The EU Commission’s Digital Single Market (DSM) strategy promises to “tear down regulatory walls” and “make the EU’s Single Market fit for the digital age”. But its current wording looks like a bum-deal for advertisers.
Launched last week to coincide with Jean-Claude Juncker’s state of the union address, the latest raft of proposals aim to protect the copyright of news organisations and publishers, both of which have a symbiotic relationship with advertising.
The idea is to ensure publishers get remunerated for their work by putting them in a better position to negotiate the use of their content with online services using or enabling access to it. “I want journalists, publishers and authors to be paid fairly for their work”, said Juncker.
The Commission’s proposals may not be the good news they appear to be though, especially for media businesses.
Any attempt to regulate the flow of information online could prove to be myopic. If social media sites and news aggregators are forced to pay for content they push, one of two things could happen.
The first involves aggregators. Google, for example, doesn’t profit from disseminating news. It could simply stop providing its news service EU-wide, as it has already done in Spain due to ancillary rights issues. Clearly, this would reduce traffic – and subsequently revenue – for both publishers and advertisers.
The other is the acute focus on media behemoths in the proposals. Advertisers will certainly still make money from the biggest players, but as Ian Twinn, director of public affairs at ISBA quite rightly says, these proposals could “reduce access for citizens who do not read the big publications”.
Advertising plays a key role in funding digital content, services and applications, making them widely available at little or no cost, as well as driving growth in the digital sector.
“As written, it [DSM] appears to consolidate power to the big news providers who will be able to claw back cash every time their copyrighted news appears on a search engine... but the smaller digital ‘newspapers’ will not get the same benefit”, said Twinn, adding that “in turn this may increase cost and advertisers may lose the chance to reach those lost readers”.
Of course the DSM is not law, it’s an aspiration around which future EU laws may be crafted, and is years away from becoming binding on member states.
Tearing down walls to herald a new age of European harmonisation certainly isn’t new, and while their intentions are laudable, at this proposal stage, perhaps the EU should think twice before bringing in the bulldozers.