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Arthur T Knackerbracket [soylentnews.org] writes:

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Arthur T Knackerbracket has processed the following story [techdirt.com]:

Journalism [techdirt.com]

Hey Google, can you spare a few hundred million to keep Rupert Murdoch’s yacht afloat? That’s essentially what some legislators are demanding with their harebrained schemes to force tech companies to fund journalism.

It is no secret that the journalism business is in trouble these days. News organizations are failing and journalists are being laid off in record numbers. There have been precious few attempts at carefully thinking through this situation and exploring alternative business models. The current state of the art thinking seems to be either (1) a secretive hedge fund buying up newspapers [theatlantic.com], selling off the pieces and sucking out any remaining cash, (2) replacing competent journalists with terrible AI-written content [techdirt.com] or (3) putting all the good reporting behind a paywall [techdirt.com] so that disinformation peddlers get to spread nonsense to the vast majority of the public for free.

Then, there’s the legislative side. Some legislators have (rightly!) determined that the death of journalism isn’t great for the future of democracy. But, so far, their solutions have been incredibly problematic and dangerous. Pushed by the likes of Rupert Murdoch, whose loud and proud support for “free market capitalism” crumbled to dust [techdirt.com] the second his own news business started failing, leading him to demand government handouts [techdirt.com] for his own failures [techdirt.com] in the market. The private equity folks buying up newspapers (mainly Alden Capital) jumped into the game [techdirt.com] as well, demanding that the government force Google and Meta to subsidize their strip-mining of the journalism field.

The end result has mostly been disastrous link taxes [techdirt.com], which were pioneered in Europe a decade ago. They failed massively before being revived more recently in Australia and Canada, where they have also [techdirt.com] failed [techdirt.com] (despite people pretending they have succeeded).

For no good reason, the US Congress and California’s legislature are still considering their own versions of this disastrous policy that has proven (1) terrible for journalism [techdirt.com] and (2) even worse for the open web [techdirt.com].

Recently, California Senator Steve Glazer offered up an alternative approach, SB 1327 [ca.gov] that is getting a fair bit of attention. Instead of taxing links like all those other proposals, it would directly tax the digital advertising business model and use that tax to create a fund for journalism. Specifically, it would apply a tax on what it refers to (in a dystopian Orwellian way) as a “data extraction transaction.” It refers to the tax as a “data extraction mitigation fee” and that tax would be used to provide credits for “qualified” media entities.

I’ve seen very mixed opinions on this. It’s not surprising that some folks are embracing this as a potential path to funding journalism. Casey Newton described it as a “better way for platforms to fund journalism [platformer.news].”

And, I mean, when compared to link taxes, it is potentially marginally better (but also, with some very scary potential side effects). The always thoughtful Brandon Silverman (who created CrowdTangle and has worked to increase transparency from tech companies) also endorses the bill as “a potential path forward [substack.com].”

But I tend to agree much more with journalism professor Jeff Jarvis who highlights the fundamental problems of the bill [medium.com] and the framework it creates. As I’ve pointed out with link taxes, the oft-ignored point of a tax on something is to get less of it. You tax something bad because that tax decreases how much of it is out there. And, as Jarvis points out here, this is basically a tax on information:

Furthermore, Jarvis rightly points out that Glazer’s bill is positioned as something unique when users give their attention to internet companies, but explicitly carves out when users give their attention to other types of media companies. This sets up a problematically tiered system for when attention gets taxed and when it doesn’t:

Indeed, the entire framing of the bill seems to suggest that data and advertising is a sort of “pollution,” that needs to be taxed in order to minimize it. And that seems particularly troublesome.

As Jarvis also notes, the true beneficiaries of a law like this would still be those rapacious hedge funds that have bought up a bunch of news orgs:

Indeed, the structure of the bill is one that will continue to benefit the failed news organizations, rather than incentivizing newer, better news organizations. That is the problem with all of these approaches, which assume that the answer must be to prop up the businesses that failed to innovate, rather than creating better incentives for more innovative approaches.

Google has warned that, if the bill passed, it would likely stop funding a bunch of other news initiatives [axios.com] that it has funded for years. This shouldn’t be surprising. If Google has already been funneling a ton of money into news initiatives, and then the California government is forcing them to direct hundreds of millions of dollars to its preferred news initiative, it would make sense that the company would drop its other programs and redirect the money to this one.

And, again, that highlights the problematic nature of this whole setup. It’s based on having the government decide who should be taxed and who gets funded. And when it comes to journalism, we should be pretty worried about the government picking and choosing winners and losers. Because that raises serious First Amendment issues and is very prone to just supporting news organizations that treat the deciding politicians nicely, rather than those that do deep investigative reporting and expose corruption and malfeasance.

Not surprisingly, Glazer did not take Google’s announcement well. He obnoxiously declared, “When people asks [sic] who is in charge of protecting our democracy and independent news— now you know.”

But, if the alternative is that the California legislature gets to pick and choose who “protects independent news,” I’m not sure that’s any better.

Honestly, if Glazer didn’t think that his plan would lead Google (and Meta) to pull the money they already put into funding journalists as duplicative, what was he even thinking?

And I say this as someone who could conceivably benefit from this bill. But I don’t trust the California legislature not to play favorites.

A few years back, I visited some elected California legislators to talk about a bunch of policy-related issues. My first meeting with a California state senator set the tone. He asked me if I had heard about a new committee he had set up, and I told him I had. He then said he noticed that I had not reported on that committee. I pointed out that the mere creation of a committee didn’t seem all that newsworthy, but when the committee did something that I thought was worth covering, I would then write about it.

His response was kind of chilling and has stuck with me for years: “well, if you’re not willing to write about what I’m doing, why should I even listen to you?”

It was a demand for political quid pro quo, which is not something we do here at Techdirt.

But I fear that a bill like Glazer’s effectively makes this mandatory. Journalism orgs will need to scratch the California government’s back to get access to these funds.

There are all sorts of reasons why tech companies should consider funding journalism. I think their desire for high-quality data for training AI is a good one [techdirt.com], for example. But having the state step in and set the rules seems prone to all sorts of corruption.

Journalism needs new business models. We’re all experimenting all the time with different ideas (and if you’d like to help, there are lots of ways to support us [techdirt.com]). But we should be pretty wary of governments stepping in with half-baked solutions that could distort the overall world of journalism and the open internet.

Filed Under: business models [techdirt.com], california [techdirt.com], data extraction tax [techdirt.com], data tax [techdirt.com], innovation [techdirt.com], journalism [techdirt.com], sb 1327 [techdirt.com], steve glazer [techdirt.com]
  Companies: google [techdirt.com], meta [techdirt.com], news corp [techdirt.com]

The problems with any kind of a collection society (ASCP, BMI, SOCAN, etc.) is that regardless of any good intentions at their inception they always turn into something less than they were intended to be.

You guys give us money and we’ll give money to those guys over there.

It’s pretty much a recipe for corruption and incompetence, and those who have to deal with the collection societies have no ability to say “you guys are doing a bad job so we’ll deal with the other guy.” There is no “other guy”; the law requires you to deal with them and nobody else regardless of their level of competence or lack thereof.

yeah, government is inherently corrupt

Hmmm. This also seems like taxation without representation. Since the beneficiaries will always be not-the-taxed.

Targeting one specific industry with a tax to support another seems like… something that would actually go against any legitimate public interest.

I thought I was misunderstanding the meaning of tax credit, but random google seems to agree with me.

Somehow posted.

The term “tax credit” refers to an amount of money that taxpayers can subtract directly from the taxes they owe. This is different from tax deductions, which lower the amount of an individual.

But this seems like a straight tax, not a tax credit from the description.

At first glance the tax collection part seems… ok (although good luck getting any actual money out of those huge tax-dodging corporations!) but the distribution end is, even at first glance, not in any way good.

So we have some sort of authority picking and choosing which “worthy” news publishers to siphon the funds to. A simple principle applies here: he who pays the piper calls the tune. Put your cynic’s hat on and ask yourself “How long until the newly-replaced board grant $500m to Truth Social?”

An alternative? Currently I avoid most news publishers behind a paywall. I pay an annual subscription to those that offer value (e.g. reasonable news coverage, some visibility so I have a chance to see whether I like the site first). But what about those where I follow a link only to hit the paywall? Dunno about you, but I just close the tab… But what if there was a third-party aggregator for microtransactions? Someone the user and the news sites can sign with as customer and vendor, with a price notified and clicked through when I hit the site and a bill at the end of the month?

The internet was not originally designed for commerce, and it shows. But the only rational answer is “user pays” for the news that they read, not “create an organization to pass money to the commissioners’ patrons”.

Why tax internet companies, specifically? We’re still at the stupid bad no good link tax trough. Tax all the companies and the ultra-wealthy. Make them pay fairly. No overseas shuffling of cash. No shuffling of the companies andpeople overseas with the money they extracted here. Then you can fund journalism and broadband and infrastructure repair and all the things.

When CNN first came on the scene, it was pretty good. Granted, they had the 25 or 30 minutes’ worth of daily news on continuous loop, but it was fairly concentrated news. That made sense. Except for an emergency situation, a day does not have 24 hours worth of news. I’m old enough to remember news that was basically a PSA, and it was fairly short and to the point.

Now, news is especially about selling commercial time, and those viewers have to be engaged to keep the commercial dollars flowing. Targeting a demographic is important, and the channels have to pretty much say what it takes to keep the target groups engaged. The news just keeps the viewers enraged or afraid to stay between commercials. Broadcasting 24 hours a day also can’t be cheap.

Local news is really bad, at least it is here. There will be 60-90 minutes, with most of that being features (aka fluff), some being commercials for the channel network’s TV shows, commercials, and maybe 5-10 minutes of actual news. For God’s sake! I’ve timed the weather portion, and it runs around 10 minutes to give 30 seconds worth of meaningful information. Notice how the lead-ins also often tease with how you need to watch the upcoming segment to see if your life might be in danger from the unwashed dishcloth.

News really does need to get back to giving a service (information) rather than just providing vehicles for advertisers.

Silly Mike. Does he not realise that once you give the hedge funds millions of dollars that some trickles down to journalists, then to Mom and Pop corner stores, little old ladies, orphans, and kittens. Does Mike hate kittens???

Taxing The Internet To Bail Out Media Won’t Solve The Fundamental Problems Of The Media Business

It’s like tipping culture. Getting someone else to pay more because the actual workforce doesn’t get paid enough, except there’s no transparency as to whether the money actually makes it to the people the pay is supposed to benefit. Neither does it actually solve the problem that the profession at stake here simply isn’t valued, probably not by the consumers and certainly not by the company.

It’s not at all clear that very many people actually read much of a newspaper. Yup, they scanned the front page, maybe read a graf or two, flipped to the sports or the comics… Those people aren’t going to pay for news.

The value of journalism was investigative reporting, which shed some light on how our tax dollars were being spent and sometimes exposed people in office serving themselves instead of their constituents. And, occasionally, a really diligent journalist would uncover corporations doing real harm.

What we should be funding are the investigators! They become increasingly critical as the bulk of the population chooses to be dumb and ill-informed.

I find it interesting that Mr Masnick didn’t mention party affiliation in his encounter with the CA legislators. Not because I think he’s running cover for the Democrats, though, because duh. It’s Cali.

No, the interesting part is that there’s no hint of awareness that the Ds he met who followed the pattern were all corrupt, and not fit to vote on press-related laws.

That’s quite interesting, when viewed in the light of his comments about investigative journalism, and considering what might happen if he spent more effort into policing his preferred faction and less into taking the low-hanging horseapples the opposition annually produces.

The answer is most likely uninteresting, something along the lines of having a clear foe to rally others around is going to alienate your allies. Doing that is easy, while taking on those on your side is extremely difficult.

But only the supporters of a party can change that party for the better. That used to be possible, but the republican form of presidential nomination was abandoned in favor of a democratic one. Now the bosses of each party decide everything for the grass roots, and look where that’s got us.

Neither party can self-police any better than the actual police can, and for the same reason: lack of those willing to do the dirty work that must be done. Now that’s a real journalism story to take a look at, because it’s obvious, once you realize that none of the three can be held accountable to anything.

and considering what might happen if he spent more effort into policing his preferred faction

He spends quite a lot of time actively criticizing Dems when he disagrees with them. If you’re going to complain about whether he does something, you should look into whether he does it first or not, before assuming.

Indeed, the entire framing of the bill seems to suggest that data and advertising is a sort of “pollution,” that needs to be taxed in order to minimize it.

It is pollution. Jeff Jarvis and his weird anti-privacy bent is so bizarre. The data that advertising companies suck up by violating our privacy is not “knowledge”. If it was knowledge, it’d show me the stuff that I want to buy, rather than the stuff I already bought. Taxing surveillance capitalism is cool, actually.

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