How a bill to save local journalism turned into a mysterious AI incubator

0:00Hey guys, it's Andrea and Emily with The Culture Journalist, and we're here with a subscriber-only bonus episode. So as you know, the journalism industry is just a little bit in dire economic straits, which is why Emily and I have been closely tracking the fate of a bill promising to provide much-needed economic relief to media companies in California, where I live. The bill, which is called the California Journalism Preservation Act, took the novel approach of making tech giants like Google and Facebook compensate California news organizations with a small portion of the revenue that they bring in from hosting stories produced by California journalists on their platforms.

0:41It's an idea that had ramifications outside of California because it got to one of the root causes of why so many publications are shuttering or laying off workers, which is big tech's monopoly on the ad market. We'd already been meaning to record an episode on this bill for a long time, but then something crazy happened. After passing in the California House with a supermajority, a weird backroom deal between Google, legislators, and major news publishers, notably without any actual journalists present or involved, produced a quite different result. So California journalists were supposed to get a share of advertising revenues from big tech each year in perpetuity and a more level playing field.

1:24But what we ended up getting was a small fraction of that, talking like less than a quarter, to be paid out by Google over the course of just the next five years, and a chunk of that allocated to a vague AI accelerator project that literally no one asked for. Not to mention a somewhat bleak precedent now in place for any future legislative action that might help rein in big tech's deleterious effects on the local news landscape. So today we're bringing on Brian Merchant, who you might remember from our episode on the Luddites. He's the author of Blood and the Machine, both the book and Substack newsletter of the same name and a former LA Times tech columnist.

2:03And he's here to help us make sense of just what happened, the implications of these sorts of AI deals and AR more generally for the journalism industry, and what the fate of this bill means for journalism as a whole. So, Ryan, thanks so much for jumping on today. Yeah, my pleasure. Happy to be here to talk about this dumpster fire of a bill. Truly. So your piece is called How a Bill Meant to Save Journalism from Big Tech, and boosting AI and bailing out Google instead. Let's start with before all this happened. Tell us about the California Journalism Preservation Act and what it originally proposed.

2:40Yeah. So the California Journalism Preservation Act, or the CJPA, was a bill that's been kind of winding its way through the California legislature for a couple of years now. It was proposed, I believe, back in 2022, and it quickly gained steam. It was kind of modeled after the laws in Australia and Canada, where just to simplify what's going on, it's basically this effort to put a check on the biggest tech platforms who profit from news on their platforms. So basically Google and Facebook, Google and Meta. The trend has been over the last 20 years, as more people get their news online, as publishers have gone online, and the single most important revenue stream for most publishers is advertising.

3:39So what has happened as these platforms have risen to prominence is that they have been selling ads directly on their platforms, both Google and Facebook. Most of their money comes from advertising. And a lot of what gives their platforms value or has historically is the fact that people can go in there and read news, read magazine stories, read blog posts, things written by other people that are then put on the platform, either in the case of Google, directly by Google, like listed under Google News or shared by users on Facebook, on Facebook News Feed and all of that. The problem is, is that increasingly the publishers saw the ad dollars migrating from their magazines or their newspapers directly to Google and to Facebook.

4:30You know, why sell advertising like at a newspaper when you can sell it directly on Facebook and the benefit of, you know, being along with everything, not just one publisher. So Google and Facebook basically cannibalized the ad revenue market, which has been one of, if not the main drivers of sort of decline in journalism revenue. Long sort of detour and way of explaining that these bills in Australia and then Canada are an effort to combat that trend. And they both propose what's somewhat derisively called a link tax, where there's basically a system set up where if Google or Facebook are putting links on their platforms and benefiting from the value of having all this news and stuff that takes real money, real labor, real effort to create and to publish, then some fraction of that, of the ad revenue that they get as a result, should be redirected to the publishers.

5:32Why would you say this bill is important not just for California, but also for journalists everywhere? Wasn't there a similar bill making its way through Congress? And that's it for the free preview version of this episode. There's lots more ahead. get full access by becoming a paid subscriber for just five bucks a month over at the culturejournalist.substack.com.