There they were, François Hollande, the president of France, and Eric Schmidt, the executive chairman of Google, doing what the leaders of middle-ranking powers do so well: holding a joint press conference, shaking hands while posing for the camera signing important-looking documents. And what was it all about? In short, a €60 million bailout. Cheap at the price on the face of it, but the bulk of the iceberg is beneath the surface, as we all know. To put in in context, “France on the Verge of a Nervous Breakdown” by Robert Zaretsky is a good place to begin. It offers a concise overview of an ailing country in search of meaning and led by an unpopular president nicknamed, “Flanby” (a custard desert popular with children). “Slightly less than half of the respondents in a recent poll think Hollande capable of making the right decisions for France, while scarcely one in three believe he can unite the nation,” writes Zaretsky.
When he’s not busy invading Mali or signing deals with Google, President Hollande is musing about monetary policy. “The euro should not fluctuate according to the mood of the markets,” he told the European parliament in Strasbourg yesterday. “A monetary zone must have an exchange rate policy. If not it will be subjected to an exchange rate that does not reflect the real state of the economy.” And this brings us back to business, specifically, the business of publishing, and the bailout deal that was done in Paris last Friday.
Frédéric Filloux, perceptive as always, turned out a comprehensive Monday Note post on the agreement titled The Google Fund for the French Press. Towards the end, he puts his cards on the table:
“I personally believe it could be immensely beneficial for digital media to partner with Google as much as possible. This company spends roughly two billion dollars a year refining its algorithms and improving its infrastructure. Thousands of engineers work on it. Contrast this with digital media: Small audiences, insufficient stickiness, low monetization plague both web sites and mobile apps; the advertising model for digital information is mostly a failure — and that’s not Google’s fault. The Press should find a way to capture some of Google’s technical firepower and concentrate on what it does best: producing original, high quality contents, a business that Google is unwilling (and probably culturally unable) to engage in.”
Lauren Weinstein, however, sees the deal rather differently: “Whether we call it Tribute, Danegeld, or just plain blackmail and extortion payments, there is little evidence to suggest that ‘paying off’ a party making unreasonable demands will do much more than quiet them for the moment, and they’ll almost inevitably be back for more. And more. And more… France’s success at obtaining financial and other concessions from Google associated with ordinary search and linking activities sends a loud, clear, and potentially disastrous message around the planet, a message that could doom the open Internet and Web that we’ve worked so long and hard to create.”
The Google-France deal is a messy compromise that will do little to change the calamitous state of the Fourth Estate in a land that’s lost its way. Commenting on the Frédéric Filloux post, Jonathan Miller writes: “The devil is in the details but it would be tragic if Google helps preserve the corrupt, rotten French press. With its self-censorship, layers of subsidies , special tax regimes for journalists and unreformed unions, I’d suggest that the only way to save the French media is to let it die so something better might replace it.”
To see how rotten things really are, one has to look at Italy, where the country’s two largest newspapers get some €43 million in public subsidies each year. Corriere della Sera gets €24 million and La Repubblica pulls down €19 million. Their websites are ugly awful and there’s not a hint of digital innovation to be seen. And just as with newspapers in France, they have ceased to be independent, reliable and unbiased sources of news.
Bailouts for this lot are a very bad idea.