News organizations face market failure from zero-click search and AI scraping
Maria Ressa described the current environment as a period of market failure for news organizations, citing an 85% drop in referral traffic. She argues that traditional advertising models are dead, forcing publishers to pivot to tech and data services.
Maria Ressa, former head of Rappler, described the current environment as a period of market failure for news organizations. She cited that zero-click search has caused referral traffic to news sites in the Philippines to drop by 85%. Additionally, Facebook, once the largest distributor of news globally, saw its news distribution drop by 60 to 70 percent by 2024. Ressa noted that 53% of internet traffic is now non-human, with AI companies scraping news content, which increases server costs for publishers without providing revenue. Rappler, a news organization of about 100-120 people with $5 million in annual revenue, pivoted to create a sister company, Nerve, which uses NLP and data analysis to combat disinformation. This tech division now contributes roughly 40% of Rappler's revenues, helping the organization survive after losing 49% of its advertising revenue in 2018. Ressa argues that the traditional advertising model for news is dead and that news organizations must pivot to tech and data services to survive the decline in referral traffic and the rise of AI scraping.