New laws forcing tech giants Google and Facebook to pay news organisations for access to their journalism will be introduced in Australia.
Today I would like to talk to you about the new mandatory bargaining code which is the result of many years of complaints from traditional media outlets that social media platforms benefit from the hard graft of journalists without paying a cent for it.
Google and Facebook have long argued in response that media organisations are overlooking the benefit they derive from referrals and clicks through to their websites.
But Treasurer Josh Frydenberg is siding with the broadcasters and publishers, saying advertising revenue in areas such as print newspapers has plummeted by 75 per cent since 2005.
“For every $100 of online advertising spend, $53 goes to Google, $28 goes to Facebook, and $19 goes to other participants,”
— Treasurer Josh Frydenberg said.
In my opinion this doesn’t make sense and I side with Facebook and Google because news outlets for years have ignored the fall in there traditional print medium and social media provided a great source of referral traffic to their stories with the chance for them to sell their gated membership access which is ongoing and has a better life time value than simple advertising revenue.
How will it work?
We’re yet to see the actual legislation, but the Australian Treasurer and Communications Minister Paul Fletcher gave an indication of how it would work.
Social media companies will be encouraged into negotiations with media companies over how much they will pay for access to their content.
Tech firms are now encouraged to negotiate with Australian publishers. The exact rate would be determined by the two parties. Smaller media companies would also be able to band together to bargain as a group, or agree to “standard” offers made by the tech platforms.
The only two platforms part of this so far are Google Search and Facebook NewsFeed, but the Treasurer would have the power to “designate” other platforms if they become big enough players in the market.
The Australian Treasurer has decided to exclude YouTube from the code for now.
There’s no dollar figure on exactly how much media companies would be paid, as that’s still up for negotiation under each deal.
What happens if they don’t reach a deal?
If the media outlets can’t strike a deal with Facebook and Google, or are unwilling to do so, they get forced into arbitration where a decision is made for them.
Australian Treasurer Josh Frydenberg said their appointed independent decision-maker would have to take into account the various characteristics of the media organisation involved and its presence on the social media platform, as well as considering the benefit to the news organisations from the eyeballs on their product.
Another shady element of the code is related to how the social media companies actually run their operations, with a new requirement for Google and Facebook to alert news outlets 14 days ahead of any changes to their algorithms (which prioritise how news content appears on their sites). This would give the news outlets an advantage and would give them inside information on how the algorithm change way before anyone else. The algorithm is social media companies secret source they need to keep it seem secret.
What will the result be?
Google and Facebook’s opposition to the measures in the past has been pretty clear.
Facebook went so far as to cut Australian news content from its platform altogether, arguing it didn’t contribute much to its revenue and it could live without it.
The company also said it supported Australian journalism in other ways, through standalone funding and grants.
So, one result of this could be significant changes to how people access their news, particularly if they use Facebook and Google as the forums where they find their news.
But, it could also prop up ailing media businesses, brought to their financial knees by changing audience trends and the coronavirus pandemic taking a sledgehammer to already dwindling advertising revenue. But this is the outlets fault for being so stubborn.
My Thoughts and Predictions
For a long time a lot of print journalism has been stuck in the dark ages stubbornly ignoring the digital age. In my option it’s a long time coming, a lot of news outlets adapted to the digital way and have made money from it so when COVID 19 hit they where not struggling to pull in advertisers. Putting in pointless laws makes no sense and making companies reach deals should always be the last resort.
Saying Facebook and Google are profiting off news outlets is only a half truth when you think about the sheer numbers they allow a news outlet to reach for every article. if we think about it the news outlet could always put a pay wall in place making the user sign up to read the full article like many outlets already do.
I agree with facebooks actions of banning it because they should not have to pay for news content when it alone distributes it.
I think this was a stupid move on Australia’s part and in the long run will hunt Australian publishing.
That’s all for today until next time this has been Jack Thomson’s