Is Government intervention viable, or just a favour for Rupert Murdoch’s News Corp and Peter Costello’s Nine Entertainment? Opposition is growing both locally and globally to media laws introduced by the Coalition Government requiring tech giants Google and Facebook to pay for displaying news content. Kim Wingerei delves into the numbers.
Not only is there no business case for the changes – apart from a gift to decaying mainstream media businesses – but US trade officials have slammed the bargaining code as possibly contrary to the US Australian Free Trade Agreement, and the man who started it all, claims the regulation is contrary to the very idea of the Internet.
Sir Tim Berners-Lee, the computer scientist who in 1989 invented the world wide web is undoubtedly a dispassionate voice in the debate, given he could have made a squillion from his work but instead gave it away. As Sir Tim stated:
“Had the technology been proprietary, and in my total control, it would probably not have taken off. You can’t propose that something be a universal space and at the same time keep control of it.”
In a submission to the Senate inquiry on the News Media and Digital Platforms Mandatory Bargaining Code bill, Berners-Lee said the ability of web users to link to other sites was “fundamental to the web” and that the the proposed media code could break it because they risked setting a precedent that “could make the web unworkable around the world”.
News Corp Australia and Nine Media have been pushing hard for the proposed laws, and much of the the mainstream media are right behind it.
Google, which dominates search, and Facebook (not including Instagram and Whatsapp) represent 20% of all internet traffic.
But contrary to the arguments of the legacy media – principally Rupert Murdoch’s The Australian and Nine’s Australian Financial Review – Google argues that the mainstream media benefit at least as much from Google as the other way around.
For example, last month (December 2020*), 18.5% of visits to news.com.au came from Google. In other words, Google search drives one in five visitors to news.com.au by people clicking on links in Google search results. Yet News is claiming that Google should pay for using News’ content. As was pointed out by respondents to the ACCC recommendations, News and others can easily remove its content from Google (a single line of code takes care of it) but of course, they won’t.
Google estimates that advertising revenue directly attributable to news content in Australia is $10 million. Without any documentation, it is hard to verify that figure. Regardless, the true figure is likely to be well below the $600 million claimed by Nine chairman Peter Costello and others. Especially given that Google’s total revenue in Australia is $4.8 billion (in 2019) and Google News represents just 0.5% of Google’s total monthly visitors (December 2020*) – or $24 million in revenue terms.
Granted, that is a simplistic calculation, but although Google does make a lot of money from advertising – money that was once directed to the mainstream media – it is not because Google uses news content to generate it.
Facebook (and social media in general) is a different story, but not necessarily a more compelling one for the agitators in the mainstream media. Of news.com.au’s traffic in December 2020, 7.5% came via social media* – two-thirds of that from Facebook.
The only content, including news content, that appears on Facebook’s platform is that shared by a user. The media platforms themselves also share articles, but to a limited degree.
There is virtually no directly attributable link between news-style content and Facebook’s advertising revenue. Moreover, Facebook reported $674 million of revenue in Australia in 2019, a figure that may well be higher thanks to – ahem – international tax accounting measures. Nevertheless, the old, failing mainstream media companies are clutching at revenue straws.
The power and reach of Google and Facebook is undoubtedly of great concern, and the tech giants have been heavily criticised for overreach recently when Twitter and Facebook banned President Trump from their platforms.
In Australia, Google has played its own power games by experimenting with excluding mainstream media content from its search results, drawing widespread opprobrium.
However, trying to force the tech giants to share their revenue with the old and declining media companies is both a furphy and irrelevant.
The ACCC inquiry that led to the proposed law was designed to provide support for the contention that the online platforms have an unfair advantage over old media. But what the inquiry (and its instigators News Limited and Nine Media) failed to mention was that the advantages were achieved because other companies grabbed the online opportunities of the Internet, while the erstwhile media giants sat on their hands.
The Internet has not only changed how we consume news, but also how (and how much) we pay for it, how it is distributed and the cost to produce and publish. The old model of advertising and subscription is no longer working. And as Noam Chomsky and Edward Herman explained in their book “Manufacturing Consent” in 1988, it was always a flawed model where advertisers and other vested interests directly and indirectly influence what gets published and how.
News Limited and Nine Media claim they are fighting for quality independent journalism. But News Limited, in particular has descended into unabashed partisanship – effectively a propaganda arm of the LNP Government; while the old Fairfax mastheads are increasingly focused on infotainment content.
The flag bearers of independent journalism in Australia are now the ABC, although some critics would argue it is increasingly muzzled as a result of a reliance on Government for funding, The Guardian and a growing plethora of nimble, diverse and competent independents – all focused on online distribution.
Citizenship journalism and commentary is also growing world-wide on platforms like Medium, Substack and many more, with podcasting the fastest growing media channel of all, even faster than YouTube. All cater to a younger audience that never reads traditional newspapers or watches the 6pm news.
The power and reach of Google and Facebook is of great concern, and the Government in general, and the ACCC in particular, should be looking at how to regulate and curb that power; also, how to tax them properly. Instead they are running not just a fool’s errand, but doing nothing to protect the consumers of media, nor strengthening competition, which should be their areas of focus.
* – according to SimilarWeb, a global web reporting service
Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.