Google to pay news publishers $1B for new product

The Google News partnership will see the tech giant pay $1B to news publishers in licensing fees

Google may have announced several new devices on Wednesday, including new Pixel phones and Nest speakers, but its new $1 billion commitment to pay news publishers for a new Google News initiative may arguably have a larger impact.

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The Google News Showcase, announced Thursday morning, will see the tech giant pay $1 billion to news publishers in licensing fees "to create and curate high-quality content for a different kind of online news experience." The new product will first appear on Android devices but will eventually come to the iOS Google News app.

"Google News Showcase is a new product that will benefit both publishers and readers: It features the editorial curation of award-winning newsrooms to give readers more insight on the stories that matter, and in the process, helps publishers develop deeper relationships with their audiences," Google CEO Sundar Pichai wrote in the blog post.

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The new product will roll out in Germany and Brazil first but will come "to other countries in the coming months where local frameworks support these partnerships," including India, Belgium and the Netherlands.

So far, nearly 200 major publications from Germany, Brazil, Argentina, Canada, the U.K. and Australia have signed on, including Der Spiegel and Stern.

“We applaud Google’s recognition of a premium for premium journalism and the understanding that the editorial eco-system has been dysfunctional, verging on dystopian," News Corp Chief Executive Robert Thomson said in a statement. "There are complex negotiations ahead but the principle and the precedent are now established.”

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News Showcase is separate from Google's other news licensing program as well as other news efforts, such as Subscribe with Google, Web Stories and audio news.

“The business model for newspapers—based on ads and subscription revenue—has been evolving for more than a century as audiences have turned to other sources for news, including radio, television and later, the proliferation of cable television and satellite radio,” Pichai added. “The internet has been the latest shift, and it certainly won’t be the last. Alongside other companies, governments and civic societies, we want to play our part by helping journalism in the 21st century not just survive, but thrive.”

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