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Google reportedly developing revenue-split system for news outlets

November 7, 2017
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Posted by Annie-Mai

Google is reportedly planning a new system of revenue sharing that would help news publishers target prospective subscribers in exchange for a split of the income generated by these new paid subscriptions. The company warns, however, that any such plan won’t be ready for official release anytime soon.

According to a recent report in the Financial Times, Google has been working with major media outlets for some time about the prospect of modifying its existing ad targeting system to help publishers reach new subscribers. In the Times article, Google’s vice president of news Richard Gingras said that any deal the search giant struck with news outlets would likely be far more generous to publishers than the company’s existing ad-sharing model, which directs 70% of earnings to partner websites.

Earlier this year, Fortune reported that Alphabet, Google’s parent company, has generated billions of dollars per quarter from Google and YouTube advertising. Fortune estimated that Alphabet and Facebook, its chief advertising rival, are set to account for an estimated half of all internet advertising revenue globally. Putting this kind of power and influence to work, with a share of earnings greater than 70%, could mean a huge financial windfall for struggling publishers.

For more than a decade, print news has suffered due to the rise of digital media, enduring heavy losses of staff, revenue, and influence. While online subscriptions and readership have provided a boon for prestigious publications like the Washington Post and New York Times, a revenue-sharing deal with Google could help launch a much more widespread revival in journalism.

The Financial Times, the New York Times, and News Corp have reportedly been in talks with Google regarding subscription marketing, according to another article in the Financial Times, published in September. At that time, Google said the company would develop new artificial intelligence tools to complement its existing store of user data in order to target potential subscribers. Once that system had been fully developed, Google would make those tools available to other publishers.

However, Google spokeswoman Maggie Shiels cautioned that while the company plans to be “very, very generous” to publishers in shared subscription revenue schemes, there is currently no timeline for the release of such a program.

In an email to Gizmodo, Shiels said, “We haven’t worked out these figures. We have to talk to publishers. We have to build everything.”

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