WGAE Statement to U.S. Senate on Big Tech’s Impact on Journalism

NEW YORK, NY (February 8, 2022) – The Writers Guild of America, East, AFL-CIO (WGAE), submitted written testimony to the United State Senate Committee on the Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights for a hearing on “Breaking the News – Journalism, Competition, and the Effect of Market Power on a Free Press.”

The Guild’s position was echoed by Chair Amy Klobuchar in her opening remarks.

Read the submitted statement of the Writers Guild of America, East:

The Writers Guild of America, East represents people who write dramas and comedies for television, feature films, and streaming video, and who write news for broadcasters like CBS News and ABC News and digital-native news organizations like HuffPost, Vice, Vox, and many others. Our members write late-night comedy/variety shows, crime dramas, public affairs programs like Frontline and Nova, Sesame Street, and news stories carried on the airwaves and online.

We urge the Subcommittee to examine the huge, negative impact of Big Tech companies on the ability of news organizations to raise enough revenue to employ professional journalists to do their essential work.

Two figures reported by the Pew Foundation tell the story succinctly: One, as of 2020, 63% of all advertising revenue was from digital advertising. Two, nearly two-thirds of all digital ad revenue went to Big Tech companies – indeed, 55% of it went to just Facebook/Meta and >Google/Alphabet.

All news organization face this enormous challenge: how do we pay for professional journalism if Big Tech takes the lion’s share of the advertising revenue? The tech platforms do not pay writers and correspondents and editors and producers and crews to investigate and report the news. They simply make money by selling ads against the stories that are created by professional journalists who are employed by news organizations.

To be clear, the news is going online, which is where the Big Tech companies take the revenues. Pew reports that, in 2021, fully 84% of Americans got news from digital devices like smartphones and computers – and 51% said they “often” got their news digitally. This is a continuing trend. As recently as 2016, only 28% of Americans said they preferred to get their news online. Thus, news organizations increasing rely on digital distribution to reach their readers and audiences, regardless of whether they are principally newspapers, broadcasters, or digital-native publications. If Big Tech continues to siphon off such a huge share of digital advertising revenue, there will be no money to pay journalists to do their work.

This is not just a matter of platform. There is nothing inherent in digital technology that would preclude news organizations from obtaining revenue by distributing their stories online. The problem is the concentration of market power by a tiny handful of Big Tech companies. Facebook and Google (and to a lesser extent, at least for now, Twitter and Amazon) have the market power to completely dominate the digital advertising market. News organizations simply cannot compete.

The result is predictable: Continued consolidation and cutbacks and layoffs in newsrooms across the country. Local newspapers have slashed their newsroom staffs. Local broadcasters often fill their newscasts with stories created by national chains. Even digital-native news organizations, which had been growing enormously, face severe headwinds as ad revenue gets more and more difficult to find. WGAE members have been laid off at premier digital news organizations like HuffPost, Vice, G/O media, and others. Digital-native enterprises are forced to shutter verticals and to consolidate with other digital companies just to survive in the current climate.

Two pillars of American democracy are (1) competitive markets free from domination by a small number of giant firms and (2) a robust, free press. Both pillars are undermined by Big Tech companies gorging on the digital ad revenues that could, and should, be used to pay professional journalists to investigate and report the news.

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