Google developing tools to boost news publishers' subscriptions
Alphabet's Google is developing new tools designed to boost
subscriptions for news publishers, following a similar olive branch from
Facebook to an industry that has seen the digital behemoths take over the
online advertising market.
Google’s latest foray arrives on three fronts. The first is
a revamp of its feature, called “first click free,” that allows readers to
access articles from subscription publications through search. Google is also
exploring publishers’ tools around online payments and targeting potential
subscribers. It’s all part of Google’s broader effort to keep consumers and
content-makers returning to the web, the lifeblood of its ads business.
Initially, Google is testing the tools with New York Times
and the Financial Times. But Richard Gingras, Google’s vice president for news,
said the search giant is talking to dozens of other outlets as media companies
move toward online subscription models.
“It’s clear from news publishers that they can’t live on
advertising alone,” he said. “But it’s also clear that we’re seeing a shift in
a market.”
Media companies are focused intently on online subscriptions
as print ads shrivel and digital ad spending consolidates with Facebook and
Google, which together this year will garner more than 60pc of the $83bn
market, according to EMarketer.
In response, both digital platforms, which have rocky
relationships with publishers, are introducing products catered to them.
Facebook said last month it was working to add subscription tools inside its
Instant Articles program, which hosts news articles in its mobile app.
Google’s version, called Accelerated Mobile Pages or AMP,
enables news websites to load more quickly inside of search. With the new
tools, Google is looking at ways to let publishers identify who may subscribe,
determine how much readers would pay and speed up the process.
Mr Gingras said the new effort would involve Google’s mobile
payment services and its gargantuan ad targeting apparatus, although he didn’t
offer specifics.
“This is an area, clearly, where our knowledge about our
users can be brought to bear,” he said. “There is no singular subscription
strategy that will work for each publisher.”
Mr Gingras declined to say if or how the company would be
sharing revenue with publishers. Kinsey Wilson, an adviser to Mark Thompson,
president and chief executive officer of The New York Times, said the media
company hasn’t discussed revenue terms with Google yet.
To date, publishers have favored Google’s mobile publishing
tools, which run on the web using open-source software. “Facebook’s environment
is a Facebook-hosted walled garden,” Mr Wilson said. The social network,
however, tends to be a far bigger driver of web traffic and, thus, an
irresistible partner for the media companies.
Some publishers with subscription paywalls are concerned
about Google’s search policy. If publishers sign up, they can bump up their
articles high in search results, which otherwise bury pages that can’t be
accessed for free.
In return, they must give non-subscribers access to at least
three articles a day for free. Right now, Google and the New York Times have
been testing ways to drop that number down, Mr Wilson said. The product changes
are expected to come next month.
“Early results are that there is some flexibility here,” Mr
Wilson said. Sales from subscriptions gained 13.9pc for his company during the
second quarter while ad revenue rose 0.8pc.
News Corp’s Wall Street Journal dropped out of Google’s
first click free program in February. After the newspaper ended the program,
subscriptions ticked up, but traffic from Google fell off a cliff. The
publisher told Bloomberg News that the policy “discriminated” against paid news
sites.
Mr Gingras said the policy was designed to help publishers
while providing search users accessible information. “They chose to go down
that path,” he said of the Wall Street Journal. “They were aware of the
possible risks of doing so.”
In an earnings call earlier in August, News Corp CEO Robert
Thomson told investors that the company was working with both Facebook and
Google on digital subscription products.
