Ref. Ares(2016)5575203
Further input to response to the European Commission’s Public consultation on the role
of publishers in the copyright value chain and on the 'panorama exception'
Google - Case Id: fc333f93-c9f3-4c24-97ef-b2ae8e115af2
Google believes in the importance of European cultural diversity and creative industries.
The growth of the Internet has led to opportunities and challenges for European creative sector
businesses, as they have transformed their operations in light of the online market and changes
in consumer behaviour.
The impact of the Internet on business models has perhaps been most significant in the case of
established players, who have had to transform existing businesses to account for new modes
of access, distribution and new realities in the world of advertising.
Despite these challenges, however, we believe the internet represents a formidable opportunity
for growth across the creative sector, for the place of European culture in the world and for
European consumers. Indeed, many businesses across the creative sector have already begun
to seize the benefits of the online world. Today, digital is the major source of revenue growth for
the European creative industries. Over the past decade, all growth in Europe’s creative sector
was driven by digital: 22 Billion EUR over the past decade1. Consumer spend on the creative
industries has also increased 25%2. Digital is also spurring growth in jobs in the creative sector.
For example, UK Culture Ministry research reveals that the IT sector (programming and
publishing of software, gaming, etc.) is the highest net job creator in the UK creative industries,
adding 94,000 jobs to the UK economy between 2011 and 20133. Finally, digital innovation is
spurring creative industries that did not exist a decade ago. The EU App economy – which
would not exist but for mobile devices and operating systems – employed 1 million people in
2013 (creatives such as script writers and developers) and is projected to employ almost 5
million people by 20184.
Google is committed to supporting European creative industries, and publishers in particular, in
reaping the benefits of these opportunities. One such opportunity is the growth in mobile
consumption. Ownership of Internet-enabled mobile phones increased by 42% between 2012
1 Strategy &, ‘The digital future of creative Europe’ (2015), http://www.strategyand.pwc.com/reports/the-
digital-future-creative-europe
2 Booz & Co, ‘The digital future of creative Europe (2013)’,
http://www.strategyand.pwc.com/reports/digital-future-creative-europe
3 https://www.gov.uk/government/statistics/creative-industries-economic-estimates-january-2015
4 Plum, ‘All about that app’ (2015) www.lisboncouncil.net/component/downloads/?id=1138
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and 2015, and time spent accessing the Internet via mobile devices has grown accordingly5.
Today, 53% of news consumers report that they use a smartphone to access news6.
Use of a smartphone to access news in a week - per cent of online news consumers
Source: Reuters Institute Digital News Report 2016, p.14.
We work hand in hand with European partners to develop products and tools that support a
sustainable transition to digital for creative industries. Google invests heavily in new products for
discovery, access and monetization; as well as for the protection of intellectual property.
Google’s business model is very much one of partnership: we succeed when our partners
succeed, including those in the creative sector. Sustainable growth for the creative sector is a
win-win.
It is from this position of partnership, and with the shared perspective of the value of journalism
to society, that we would like to set out why introducing a new neighbouring right for publishers
will cause unintended negative consequences. While the precise nature of such proposed new
rights remains unclear, our concern is that the creation of a neighbouring right would inhibit the
capacity of the sector to innovate and adapt to changing news consumption patterns. In
particular, we are aware that some news publishers support a right along the lines of those
introduced in Germany and Spain, both of which had the outcome of requiring web platforms to
pay to show short quotations of text (‘snippets’) alongside hyperlinks to original articles. These
laws have resulted in no benefits for publishers, and in fact have led several publishers to
oppose them as harmful to their businesses7. They have also created obstacles for online
platforms and barriers for consumers seeking to find diverse sources of news, among other
collateral damage.
5 Strategy &, ‘The digital future of creative Europe’ (2015), http://www.strategyand.pwc.com/reports/the-
digital-future-creative-europe
6 Reuters Institute Digital News Report 2016,
http://reutersinstitute.politics.ox.ac.uk/sites/default/files/Digital-News-Report-2016.pdf. The report covers
26 countries, including 17 EU member states.
7 See e.g. http://ecoteuve.eleconomista.es/ecoteuve/prensa/noticias/7111513/10/15/Antonio-Cano-Los-
medios-espanoles-hemos-sido-demasiado-agresivos-con-Google.html
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Google fights online piracy
Whenever a rightholder informs us that a link or an image found on our search engine infringes
their copyright, we remove it. We’re able to process these notices, on average, within six hours
and remove over 98% of these links to webpages.
Moreover, we use these notices to demote sites for which we receive a large number of valid
removal requests notices, making them less visible in search results.
For copyright owners who have demonstrated a proven track record of submitting accurate
notices and who have a consistent need to submit thousands of webpages each day, we
created the Trusted Copyright Removal Program for Web Search (TCRP). TCRP facilitates
“bulk processing” of removal requests for copyright owners. There are now more than 114
TCRP partners, and the service is used by publishers like Harper Collins and Random House.
Google also supports the “follow the money” approach, aiming at attacking the source of
revenues of rogue websites exploiting counterfeited content.
Google partners with news publishers
Google works with publishers across Europe in a number of areas to increase traffic, revenue
and user engagement on their websites. Google’s products and services drive over 10 billion
clicks a month to publishers’ websites globally, and our advertising tools help publishers make
money from those visits. In 2015, our partners around the world earned more than USD 10
billion using our AdSense products.
Today more than 75,000 organisations take advantage of Google News to reach readers and
4,000 news sources provide both free and subscription-supported content in the Google Play
Newsstand.
In 2015, Google launched the Digital News Initiative (DNI) in partnership with publishers around
Europe8. The DNI aims to promote innovation and new business models in journalism by
building new technologies; providing funding for startups and other innovators; and supporting
research and training. The DNI’s innovation fund has given grants of a combined €27 million to
128 projects in 23 European countries. Over 12,000 journalists, academics and students across
Europe have received training support from our Google News Lab since April 2015.
Accelerated Mobile Pages (AMP), an open-source standard for specially formatted web pages
that enable extremely fast content on mobile devices, was developed with publishers in the DNI
and is now used by over 100 European publishers, including La Stampa, Zeit Online, Bild, Die
Welt, Les Echos, The Independent, and El Pais.
Publishers benefit from Google services
Our aim is to support thriving businesses in the news industry -- an important goal. We fear that
a new neighbouring right will be counter-productive. Google has long argued that web platforms
provide benefit to publishers. Google services alone send 10 billion clicks worth of traffic to
news publisher websites each month, and each visit is an opportunity to earn revenue through
advertising or subscription. Deloitte has estimated that referral traffic was worth €746 million to
8 https://www.digitalnewsinitiative.com/
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news publishers in the UK, Germany, France and Spain in 2014, and that each visit referred to
a news website is worth between €0.04 and €0.089.
Google works with publishers to help them make money from this traffic through advertising,
and we have built commercial partnerships with major publishers across the EU.
Furthermore, services such as app stores, Apple News, Google Play Newsstand and Blendle
offer publishers an opportunity to sell their products, showing that web platforms are already
working closely with the news industry to mutual benefit.
While the challenge of transitioning to digital should not be underestimated, we would also note
that many news publishers are adapting quickly and successfully. In 2014, digital accounted for
70% of the Financial Times’ total paying audience10, as online subscriptions grew by 21%; and
digital content revenues increased by double digits in the year period ending in July 201511. Axel
Springer also saw the benefits of digitisation with pro-forma revenues from digital activities at
Axel Springer rising from €1,568.6 million to €1,705.8 million12. Digital business models at Axel
Springer now account for 67% of the overall revenues and 72% of the EBITDA or the Axel
Springer group13.
This inflow of readers and referral traffic comes from a wide variety of different sources (see
table below). The latest edition of the Reuters Digital News Report for instance finds that half of
online users (51%) now get news from social platforms such as Facebook.14
9 ‘The impact of web traffic on revenues of traditional newspaper publishers: A study for France,
Germany, Spain and the UK’, Deloitte LLP, http://goo.gl/XcnLG4
10 http://aboutus.ft.com/2015/02/27/financial-times-2014-results/#axzz3pmjgiADd
11 http://aboutus.ft.com/2015/07/24/ft-2015-half-year-results/#axzz3pmjgiADd
12http://www.axelspringer.de/en/presse/Axel-Springer-profited-in-2014-from-increasing-revenues-and-
earnings-contributions-from-digital-activities 22817400.htmll
13http://www.axelspringer.de/en/presse/Axel-Springer-starts-the-financial-year-with-strong-earnings-
growth 27178152.html
14 http://www.digitalnewsreport.org/survey/2016/overview-key-findings-2016/
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Starting point for news – Europe, per cent of online news consumers
Mobil
Direc
Other
t
to
Searc
Socia
e
aggregator
Country
news
h
l
Email
notific
sites,
bran
Medi
ations
(1)
a
and
newsreader
d
alerts
s, apps
United
Kingdom
52%
32%
28%
10%
10%
4%
Germany
26%
45%
20%
15%
9%
5%
Ireland
44%
46%
36%
9%
9%
7%
France
27%
40%
21%
21%
14%
6%
Spain
36%
54%
35%
14%
8%
11%
Italy
20%
66%
33%
17%
7%
6%
Denmark
54%
29%
38%
24%
9%
9%
Finland
63%
26%
28%
9%
7%
12%
Source: Reuters Institute Digital News Report 2015, p76. Search includes news accessed from
news aggregator sites operated by search engines and includes navigational queries.
To conclude, Google recognises the challenges facing the news industry, and we engage with
partners around Europe to tackle these challenges, through product development, investment in
training and innovative projects, and commercial partnerships.
We believe that collaboration and a focus on innovation is a better approach--an approach more
likely to lead to sustainable growth and business development--than new legislation in this area.
We are at your disposal to discuss in more depth any aspect of our response; and we look
forward to continuing to engage with the European Commission and European publishers to
address these issues.
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