Google is currently developing a new version of its digital subscription model that would see the company start sharing a significant portion of all subscription revenue with media outlets, Financial Times reported on Sunday, citing Google Vice President of News Richard Gingras. Mr. Gingras said that the actual revenue share ratio would be heavily in favor of news publishers and the Alphabet-owned company would only take a minor cut of any proceeds generated through digital subscriptions it helped conclude. The 65-year-old said that the share would be even more favorable than it is for traditional ads served by the firm who gives at least 70 percent of ad revenue to publishers.
The business model itself would potentially allow traditional media companies to reach out to more consumers interested in buying subscriptions from them, with Google possessing vast amounts of user data allowing the company to profile virtually all demographics targeted by the media industry whose revenues have generally been moving in an inversely proportional manner to those of Google in the last two decades. Some media executives reportedly still aren’t supportive of the initiative due to the fact that they want to avoid a scenario in which they become even more reliant on Google to generate readers, viewers, and subscription sales, though the program would still likely be a major success due to the company’s pull in the digital segment and the fact that many small and medium-sized media outlets would presumably be more than keen on taking advantage of its offer and tapping into a larger pool of potential subscribers.
Mr. Gingras specifically pointed out that Google isn’t seeking to be the dominant power in the subscription business model that’s currently in the making and wouldn’t try to own any publishers, in addition to dismissing suggestions about the move being an attempt to diversify the company’s revenue stream. News of Google creating another platform for helping publishers comes shortly after Facebook did the same, with the social media giant also opting to support a subscription-based business model with its Instant Articles. On a related note, Google recently announced a revamped subscription policy and stopped penalizing media outlets for implementing hard paywalls with lower Search rankings.