Study: Tech's Market Power Creates Disadvantage for Local News

RADIO ONLINE | Monday, May 10, 2021 | 10:10am CT

Radio and television stations are not adequately compensated for their news content on technology platforms because of an imbalance in market power, according to a new study released today by BIA Advisory Services. The study found that each year broadcasters lose nearly $2 billion in value that they generate for two of the largest technology platforms through publication of their valuable content - particularly local news.

The study, "Economic Impact of Big Tech Platforms on the Viability of Local Broadcast News," found that broadcasters do not receive fair compensation for their valuable local news content because of the substantial market power exercised by large technology platforms. These platforms leverage their market power to advance their own growth to the detriment of local broadcasters, putting a severe strain on the economics and viability of local news.

Commissioned by the National Association of Broadcasters (NAB), the study uses interviews with broadcast group executives and modeling of high economic impact practices to analyze the use of broadcast content on major technology platforms. Focusing on Google Search and Facebook News Feed, the study found local broadcasters suffer an estimated total annual loss of $1.873 billion by providing their content to these platforms.

The study further concluded that no technology platform allows broadcasters to earn equitable revenue based on current practices, and algorithms do not properly weigh local broadcast news, which intentionally and unfairly undervalues broadcast content in search queries. Additionally, the study noted that broadcast content and local news are often included in search returns and news feeds alongside questionable sources and disinformation, which could diminish trusted broadcast brands and confuse users.

"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," said Rick Ducey, managing director at BIA Advisory Services. "The growth of these platforms presents the potential for substantial future harm to the industry if not constrained by government action."

"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," said NAB President and CEO Gordon Smith. "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. Preserving quality, trusted journalism in communities will require policies that ensure broadcasters are fairly and justly compensated for their valuable content."

As part of NAB's annual State Leadership Conference, local broadcasters from across the country will be advocating on Capitol Hill this week on issues affecting the broadcast industry, including the overwhelming competitive power of digital platforms and the impact on Americans' access to quality local journalism.