Google under pressure as governments stand up for traditional media industry

The growth of online media has meant news organisations have a global reach, with a wider audience. But for many traditional media firms, the change in the media landscape over the past few years has left them struggling to survive.

As more readers turn to the web and there is greater competition among online news sources, print revenues are declining, and publications are struggling to find an online revenue model that generates enough revenue to replace it.

The result has been a consolidation in the media industry worldwide. In the search for something to blame, some have hit on search engines such as Google, which links to content on media websites as the culprit.

When News International decided to put up a strict pay wall for the Times and the Sunday Times, the editor of the latter publication said the internet could "wipe out" the publication unless it introduced charges.

Rupert Murdoch's media group opted out of allowing Google to index its articles for about two years before it reversed its decision in part. Now, Google's search listings can preview the first two sentences of articles - but the remainder remains behind a subscription.

In 2011, investigative reporter Bob Woodward was quoted by Poynter.org as saying Google's Eric Schmidt should have "I killed newspapers" written on his tombstone.

Governments are now starting to step in on behalf of struggling firms. In recent months, leaders in Germany, Belgium and France have called for action. French president François Hollande threatened to land the technology firm with a "link tax" to help boost struggling publishers. This, in effect, would be a charge on Google to link publish the snippets of a news story that appears on its news service.

The company has tried to pour oil on troubled waters. Last week, Google said it would contribute €60 million to a fund aimed at supporting French publishers in their digital endeavours, known as the Digital Publishing Innovation Fund.

It also pledged to work with French publishers to help increase their online revenues using Google's advertising technology.

"A healthy news industry is important for Google and our partners, and it is essential to a free society," Schmidt, the search company's executive chairman, wrote in a blog post.

However, he also got another point across, namely that Google also works in publications' favour.

"Google has worked with news publishers around the globe for years to help them make the most of the web. Our search engine generates billions of clicks each month, and our advertising solutions (in which we have invested billions of dollars) help them make money from that traffic," he wrote.

It was a similar case for Google in Belgium, where it reached a settlement in December - the culmination of a six-year battle that saw the firm blocked from publishing links to local newspapers in the region after a court ruling forced it to remove any articles from French and German-language Belgian newspapers from Google.com and Google.be or face a fine of €25,000 per day.

At the time, the managing director of Google Belgium, Thierry Geerts, said the company would like to work in a similar way with other publishers around the world, "that we can sit together and think together about how we can embrace the digital future".

Google, however, avoided having to pay to use the content, instead doing a deal to work with the papers on business initiatives and promoting the services of both the publishers and Google itself.

"This agreement comes at an important moment, in the midst of a debate how best the newspaper industry should adapt to the new digital age," Mr Geerts wrote in a blog post. "Instead of continuing to argue over legal interpretations, we have agreed on the need to set aside past grievances in favour of collaboration."

Battle in Germany

But while Google has settled these actions amicably, there is a battle looming in Germany. The search giant was called before a parliamentary committee there to discuss the proposed ancillary copyright laws for news media, known as Leistungsschutzrecht für Presseverleger, that would levy fees for using even snippets of articles, similar to the French proposals. This would mean that Google would have to pay to display search results from publishers covered by the law.

The hearing was another step in the process to decide if the proposals will make it into law. Even if Google manages to escape unscathed from that skirmish, Italy, Portugal and Switzerland are also making similar noises, and other countries are unlikely to be far behind.

The National Newspapers of Ireland, a body which represents 16 national daily, Sunday and weekly newspapers and 25 local and regional newspapers, said it noted with interest Google's agreement with the French government, but it was waiting for further detail before commenting fully.

"Broadly speaking, NNI would see this as an important first step and a welcome change of attitude on the part of Google in recognising publishers' rights," the NNI's Frank Cullen said.

"It demonstrates how the French government at the highest level values and supports the press and creative industries. It also shows how France adopts a more holistic approach to the media, and that is perhaps something we can learn from in this country."

The NNI said it welcomed any intervention that could bring about a similar engagement with Google Ireland and the Irish newspaper industry.

The group said it was awaiting "with interest" developments in Germany and at the European Commission.

However, it is not yet clear if Google will extend similar funds to other countries.

"We have many initiatives and partnerships in place around the world, and we are keen to continue collaborating," the company said in statement. "In addition, while the fund is aimed at Francophone projects, this does not exclude innovators, publishers from other countries with an interest in the French market."