NewsCorp Legacy Media vs. Digital Platforms Facebook and Google in Australia

While many nations and trade groupings have or are developing ways to protect personal data and constrain digital giants in Facebook and Google, traditional media groups are also looking for assistance.

 

NewsCorp and other media groups in Australia first demanded an ACCC Australian Competition and Consumer Commission investigation of digital platforms use of media snippets and content, then demand that the same platforms should pay for this service.

 

However, many in traditional media, the ACCC and government do not seem to understand how digital works, the reliance elsewhere too on digital click throughs, that advertising has migrated from printed etc. to digital and middle aged down to youth have also migrated…..

 

‘Australia to make Facebook, Google pay for news in world first

 

Colin Packham

 

SYDNEY (Reuters) – Australia will force U.S. tech giants Facebook Inc (FB.O) and Alphabet Inc’s (GOOGL.O) Google to pay Australian media outlets for news content in a landmark move to protect independent journalism that will be watched around the world.

 

Australia will become the first country to require Facebook and Google to pay for news content provided by media companies under a royalty-style system that will become law this year, Treasurer Josh Frydenberg said.

 

“It’s about a fair go for Australian news media businesses. It’s about ensuring that we have increased competition, increased consumer protection, and a sustainable media landscape,” Frydenberg told reporters in Melbourne.

 

“Nothing less than the future of the Australian media landscape is at stake.”

 

The move comes as the tech giants fend off calls around the world for greater regulation, and a day after Google and Facebook took a battering for alleged abuse of market power from U.S. lawmakers in a congressional hearing.

 

Following an inquiry into the state of the media market and the power of the U.S. platforms, the Australian government late last year told Facebook and Google to negotiate a voluntary deal with media companies to use their content.

 

Those talks went nowhere and Canberra now says if an agreement cannot reached through arbitration within 45 days the Australian Communications and Media Authority would set legally binding terms on behalf of the government.

 

Google said the regulation ignores “billions of clicks” that it sends to Australian news publishers each year.

 

“It sends a concerning message to businesses and investors that the Australian government will intervene instead of letting the market work,” Mel Silva, managing director of Google Australia and New Zealand, said in a statement.

 

“It does nothing to solve the fundamental challenges of creating a business model fit for the digital age.”

 

Facebook did not immediately respond to a request for comment.

 

“UNFAIR AND DAMAGING”

 

Media companies including News Corp Australia, a unit of Rupert Murdoch’s News Corp (NWSA.O), lobbied hard for the government to force the U.S. companies to the negotiating table amid a long decline in advertising revenue.

 

“While other countries are talking about the tech giants’ unfair and damaging behaviour, the Australian government … (is) taking world-first action,” News Corp Australia Executive Chairman Michael Miller said in a statement.

 

A 2019 study estimated about 3,000 journalism jobs have been lost in Australia in the past 10 years, as traditional media companies bled advertising revenue to Google and Facebook which paid nothing for news content.

 

For every A$100 spent on online advertising in Australia, excluding classifieds, nearly a third goes to Google and Facebook, according to Frydenberg.

 

Other countries have tried and failed to force the hands of the tech giants.

 

Publishers in Germany, France and Spain have pushed to pass national copyright laws that force Google pay licensing fees when it publishes snippets of their news articles.

 

In 2019, Google stopped showing news snippets from European publishers on search results for its French users, while Germany’s biggest news publisher, Axel Springer, allowed the search engine to run snippets of its articles after traffic to its sites to plunged.’

 

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Digital Challenges to Traditional News Media Models

In Australia, and internationally, traditional or legacy print media is being challenged not by its importance in informing people e.g. during bushfires, Covid-19 crisis etc. but related challenges of economics, populist politics, innovation or lack of and now preferred use of digital channels and major social media like Facebook and Google by most people nowadays.

 

Following are excerpts from articles outlining challenges of populism, PR, social media or atomisation of channels, and possible solutions to support news, democracy, innovation and business models in a digital world.

 

From Inside Story Australia:

 

How disasters are shaping Australians’ news habits

 

A new study tracks the rise in news consumption during the bushfires and the pandemic — and finds a glimmer of hope for publishers.

 

In times of great uncertainty, readers and viewers will seek out reliable, accurate and up-to-date news — doubly so when their own safety and wellbeing are at stake. But will the news media continue to be there when they’re needed?

 

The latest Digital News Report: Australia, the sixth annual study of national news consumption trends, provides further evidence that Australians still rely on the news media — directly or indirectly — regardless of its financial difficulties…..

 

….News businesses, digital platforms and the government will need to reconsider how to maintain a healthy news ecosystem and keep citizens informed. Paying attention to what news consumers are telling us would be a good starting point.

 

Our survey confirmed that social media and search are now the two major pathways to online news, with a growing number of people accessing news through mobile alerts, newsletters and aggregator apps. News consumers are trying to find efficient ways to curate and organise the vast amount of news available to them. Rather than go directly to the news-brand websites themselves, audiences are increasingly relying on Google and Facebook to find what they want….

 

….But we know news media businesses are struggling to adapt to the digital environment, and we know they haven’t yet found a sustainable means of surviving.

 

From The Conversation Australia:

 

Media have helped create a crisis of democracy – now they must play a vital role in its revival

 

In May 2020, with the world still in the grip of the coronavirus pandemic, Margaret MacMillan, an historian at the University of Toronto, wrote an essay in The Economist about the possibilities for life after the pandemic had passed.

 

On a scale of one to ten, where one was utter despair and ten was cautious hopefulness, it would have rated about six. Her thesis was that the future will be decided by a fundamental choice between reform and calamity….

 

….She was writing against a backdrop of a larger crisis – the crisis in democracy. The most spectacular symptoms of this were the election of Donald Trump as president of the United States and the Brexit referendum. Both occurred in 2016, and both appealed to populism largely based on issues of race and immigration….

 

How the pandemic contracted the media landscape further

 

Alongside these developments, the existential crisis facing news media was made worse by the coronavirus pandemic. As business activity was brought to a stop by the lockdown, the need for advertising was drastically reduced.

 

Coming on top of the haemorrhaging of advertising revenue to social media over the previous 15 years, this proved fatal to some newspapers…..

 

Defending against the digital onslaught

 

At a national level, the Australian government took up a recommendation by the Australian Competition and Consumer Commission to force the global platforms, particularly Facebook and Google, to pay for the news it took from Australian media….

 

Populism and scapegoating

 

A third factor in the crisis, exacerbated by the first two, is the rise of populism. Its defining characteristics are distrust of elites, negative stereotyping, the creation of a hated “other”, and scapegoating. The hated “other” has usually been defined in terms of race, colour, ethnicity, nationality, religion or some combination of them.

 

Powerful elements of the news media, most notably Fox News in the United States, Sky News in Australia and the Murdoch tabloids in Britain, have exploited and promoted populist sentiment……

 

From Mumbrella Australia:

 

Publishers: Stop expecting handouts from Facebook and Google, start innovating

 

 

Facebook and Google direct enormous volumes of traffic to news publishers. But instead of paying for the privilege, like other brands do, publishers expect to get paid. Simon Larcey says that instead of the ‘last-ditch, half-assed cash grab’, media companies need to, unsurprisingly, innovate….

 

……In a nutshell, this sums up the ludicrous move by the Australian Competition and Consumer Commission and local news publishers, which have demanded that Facebook and Google cough up cash for any news content that the digital giants share across their platforms. And with Google agreeing to play ball last week, it looks like these demands are being met.

 

While some might regard this move as a digital giant throwing a lifeline to a drowning local news industry, other, more cynically minded people – myself included – might see this a move as one developed by Google’s PR department to win the hearts and minds of stakeholders. Putting Google’s motives to one side, there’s a risk that this is yet another nail in the coffin, an admission of defeat by local publishers who are no longer able to successfully compete….

 

The problem with handouts

 

Welcome to 2020, and after years of lobbying, the government has decided that if the news publishers of Australia cannot build a sustainable digital advertising revenue model, the two tech platforms will be strong-armed into footing the bill……

 

…….The numbers from the digital giants are probably even larger today. At least 50% of all news traffic is directed to Australian news sites via third parties. If Australian news providers did not have these two platforms, their traffic would be cut in half, and they would generate half the ad revenue. Any brand or marketer wanting to get that type of traffic to their site would pay Facebook and Google big money – in fact they do – yet Australian publishers think they should be paid for the privilege. It makes no sense.

 

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