Transcript: Jeff Bezos' News Tech Takeover
Transcript from the event on Aug. 17, 2022, produced by ACT-TV on behalf of the Open Markets Institute and its Center for Journalism & Liberty.
<Unrecorded opening>:
Hello, everyone, welcome to what is sure to be a great conversation on tech pressure points and opportunities to help STRENGTHEN America’s newsrooms. I’m Jody Brannon, director of the Center for Journalism & Liberty. We’re a program within the Open Markets Institute, a think tank that explores competition policies from all Big Industries, including Big Pharma, Big Ag, Big Gas, Big Airlines and of course Big Tech.
In our case, the Center more narrowly focuses on using competition policy to design the business models that ensure that journalism thrives in the century ahead. We’re proud to be a part of the Knight Research Network, a coalition of university-based institutes and policy think tanks that explores issues at the nexus of Tech, Media & Democracy.
Today’s event stems from the scars I still carry from working at washingtonpost.com in its formative years, when our tech systems were less of a techstack and more of a tech quilt, with tools patched together or invented on the fly. While there I worked with Dan Froomkin, who later became editor, and who had the tech smarts TO advocate for better tools to produce the news and fortify the website’s infrastructure & capabilities.
That’s why I thought of Dan for this reporting assignment. He willingly tackled a complicated story that examines the content management landscape but particularly the Washington Post’s Arc XP system, which has been largely developed since Amazon founder Jeff Bezos purchased the paper in 2013.
The article that resulted appeared in the June/July issue of The Washington Monthly. And its title says it all: “Jeff Bezos’s Next Monopoly: The Press: With his vast investment in the Washington Post’s digital publishing technology, the Amazon founder could soon control the backbone of most large American newspapers.”
In the article, Dan details how Jeff Bezos’ control of Arc XP threatens to dig an even deeper hole for a news industry already reeling from Google and Facebook’s monopolization of online advertising. Thanks to Arc’s ownership structure, a growing number of America’s struggling newspapers - both large and small - now pay millions to one of the world’s richest men for use of a publishing system that leverages data from users, publishers and advertisers.
We later shared that article with Ellen Goodman, a law professor at Rutgers who is also an adviser to the Center for …
<Recorded transcript continues below with minor editorial revisions for clarity>
Jody Brannon [00:00:00] Journalism and Liberty, and who has extensively researched the potential of a full stack approach to public media. Based on those conversations, we invited Ellen to speak today one on one with Dan about the implications of Jeff Bezos control of this journalism platform for American democracy. Ellen is a standout legal analyst and an astute antitrust mind who is deeply focused on media policy. And the one-on-one discussion will cover many angles of Dan's in-depth reporting that appeared in The Monthly, our frequent publishing partner that reports a lot about the monopolized economy. As far as how the hour will go, we'll share links on Twitter with the hashtag of the day #bezosnextmonopoly. If you can't stay for the entire hour, check our site for the recording. We're also streaming live on C-SPAN's network and platforms, and C-SPAN is recording today's discussion for later broadcast. The most efficient way to send questions, starting now, is via Twitter, using the hashtag #bezosnextmonopoly. But we'll be monitoring the live stream from our site, the comment section on Open Markets YouTube page and comments on Open Markets’ site and pages on Facebook. At the end of the discussion, Open Markets Policy Director Phil Longman, one of America's most experienced and insightful journalists and who was instrumental in shaping and editing Dan's article will provide closing remarks. So let's get started. No time to waste. Ellen, Dan: What's top of mind to open the conversation?
Dan Froomkin [00:01:37] Hi, Jody; hi Ellen. It's great to be here. I would like to actually start off by explaining one thing that is essential context to this entire story, which is that it's really hard to publish news online in a viable form. That may sound a little bit strange, given how easy it is now to just sort of set up a one-person newsletter or a small website or even a very small news site. But, it turns out it's really, really complicated. And when I first started writing this piece, I set off to get a sense of the challenges and the opportunities, the alternatives, and the competition. And I had a personal interest, as Jody said. I was one of those people who was, you know, literally hand-building the Washington Post website in the late 1990s, cutting and pasting, spending an awful lot of time doing stuff that took me away from the journalism that I really wanted to do.
So, I looked into this whole program, the whole issue, and it turned out to be a very, very complex set of challenges. You can, you could go to Substack and publish in a minute, but let's think about what it is the online news business has to do to collect, and publish the news, and also then to monetize it. For one thing, the most important thing is workflow. When you're publishing a newsletter, there's no workflow. But when you're the newsroom brainstorming, there's the assigning, there's writing a budget line, there's setting deadlines, there's keeping track of the deadlines, there's nagging for the reporter, there's the process of collecting information. Writing is a back and forth with editors. And then these days, there's also an enormous number of multimedia tools available for you to tell your story in a more effective way, whether it's video, or animations, or different storytelling formats. Then comes the what seems like the easiest part, publishing it in an attractive fashion, which is more challenging than you would think, especially given all the different ways that people are getting distracted online. You want to try to get their attention. And then the incredibly complex task of selling and serving ads, which is which is the main revenue stream for a lot of these news organizations.
Now, that said, a lot of these applications are moving towards a subscription model. So that means establishing paywalls and creating subscription services. And then what you publish as news alerts, the inevitable newsletter, and social media marketing, and all of these steps individually are complicated. Collectively, they are a nightmare. And up until recently, there's been no technological solution that is elegant, that works, and that is affordable. And there still isn't one that's affordable unless you're a major player. And so that's how I ended up getting into this whole issue of what is the lay of the land, where, who are the competitors? And it turns out there's a dominant one. And it's just because Jeff Bezos' platform that he built at The Washington Post.
Ellen Goodman [00:05:05] Thanks, Dan. Yeah. I mean, I think most people are familiar with the crisis in the news industry and the loss of journalistic enterprises, but don't think about the sort of stack that supports them. And so let's focus on that. So, you say there was no elegant solution until Bezos came along. Can you talk a little bit? I mean, there are competitors here, and there have been efforts to deal with various of these pieces, including email and content management systems, and ad services. Can you talk a little bit about what there has been and why Arc was able to, at least for the more well-heeled publishers, come in and take such a large share of the market?
Dan Froomkin [00:05:59] It dates back to the fact that in the late ‘90s and early Aughts, newsroom technology was a backwater, and we realized we needed to put out a website, but we didn't devote the resources to get the right kinds of people in to start building these things. So there was a huge time lag. I often tell the story that newsroom technologists were drained by the fact that there was only one way to really get fired in the newsroom, and that's if the system crashed on deadline. Their goal was to basically not add features because every feature was like risking their job because it would just make the system crash. So you had a bunch of overcautious people. You had a bunch of people who are trying to try to do this on the cheap. And the fundamental thing that Bezos has done is he's thrown a ton of money at the problem, and he's put together an enormous team of very talented people. And that's what you needed to solve this problem. You needed somebody who was willing to just throw a lot of money at it, see what works, and not just try to incrementally build, build, build. Because when you do that, you start saying, "Well, let's use this, let's tie together this, let's put it together with that." And you have this incredible patchwork of systems, each one of which needs to be constantly updated, both of which don't talk to each other. I mean, I was talking to newspaper production people who just before they switched to Arc, were literally still cutting and pasting things from their print production system into their web production system.
The genius of Bezos was he came in, he bought The Washington Post, he found an incredibly talented guy who was already there, the vice president of technology, who already had some great ideas. And he threw a ton of money [at] this guy, and said, "You built something great, The Washington Post." And, I don't know whether he had it in mind at the time or not, but the idea was maybe once it's done, we can sell it to other people, too. So, it's a lot like a lot of Amazon Web Services, which was built by Bezos for Amazon. And then he realized, "Hey, this is really great. I can sell it to other people as well." So, there are other content management systems out there. None of them is nearly as advanced or as thorough as Arc, unfortunately.
Ellen Goodman [00:08:28] So, in telling the story of this very elegant solution, and by all accounts, the customers are pleased with it -- it works well -- you are drawing an analogy to Amazon. Amazon is also a product that works very well and that provides an elegant solution by vertically integrating lots of different components of the marketplace using data and investing huge amounts in logistics. Actually, let me just quote from your piece because I think it will set us up to sort of dig down on, I think, what we want to focus on, which is what are the risks here, and sort of what's the problem. So you say, "Bezos's control of Arc, give him significant power over the news industry." Right.? So. There's this suggestion that control of this backbone could result in a more sort of deeper and more worrisome control over the news industry itself. They both allow him to harvest vast amounts of cash from competitors. So I want to, we want to talk a little bit about who are the competitors here, and competitors to The Post and maybe the competitive landscape for this kind of backbone service. And even as he makes them increasingly dependent on his technology, I want to flag that, too.
There is this problem of digital dependency that, of course, we've seen with AWS and with Amazon. How does that work here? You go on to say, "We know based on past experience with Amazon and AWS that being dependent on Bezos, this technology comes with serious consequences, often including manipulation, predatory surveillance and unfair practices. What initially appears to be a benign solution becomes exploitation of a trapped client base." So, we've got a few things going on there. Can we just start with maybe the last one? "What initially appears to be a benign solution becomes exploitation."
Dan Froomkin [00:10:49] Well, you know, there is a lot to unpack there. The analogies of Amazon are really quite considerable. Think about it. Amazon started off just basically trying to sell stuff and doing a good job of that. And what happened was that it ended up destroying local businesses, and basically making those that could continue dependent on their technology. And now, in fact, they've actually figured out a way that might be even more exploitative of these sellers, by forcing them to buy ads on Amazon to get their product placement higher up in the Amazon search results. So, on top of this, there is this whole layer of surveillance where people are tracked to deliver in ways that are very invasive, and with a goal simply to make more money for the central company. So all of these things are potentially at play with Jeff Bezos owning the infrastructure that major news organizations are using. That not a whole lot of this has not happened yet, except for, say, the transfer of money. So, for instance, these struggling news organizations are now sending a million dollars a year to Arc, to do something that ideally there would be some sort of public infrastructure that allow them to do. And so, there's definitely a client relationship that they're locked in. It's really hard once you are into a system this complicated to get some help.
Ellen Goodman [00:12:26] I think one of the things that's interesting about your piece is [that] it's a warning. You're sounding the warning alarm in a way that we didn't have when we all started using Amazon, however many years ago. These practices do not seem to be happening yet. There does not seem to be surveillance or through data collection or data monetization on Arc the way there is on an AWS or Amazon. So, we're talking about what might happen in the future. Let's talk about what that might be. What is the data that Arc can have on news publications that might be concerning?
Dan Froomkin [00:13:17] Well, I'm fairly certain that no news organization will allow or, you know, contractually or legally, [be allowed] to look at its actual content, to look at actually the news stories it's working on. I think that would be a deal breaker, even if it's really hard to break that deal. But there's still an awful lot of metadata flying around that could be extremely useful to anybody who is in the business of exploiting data. What are people reading, who's buying, who's watching what ads, who's clicking on what ads, who's subscribing, what else do they subscribe to? And then what sort of, what kind of articles are they reading? So, you can easily look at this and say, "Oh, look, there's an opening for another publication that does just this. And we have this target group of people who we may not have identified because the news organization that bought Arc didn't give us their names, but we could figure it out from all this other connected information that we have in our in our databases." So, the potential is there, and Amazon has a history of creating new products based on what it sees people are doing with its clients.
Ellen Goodman [00:14:35] I think in your piece, you quote someone saying that right now, the current contracts between Arc and the publishers do not allow for Arc to monetize data that they have access to. For example, about subscription information, or revenue information, or the metadata that you mentioned. So right now, their contracts say that. There certainly is precedent for this contractual language which talks about monetization. It excludes other kinds of sharing of data and other kinds of exploitation of data that falls short of monetization. Is that what you're concerned about, sort of in the ambiguity of the contract language? Or is it also that the contracts will change once there is a sort of lock-in to this technology?
Dan Froomkin [00:15:35] Well, I think it's probably very hard to contractually specify exactly what they can't do. I mean, obviously, the Arc engineers need to have access to your system to be able to fix it, to be able to troubleshoot it. But I don't see and as I said, I don't see any news organization tolerating anybody from another news organization, or any other company, poring through their stories. But, there is a risk. I mean, I think that just for the same reason that people avoid Amazon Web Services, because they're afraid of the surveillance and of being taken advantage of because their information is transparent. The transactional information and so on is going to be very transparent. The revenue information is going to end up being transparent. And of course, there's, you just take a little chunk off the top of the very newspaper subscription revenue and you're doing pretty good. Part of it just also has to do with the fact that this is owned by one man, by one extremely rich oligarch whose judgment you have to depend on. I mean, who knows what's going to happen? And one of the things that I thought it was really interesting, that one of the people brought up in my research was, what if he dies? I mean, what happens then? So, putting all of this potential control in in the hands of one guy does not seem like a wise idea.
Ellen Goodman [00:17:13] Right. So there's a sort of a larger theme of your piece, which is about democracy. And I think, you know, we certainly have a long, there's a long tradition of regulating in ways, subsidizing in ways that promote a diversity of voices in our news ecosystem. On the one hand, there's that. On the other hand, the news businesses are businesses, and they rely on vendors. And sometimes those vendors can be quite concentrated. I want to spend some time in talking about the relationship between the democracy promotion we hope the news publications are doing, and the business side, which can be quite concentrated. What if, for example, all these news organizations may be using Microsoft Office or a Google Services? There were certainly cases of newsprint monopolization in the old days, right? Talk a little bit about why is the backbone and the digital stack different from other kinds of services that news organizations patronize.
Dan Froomkin [00:18:32] Yes. Thank you. Because there's really two basically very serious contextual elements that, you know, concepts that are important here. One is the one I talked about at the very beginning, which is that it's really hard to do this. And the other is that it's a public good. Journalism, especially local journalism, is a public good, is a necessity for our democracy to survive. We as a society, both civil society and the government, should be keeping an eye out and making sure that we're not creating a market system where they can't survive. And historically, you know, the government has subsidized news through cheaper postal rates and through buying official notices in newspapers, and so on. The idea that there is a public good element here is very essential. When you have this clash between a public good that really needs to be served, and you've written brilliantly about the need for some sort of infrastructure that allows, for instance, public media to thrive. And then, on the other hand, you have this oligarch who says, by the way, he's trying to make the world a better place, controlling this in a way that this right now is financially exploitative and could be more in the future. So, the unique circumstances here to me is just an obvious solution, which is that the oligarch as philanthropist should turn this thing over to some sort of nonprofit entity, and allow it to become an open source option for any publication that wants to be there. I think that's what I ended up concluding.
Ellen Goodman [00:20:22] Well, OK, so let's put a pin on that. So, we're going to talk about solutions and alternatives, but can you just address -- this should be a public good, you're saying -- and there's sort of different ways that it might be governed, whether it's open source or as a nonprofit. But what is the difference? Why this? Why shouldn't other inputs into the news production business? For example, you cite a very interesting Reuters Institute report on the state of the news business. And if you read that report, you can see all the points of scarcity that are obstacles to a thriving news industry. One of them, I think a serious one, is that more than half of the publishers surveyed say that they can't afford the tech expertise that they need, software engineers, some of this sort of backbone services. So why shouldn't it be sort of a public good to provide news organizations with software engineers or with FOIA expertise, or with other kinds of data analytics? So, there are many inputs that that news publications cannot afford, and that is sort of reducing the quality and scope of journalism. Why the backbone? Yes, we have Jeff Bezos in the mix. And so that's a piece of this. But if we take him out of this, yes, this is owned by one person. But lots of these things have concentration in them. Why is this different?
Dan Froomkin [00:22:16] First of all, in some ways it's not different. But those are all very interesting areas that as policy matters, we should be discussing as a country. But there is one way in which it's very, very different. And this goes back to what I learned when I was working at the Washington Post website in the late ‘90s and early Aughts. And it was best summed up by one of the quotes in my piece from a guy named Damon Kiesow, who said, "CMS is destiny." So, content management systems, CMS -- a phrase by the way I was very proud I used almost not at all in my article. The way I used to put it is you build what you can. And so journalists, online journalism will be whatever it is that we can build. And so I think that having the tools of building a compelling and monetizable product is more essential that everything else.
Ellen Goodman [00:23:20] And I am going to add on to your answer and you can challenge me if I'm wrong. OK. I think this is different, possibly because of the data, and because of the data flows, and the possibilities which you allude to, of surveillance and monetization, which are not currently being exploited, but which could be in the future. Also, the integration of these services into the cloud. The vertical integration makes this possibly different, although in some ways quite similar to Google Suite. Right? I do want to point out that the competitors... So, Arc is quite expensive, and I think you said, is it 2,000 customers right now?
Dan Froomkin [00:24:12] 2,000 sites, not customers.
Ellen Goodman [00:24:12] OK, and they tend to be the better off in larger organizations, and the smaller journalistic organizations are going elsewhere. And that feature too I think distinguishes Arc a little bit from the Amazon model in that it's not a loss leader – it's an expensive product. You point out that it could be made free, right? At some point that could change. And then it would look a lot more like the sort of grab-and-grow model of Amazon. But right now, it's a little bit different. And there are competitors, or at least there are services that are not elegantly integrated, that are sort of piecemeal that other organizations are using. But the integration of data in Arc may make this a little bit different from some of those other infrastructural components. All right. So, now I'll turn to solutions. You had sort of two different models that you thought we should be moving towards. And what were they?
Dan Froomkin [00:25:28] I'm not sure which two different models you're talking about.
Ellen Goodman [00:25:30] That the nonprofit and the open source.
Dan Froomkin [00:25:34] Well, I think they're one in the same in the sense that there has to be... And you've written about this more eloquently than I have, that that there's a value to having some sort of public infrastructure that does this. The obvious answer in the technology world is to make these things open source, because then the code is available to everybody. Everybody can improve upon it. Every improvement can be widely shared, and you don't have it in the hands of somebody who's trying to make an awful lot of money.
Ellen Goodman [00:26:06] OK.
Dan Froomkin [00:26:08] I mean, I really do want to give a shout out to Newspack, which is a product of WordPress that is intended to be sort of a nonprofit open source kind of management system. The problem is that they haven't had the money thrown at them like Bezos has. And so it's still very much a work in progress, although it's very promising as well. So, what I would imagine is all of these editing [platforms], if they're all open source, they can start to make some bridge and create something exciting out of it.
Ellen Goodman [00:26:46] Might another solution be to put more money into Newspack or to create an alternative? Assuming Bezos is not going to donate this. I thought a very nice feature of your piece was sort of a call back to Carnegie, to the robber barons. And also, in this century, to Mozilla. There are precedents for corporations or oligarchs sort of donating their works into the public domain. If that doesn't happen, don't we have sort of a good start with Newspack? And I mean, there's you know, we've got other for-profit pieces of this, like Constant Contact or Salesforce or other or content management systems, like sort of putting more energy behind them, and so we have an ecosystem of competitors?
Dan Froomkin [00:27:47] Absolutely. No, I couldn't agree with you more. I mean, I got caught up in the fact that, you know, in contrast to the cutting and pasting that I was doing in 1999, there were, there was this amazing system out there. It was owned by a guy who claims to be a philanthropist. The perfect solution here is for him to do what Carnegie did, by building thousands of libraries around the country, is to give this to the business, give this to journalism. That said, you know, there is reason to be skeptical that he would do so. And there are absolutely other ways to go about it. There is absolutely a need to go about it.
There are people out there working really hard to do it already. You know, there's a group called the Tiny News Collective that is basically putting together a very, very limited but very effective way of publishing a very, very small news website. And there is Newspack. And Kinsey Wilson, who runs it, is a real visionary. So, yes, I think that as a society, we need to look at what's going on in the news business and find a way to help it. And there are different funding proposals, and different spending proposals. And to me, just as somebody who had been so involved with technology, I focused on this one thing as being a way forward. But there needs to be a much broader solution, and basically a resurgence of either public or nearly public media, right?
Ellen Goodman [00:29:16] Before we leave the solution space, and I want to call on your experience as an operator. I've heard from customers of Arc that they're very happy with the customer service and recognizing that they're completely stretched and, you know, have very few staff resources to deal with problems. Do you imagine that an open-source solution would be as user-friendly?
Dan Froomkin [00:29:54] Well, if it wasn't, it would be a failure. So, yes, it has to be. And I think the customer-support element is very important. I'm not talking about Bezos dumping his code into GitHub and then closing business. I'm talking about basically taking this thing that he has created, this company within a company, and keeping it intact, but just moving to a nonprofit, so that basically you still have customer support, you still have revenue possibilities. I mean, as I mentioned in the article, there are lots of places, lots of people who are still making a lot of money off of open-source products by providing great services. And in this case, potentially, what I found interesting was that Arc is now trying to expand into the non-newspaper, non-journalism, non-media space, and it's having some success. That could continue as a revenue stream that could then subsidize the kind of customer care and ongoing support that's necessary. Also, an endowment. You were setting it up with some sort of money. The people I talked to in the business were interested in this idea, but also very, very skeptical if all it was was basically somebody dumping, giving them a bunch of technology. This has happened too often. There've been too many, frankly, philanthropic efforts to build something they thought people would need. And then it just doesn't get used because it's either not what they needed, or they can integrate it with what they have, or they didn't have the technical expertise to actually make it work. So, absolutely, this needs to be a company that doesn't just deliver a code, but that supports it and develops it. And that's a challenge.
Ellen Goodman [00:31:41] It is. And coming back to this Reuters Institute report, I thought one thing that was quite interesting about it was that the surveyed publishers are quite sanguine about the fortunes of their own publications. They see that they've taken a turn. They're climbing out of the doldrums of their digital ad fiasco. They're focused on subscriptions. They feel like they've got their sea legs in terms of social media, and reaching out on TikTok and Instagram. And on the one hand, they're saying, what about that? On the other hand, they're very pessimistic about the news industry as a whole, in part because of polarization and distrust. And I think, you know, and I sort of want to connect that point to what we're talking about here.
Open Markets focuses on competition, independence and resiliency, on the one hand, as the substrate for a vibrant democracy and for liberty, and also focuses on transparency, knowledge, and openness about how data is being used and how the economy is functioning. One of the reasons why I think your piece has such force is because it's Jeff Bezos, and we have reason to be suspicious about how his companies have operated, both on the competition front and on the opacity front. I want to ask you, you know, in your vision and your solutions space, one of the things that would seem to be important is not just that it's functional and that it solves publications’ needs, and that it's some sort of public infrastructure, but also that it provides people a reason to trust how news organizations are using their data, and also gives news organizations a reason to trust how the backbone is kind of using their data, hacking into their data, safeguarding their data. I've thrown a lot at you, but I guess to put a point on it, my question is how do you imagine a kind of public infrastructure would deal with this question of rampant distrust, of data abuses, both from the public's perspective, the consumers of news products, and also the customers perspective, the news publications themselves?
Dan Froomkin [00:34:23] Great question. Let me talk to you a little bit about, first of all, about competition, which is even if Bezos isn't going to consider sending us to nonprofit. Is there enough competition in that space? And so far we're seeing the Arc is winning eight of the 20 largest print newspapers. It looks like it may continue. What is the limit? At which point you say, "No, we need to have competition because people do need to have choices because that's one of the ways that they decide, I don't trust you anymore. I'd like to go someplace else." If you don't have any place else to go, what do you do with that mistrust? On the other hand, I think the answer to trust is transparency, as you mentioned that, too. And that clearly transparency is not something that comes naturally to Jeff Bezos, and the Amazon. Arc is a black box. I think precisely if you put it in the hands of a nonprofit, they would not have any sort of financial motive to keep information from people. I think all of it would be very transparent. And if in fact this public infrastructure could model the best forms of data hygiene and responsibility, and promises not to surveil. I don't know, but you tell me. I mean, how do you see one of these full stacks operating?
Ellen Goodman [00:35:51] Well, I think there's a little bit of a tension here between what kinds of values, methods, and commitments this nonprofit might have and reflect in a way that's in the public interest -- pro transparency, against surveillance, against data exploitation -- and what might be in the interest of news publications. I think one problem here is that news publications want to do targeted advertising. Many of them do. They need to really develop these relationships with the users, and sometimes that can be exploitative to users, but it's in the interest of the news publication and arguably, in the interest of democracy, because it keeps these news publications going. So, I think there's a tension between sort of commitments to the most sort of pro-social, privacy protective values, and the needs of the news publications. I think one answer is Arc, the nonprofit might be another answer or response, but I'm not sure it's clear how you balance out that tension.
Dan Froomkin [00:37:12] Well, I just I want to push back and say these organizations have a history of having relationships with their readers, and that's a good thing. One thing that drives you crazy is when you say, "We're collecting this information to serve you better." No one is collecting it to service better. They're collecting it to exploit me. But a local news operation actually could be doing that. It could be doing that to say, "We will then help you see news that's closer to you. We will help you see sales that are near you. We will help you if you tell us which stories you like – we'll tell you what's going on there." That sort of stuff. There's nothing inherently wrong with the news organization knowing a lot about you, if it can actually then say, "Here's some information that you will find helpful." So, I don't think we should swear off any kind of personally identifiable information. I just think that people have gotten very accustomed to it being used against them rather than for them.
Ellen Goodman [00:38:19] OK. I'm just sort of looking at the time. Alright, is there anything we haven't covered that you want to cover from your piece or about Arc? And I don't think you've mentioned Zeus for some time.
Dan Froomkin [00:38:37] Well, Zeus is their ad technology. My understanding since I wrote the article is that it's in flux right now. So I'm not exactly sure what their plans are with that. But the original plan was to create an ad market that was distinct from Google – especially Google – and Facebook, and then serve up ads in a very fast and effective way. That's one of the things that I think they're working on as well. And of course, it's essential to these organizations. As for what else is left out? I don't know. There's so much complexity here. I I'm just hopeful that that Bezos is, after buying The Washington Post back in 2013, was seen as an act of generosity and saved that news organization and created, among other things, this terrific technology platform, that that could end up being an undeniably good thing. And in fact, I'm actually writing a piece right now about The Post in general, now that Bezos has started getting political in his tweets and has now hired all three positions of leadership there, as to whether The Post needs to become more independent entirely from Bezos, whether the entire operation should be spun off as a nonprofit in a way to actually fulfill what Bezos said he was going to do when he bought The Post in the first place.
Ellen Goodman [00:40:15] When we talk about a sort of public infrastructure, and we've been talking about journalism, [but] there's another potential client for public infrastructure which are public entities. One of the things, if you remember a year ago when the Australians passed this provision requiring the platforms to pay for news, they, for a minute, sort of shut down civic information about... I forgot exactly where it was, but health information coming from the government, election information. And it highlighted the fact that commercial platforms are gatekeepers for municipalities, and for governmental sources of information. In a sense, they need content management systems as well. And they also need to optimize their content for their audiences to cultivate relationships with their audiences or constituents. Do you imagine that a sort of public Arc would also serve municipalities, school districts, and public libraries?
Dan Froomkin [00:41:42] Well, I was actually quite taken by the vision that you described in your paper of a public media that extends all the way down to local institutions, like libraries and schools, and so on. That would be part of the tech stack, presumably, that is also serving the needs of the news organizations. I can't answer your question, but I can say that this is really exciting stuff to think about, and certainly stuff that ought to be in the public policy arena, and certainly stuff that we ought to be alarmed at when somebody is taking over too large a chunk of the market, and certainly alarmed when we see all these newspapers dying. These cities and these towns that don't have newspapers, finding the public is less informed about everything, including what they do, I think there's some really interesting holistic questions here. And I don't think we as a society has looked at the fact that we need to do some thinking, some investing in, you know, what Ethan Zuckerman calls "the digital public infrastructure," and what you talked about being so necessary in public media.
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Ellen Goodman [00:42:52] Yeah. Now going to some questions. So, you know, some people don't realize that in public media, one of the things that's funded and in fact, it's less controversial than content because it tends to be sort of content neutral, are some of these back-office functions. And so there's a question that there have recently been some legislative initiatives to fund journalism and to level the playing field for publishers competing for ad dollars. Should we consider adding some specific earmarking to help newsrooms improve their content management platforms as well? Some of these back-office things. And another way to put it is should we do in the digital world what we what public, what the Public Broadcasting Act did in the analog world for sort of these some of these back-office functions?
Dan Froomkin [00:43:40] No, I think it's a great idea. I think that there are so many different ways to approach this problem, and there are so many different problems. I think that's one very nice solution answer.
Ellen Goodman [00:43:54] How much money do newsrooms generally invest in these content management systems?
Dan Froomkin [00:44:00] Well, that's fundamentally the issue, of course, is that what ultimately distinguished Ark and Bezos was that he poured a lot of money into it, and he said, “Look, this is going to pay off in the long run.” And that's not the way most news organizations work these days, because they are in terrible financial straits, and they're especially the ones that are owned by hedge funds and that are public and public stock. They can't make these huge long-term investments that Bezos did. I was, you know, one of the people I talked to was the guy who was running the content management systems at the Dallas Morning News. And they had actually spent a couple million bucks, you know, trying to build a content management system that they thought would be really terrific. And then they realized that they spent 100 million bucks and his was like wildly better than anything they could ever do. So they bought into the Arc. It's a hard thing about it. It's a hard sell to tell any individual organization. You want to spend an enormous amount of money on content management when A) somebody else already has and, B) you shouldn't have to because ideally this would be a public good. The newsroom's cheap. We know that.
Ellen Goodman [00:45:17] OK. So a question about data and targeted advertising. So you gave the example of sort of newsrooms having benign attempts to develop relationships with their users. One could also imagine, and this is especially as there's more and more regulation and self-regulation about third-party collection of data, there is therefore a corresponding power of first-party collection of data. So between the news organization and their customer, that grows and that becomes a more valuable asset. The data that the news organization can gather from its users and yes, maybe to serve up better content, but maybe also to personalize political ads or to do other kinds of targeted advertising. And so what would you think? Would you support a consortium, for example, of publishers that made sort of that first-party data available to ad services or political campaigns or otherwise kind of exploited that first-party data that they were in a position to collect?
Dan Froomkin [00:46:41] I mean, I don't know about the that market or that industry, but what strikes me is that no matter how much data a newspaper collects on somebody, it's nothing compared to what Google already knows about you and Amazon or any of those about you from looking at your shopping habits or searching habits, who would have used that and your location tracking and all that stuff. So I'm not sure that's a marketable thing. I don't know.
Ellen Goodman [00:47:10] OK. Another question. How do we incentivize Bezos? What would the incentives be to get them to do this?
Dan Froomkin [00:47:19] Well, carrots and sticks, right? I mean, the stick is that he's starting to get a reputation. That's not necessarily exactly what he wants. I mean, I know there are some people, even within Arc, who weren't really aware of what was going on and who had second thoughts about working there. And other companies, other news organizations might avoid him. Then there's the possibility – another stake – of course is regulation. And, you know, should there be a limit to how much market penetration one person's allowed to have? Should it be split up? Obviously, if Amazon is split up, that has ramifications that are sort of somewhat relevant here. And then the second is the carrot. I mean, the thing is, he could get a lot of good PR and a lot of real genuine affection from the news community and from the general community, If he said, “Look, I'm going to make this – I realize this is really important. I realize that this is something which I built that could be a service to a lot of people, and I'm going to give it to them.” What's it for him? It's chump change. So. So what he needs is some good friend to come out and say, “Hey, this is a pretty good idea. You get some, you know, you earn some legitimate love here.”
Ellen Goodman [00:48:34] OK. Audience, that I s your call to arms. And I think, you know among the customers here are foundation-supported nonprofit news organizations. There are public media clients. Are you, I mean, are you surprised that they are customers of Arc? Do you think they should be taking, they should be sort of leading this push for carrots or sticks to throw it into a nonprofit? Should they be patronizing some of the competitors?
Dan Froomkin [00:49:10] That's a very provocative question. I don't know. I think they're entitled to do what they think is best to get by. I mean, the Lenfest Institute, which owns the Philadelphia Inquirer now, I think it's been doing a fantastic job of managing that resource. I think they chose Arc because they thought it would serve their needs the best. And I don’t think at this, you know, certainly until my article came out, I don't think it was a big moral decision whether or not to use Arc. Now, maybe it is.
Ellen Goodman [00:49:41] OK. Thanks a lot. I think we're handing it back to you, Jody.
Jody Brannon: [00:49.51]Yes. You've both made remarkable comments that have my mind spinning. So I can imagine, given the threads you've touched on, that our audience is has opportunity for a lot of follow up. But maybe I could toss it back to you for each a minute of closing remarks or a main takeaway that you'd like our audience to think about. First you, Dan.
Dan Froomkin [00:50:11] Well, I said, I think people don't appreciate just how hard it is to do news online and how much help we could benefit from as an industry. And I just want to say thank you to the Open Markets Institute for helping me find this story and write it.
Jody Brannon [00:50:35] Yeah. I can say we put you through the ringer on that, Dan,and you turned out a incredible piece of work. But Ellen, also, what are some of your takeaways?
Ellen Goodman: Yeah. Sorry. I really appreciate being here and I love the piece. I have to say, I'm still not totally convinced that that that Arc is the next Amazon in this context. But I do want it, ut I do think what it raises is the importance of infrastructure, sort of the hidden infrastructure, and how important it is for that infrastructure to be decentralized, to be resilient for us not to be reliant on a single solution and certainly a single solution that's vertically integrated with lots of other behemoths that we are at risk of losing really valuable voice if that happens.
Dan Froomkin [00:51:33] I'll just add that I agree. It's not it's not Amazon yet. But your point before was what if we had a chance to really think whether Amazon was serving the national interests before it became Amazon? We knew what it might turn into.
Jody Brannon [00:51:50] And as far as what it might turn into, I think we can now turn to Phil Long for some closing remarks on some big picture and open market analysis. Phil?
Phil Longman [00:52:02] Well, thank you, Jody, and thank you so much, Ellen and Dan, for that very stimulating conversation. I'll just briefly observe how much this conversation underscores the importance of public policy and structuring markets, the role of markets, public policy in the form of regulation, subsidy, and also competition policy, antitrust and such. I mean, it's worth pausing to consider that if this were 1975, Amazon itself would be illegal under the antitrust regimes that were in place at that time. There's no way any kind of single entity could exist in all the adjacent markets that Amazon does. In the realm of, of, of media markets, I think it's worth reflecting how we have been here before and what we might learn from it.
For example, when the telegraph first came along, it radically transformed the news business, including the print news business. No newspaper could compete in the media markets of the 1880s without having access to the telegraph. And naturally, certain people, robber baron types like Jay Gould, tried to get simultaneous control of telegraph companies and newspapers because owning both was just incredible. And as a society, we came to a solution to that. We in the early 20th century, we said that telegraph companies are essential infrastructure. They can be privately owned, but they have to operate as common carriers. They can't discriminate against different, users. And when the telephone came along and eventually supplanted the telegraph, we played the same common carrier rules that. That didn't mean socializing or nationalizing those essential infrastructures. It didn't mean subsidizing them. They were privately owned, but it meant constraining the rules of competition over which they could operate. AT&T, for most of the 20th century, tried desperately to get into electronic publishing because they understood the incredible advantage that they would have as a central, central information infrastructure and a media business. Right. And we said no until the late ‘70s when we started this mantle alert regulation and competition policy in this realm. So anyway, thank you again so much. And I think as we go forward, it is very useful to bear in mind how much these dilemmas of the media of democracy are related to competition policy. Thank you so much.
Jody Brannon [00:54:54] Thank you. Phil, generally, I think we're going to be closing our hour today. I want to thank both Dan and Ellen for being so generous with their time and their insights. And I also want to thank our main coordinator with ACT-TV, Kat Dill, who's at the helm today despite testing positive yesterday. We’ll be sending this link out to all of you who've registered and the link will be live on our site and on YouTube channel and available across C-SPAN's Network. You know, the whole conversation reminds me of a point when I was at WashingtonPost.com and we were having a luncheon. I told Donald Graham, the owner of the Post then, that my title was manager of news and production, and his eyes got big. And he says, “You mean you're in charge of the printing press and the news operation?” And I thought it was a seminal moment for him. And what this conversation makes me think about is how many journalists want to just worry about covering their communities and not have to worry about technology so much. So I guess we'll leave this conversation now to see what happens next. And I hope that you'll stay in touch with the Center for Journalism and the Open Markets Institute. Thanks again for coming and have a great day.
This article originally appeared in The Corner newsletter of July 14, 2022.