California has found a better path forward in the long-running battle between newspapers and the tech industry. Led by state Assemblywoman Buffy Wicks (D-Oakland), the state brokered an agreement that benefits California residents and journalists, while avoiding the unintended consequences of legislation adopted in Australia, Europe, and Canada, and being considered elsewhere in the U.S.
The agreement, which does not require legislation, sets up a News Transformation Fund, totaling $125 million over five years, to be jointly funded by Google, the California state government, and perhaps other tech companies. The fund, which will support journalism in the state, would be overseen by the UC Berkeley Graduate School of Journalism.
In addition to these subsidies, the agreement provides a framework for a privately funded “National AI Accelerator” that would help develop AI tools for journalism and other industries. Google will maintain and expand its content licensing efforts for Google News Showcase, and continue the Google News Initiative.
Taken together, these three components of the agreement will help California newspapers and other news operations, which have been struggling with economic and journalistic challenges. The economic challenge is to maintain funding for news operations in the face of long-term declines in the price of advertising. Adjusted for inflation, the price for newspaper advertising has dropped roughly 40% since 2007 — good news for advertisers and consumers, but bad news for newspapers and their employees. That’s where the subsidies from the News Transformation Fund will help.
The journalistic challenge is to maintain the relevance of news operations in the face of competition from online influencers, independent podcasters, and other new media born in the digital world. No one knows the best answer, but it’s likely going to require the use of AI to boost the reach of working journalists, and produce innovative streams of news and revenues.
The California agreement is an alternative to cumbersome and unsuccessful legislative attempts in the United States and elsewhere to force tech platforms to pay for their “use” of the news. The California approach avoids bureaucratic collective arbitration mechanisms, as in Australia and Europe, and complex exemption procedures, as in Canada.
Because the funding will be monitored by a board that includes representatives from independent, Black, Latino, and diverse media and labor, it’s more likely to be targeted to underserved populations.
The California agreement sets a model for other states and countries. It’s not perfect, but it brings all the parties to the table in a way that starts to tackle both the economic and journalistic challenges facing the news media.
