Leader: Google needs media industries as much as they need it

2 July 2009 | By Justin Pearse

Is Google a vampire or a benefactor helping an industry struggling to reinvent itself for the digital age? The media industry has a fractious and often contrary relationship with the company. On one hand, it drives huge amounts of traffic to publishers’ websites and, through YouTube, offers a gigantic audience for record labels , TV and film companies. On the other, as the ongoing legal tussles over the past few years have attested, Google is seen as having a cavalier approach to other people’s content.

Google has been publicly accused by Rupert Murdoch for stealing copyright, labelled a parasite by ITV’s Michael Grade and, just last week, described as an internet vampire by Wall Street Journal chief executive Les Hinton. But the most apposite moniker remains Sir Martin Sorrell’s “frenemy”.

The headline-grabbing posturing of the traditional media industry obscures the hard bargaining behind the scenes by media and marketing companies to strike beneficial deals with Google. A great example of this is the first UK deals struck by magazine publishers to sell advertising around their own content on YouTube themselves. The move is both a pragmatic recognition of each side’s strengths and a further demonstration of the new battle between scale of distribution and quality of content. Google has struggled to monetise YouTube and has accepted that skateboarding cats won’t sell ads. The publishers of quality content see YouTube’s audience as attractive but are no longer prepared to relinquish commercial control of their content, especially as YouTube’s scale will only be truly beneficial if sold by their experienced sales teams in an integrated way.

So while it may be surprising to see Google give up any element of commercial control, this sort of move is only going to become increasingly common as the internet giant wakes up to the fact that it needs the media and marketing industries as much as they need it. While Google’s ‘Don’t be evil’ credo may be under more scrutiny than ever, the publishing industry will be forced to sleep with the frenemy.

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