Google to Pay Publishers Over $1 Billion for News Content

(Bloomberg) -- Alphabet Inc.'s Google will start paying select media outlets to display curated content on its news app in a concession to the industry which has accused the search engine and other tech giants of unfairly using content for years.

The company has set aside more than $1 billion to cover the program's first three years, and will extend the program beyond that, Google said in a statement on Thursday. The search giant will pay publishers to provide blurbs for its news app and to give readers free access to certain paywalled articles, Google said.

The Google News Showcase product, which launches Thursday in Brazil and Germany, will display branded story panels curated by partner publishers, allowing them to highlight their content using timelines, bullets and related news articles. Panels will also link directly to the news publisher's website, Google said.

Google and Facebook Inc. have faced heat from news executives and regulators around the world who've urged the platforms to pay for the rights to host news articles. Publishers argue that their journalism is what's drawing users to those platforms, while the two tech giants are capturing most of the online ad dollars. Thursday's launch builds on a licensing program Google announced in June to “pay publishers for high-quality content.”

“Google News Showcase lets publishers curate stories on the news that matters, develop deeper relationships with readers and provides a new revenue stream for essential reporting,” Brad Bender, a Google vice president, said on a call with journalists.

Read More: Google Will Start Paying Publishers for Upcoming News Service

More than 200 publications in Germany, Brazil, Argentina, Canada, the U.K. and Australia have signed up to the News Showcase program, with more markets to come, Google said in the statement.

Bender said the funding wouldn't be able to cover all news organizations also because “not all publishers produce the volume and type of content necessary for this product.” Google is deciding who to partner with on a market-by-market basis, with a focus on newspapers or sources with established audiences, as well as significant local and regional news outlets, he said.

Licensing fees will be structured as a flat fee over a period of time and will be negotiated depending on the amount of content the publisher provides, Google said.

“With News Showcase and the new integration of editorial content of media like Der Spiegel, Google shows that they are serious about supporting quality journalism in Germany,” Stefan Ottlitz, head of product development at Der Spiegel, said in an email.

But not all publishers are convinced of Google's new program. “By launching a product, they can dictate terms and conditions, undermine legislation designed to create conditions for a fair negotiation, while claiming they are helping to fund news production,” said Angela Mills Wade, Executive Director of the European Publishers Council, referring to an EU copyright directive that allows news outlets to seek payment from internet sites that display their articles.

Google said News Showcase will first launch on its Android app and later on iOS, Discover and search services. News Showcase content won't get preferential ranking or display in the app or search results.

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