tech platforms “enable and compete with other producers for audience and advertising dollars and do so based on terms they create to favor themselves, such as with their use of local broadcasters’ news content.” What’s more, these platforms’ terms to broadcasters often are not negotiable in what executives see as a ‘put up or shut up’ digital environment. “Google is so integrated, they have it all,” one executive interviewed for the study says. “We can’t afford not doing business with them.” Another says, “The vast majority of our interaction with the tech platforms is whether or not to click on a checkbox on a page. There is no paper between us and Google. Just a click on some dashboard that gives Google the right to use our content.”

According to BIA’s estimates, annual lost value to local stations totals $455 million from Facebook News Feed, $1.29 billion from Google Search zero click, and $129 million due to improper local news algorithm weighting on Google Search. “Even though we focused our quantitative analysis on Google and Facebook, the market power of other platforms and services, such as Amazon and Apple, were cited as increasingly undermining the viability of local news media,” BIA Managing Director Rick Ducey says. “The growth of these platforms presents the potential for substantial future harm to the industry if not constrained by government action.”

The issue of digital platforms’ competitive power and its impact on Americans’ access to quality local journalism will be discussed by local broadcasters from across the U.S at this week’s NAB annual State Leadership Conference on Capitol Hill. NAB has set the stage for these arguments following comments submitted to the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law as part of an investigation of alleged antitrust violations by digital platforms, including Graham Media Group President and CEO and NAB Television Board Chair Emily Barr’s testimony before the subcommittee in March at a hearing titled “Reviving Competition, Part 2: Saving the Free and Diverse Press.”  Inside Radio