Twenty-First Century Fox (NASDAQ:FOXA) Executive Chairman Rupert Murdoch has a message for Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL): pay up. Murdoch, in a statement, outlined the case urging online publishers to follow the model of cable companies and pay publishers of news to run content.
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“If Facebook wants to recognize ‘trusted’ publishers then it should pay those publishers a carriage fee similar to the model adopted by cable companies,” Murdoch said in a statement Monday. “The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services. Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.”
On Jan. 31, Facebook is expected to post fourth-quarter revenues of $12.5 billion, a 42% jump with profits rising 60% to $1.94 per share, according to analyst estimates.
Stung by allegations that Russia used his company’s tools to spread fake news during the 2016 election, Facebook CEO Mark Zuckerberg said in a post Friday that the social media platform will rely on its 2 billion users to prioritize news. The company recently announced plans to reduce the number of stories people see and wants to ensure that the stories that are displayed are “trustworthy, informative and local.” As part of Facebook’s quality surveys, the tech giant will now ask people if they are familiar with a news source and, if so, whether they trust that source.
About 45% of U.S. adults get news from Facebook, according to a Pew Research Center survey conducted last summer.
“There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism,” Murdoch added in the statement. “We will closely follow the latest shift in Facebook’s strategy, and I have no doubt that Mark Zuckerberg is a sincere person, but there is still a serious lack of transparency that should concern publishers and those wary of political bias at these powerful platforms.”
Twenty-First Century Fox is the parent of FOX Business and Fox News. Shares of Facebook have gained about 45% over the past 12 months, while Google shares have advanced 40%.