Google Displays Huge Market Power in Spanish News Tax Row

FEBRUARY 10, 2015

STAMFORD, Conn., Dec. 19, 2014 /PRNewswire/ -- Current awareness news & research (CANR) providers this month received a free lesson in new media strategy courtesy of Spain's decision to force publishers to collect fees from aggregators like Google for using their content — don't bite the hand that feeds you.

A report containing data on current awareness news & research can be found at:  http://www.simbainformation.com/Current-Awareness-Research-8031838/.

Google closed Google News in Spain on Dec. 16 and removed Spanish publishers from the service before the new law requiring payments comes into effect in January.

The impact was immediate. Web-analytics service Chartbeat stated that, within hours of its removal from the Google service, Spanish media sites saw their external traffic fall between 10% and 15%.

Josh Schwartz, the chief data scientist at Chartbeat, said the company doesn't track every Spanish news site or publisher, but it has enough data on them as a group to indicate just how dramatic the traffic decline was. He called it "a pretty massive difference" in traffic compared to a similar day before the removal.

The law's passage was largely the result of lobbying done by the Spanish Newspaper Publishers' Association (AEDE).

In a blog post, Head of Google News Richard Gingras seemed baffled by the movement by Spanish publishers to create this law.

"Google News creates real value for these publications by driving people to their websites, which in turn helps generate advertising revenues," Gingras wrote. "This new legislation requires every Spanish publication to charge services like Google News for showing even the smallest snippet from their publications, whether they want to or not. As Google News itself makes no money (we do not show any advertising on the site) this new approach is simply not sustainable."

The irony is that the true "Google Tax" will happen when Spanish publishers that lobbied for the law will have to turn to paid Google AdWords to compensate for losses derived from their absence in Google News.

Global sales in the current awareness news and research (CANR) market are estimated to have increased 2.4% to $2.09 billion in 2014, according to the report Current Awareness News & Research Market 2013-2016 from media and publishing intelligence firm Simba Information. That growth rate actually represents an improvement over the previous four years. Sales have been hindered by increased competition from free, ad-driven services and slow economic growth in the U.S. and in Europe. The report found that the current system of search, aggregation and Web distribution is helping sell more online advertising, but subscription uptake for major CANR providers has waned.

Simba Information's Current Awareness News & Research Market 2013-2016 provides market sizing, strategic and competitive analysis, forecasts and critical insight into the CANR market. Coverage includes leading competitors such as: LexisNexis, Dow Jones Factiva, Google and Hoover's.

For more information on this report, visit: http://www.simbainformation.com/Current-Awareness-Research-8031838/.

About Simba Information:

Simba Information is widely recognized as the leading authority for market intelligence in the media and publishing industry. Simba's extensive information network delivers top quality, independent perspective on the people, events and alliances shaping the media and information industry. Simba publishes newsletters and research reports that provide key decision-makers at more than 15,000 client companies around the globe with timely news, analysis, exclusive statistics and proprietary industry forecasts. For more information, please visit www.simbainformation.com or call 888-29-SIMBA.

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