If you read the papers, the federal government’s proposed mandatory news bargaining code seems like the sliced bread of media regulation — the breakthrough that ends the disruption of old media.
The apparent benefits are exploding: once, it just levelled the power between old media and big tech; then it returned the advertising dollars that old media shed when big tech offered a better tool.
Now in Australia it’s apparently the solution to fake news and digital echo chambers while in the United States the Google and Facebook advertising duopoly hollowing out old media is being blamed for “cancel culture”.
But by donating a new money stream to old media, the code may well end up making fake news and the opinion silos it feeds much worse.
Social media platforms act as echo chambers (or the “oxygen of amplification” as Data & Society’s Whitney Phillips best describes it). But what are they echoing?
It’s usually the words of leading political figures (from Donald Trump to Craig Kelly) mediated through hot takes from masthead opinionists or cable news commentators in the conservative media ecosystem that, through News Corp, dominates Australia.
A guaranteed income flow from big tech to old media removes the market demand of having to broaden the audience prepared to pay for the product. It exchanges the social licence given by willing users for a political licence given by a friendly government.
While the market has always been a clunky tool to force accuracy in news media — fake news is also about demand as supply — it’s always been better than the alternative of government mandate.
Right now, in the US, Fox News is finding out what happens when the market turns against you: advertisers pulling out (under pressure from groups like Sleeping Giants) and the audience going both further to the right and back to the fact-based centre.
It’s also facing bankrupt-making legal cases for broadcasting falsehoods. Voting technology company Smartmatic is suing Fox and three of its presenters for US$2.7billion over false claims they broadcast that wrapped it into the “stolen election” narrative.
This threatens to be this decade’s equivalent of the UK hacking scandal which cost the Murdoch companies more than $1.6 billion, forced News of the World to close, ended the family’s bid for full ownership of Sky UK, and ended the rise of James Murdoch. (That last bit? That’s the bit current heir Lachlan will be thinking about.)
Fox News has whiplashed. Before the case landed, it was shifting right, bringing forward its nighttime opinion programming, making its daytime news more opinionated and promoting its Trumpist presenters.
Now one of the three presenters named in the Smartmatic writ — early Trump-backer Lou Dobbs — has been moved on. As plenty of the company’s UK journalists discovered post-hacking, company loyalty ends where the family’s survival begins.
No wonder a Google/Facebook income flow seems an easier way out than dealing with an ungrateful audience. That’s why News Corp is hanging tough. (And why Canada’s old media oligopoly came out with blank front pages last week to pressure the government to help them gouge income out of the platforms.)
How much are the publishers hanging out for? In the early ambit claims, News Corp’s Australian boss Michael Miller nodded at $1 billion and Nine’s Peter Costello reckoned $600 million would do. They would be expecting between a quarter and a third of that. (One of the interesting fights to watch is what cut the Daily Mail expects for its 15% of Australia’s digital news audience.)
Google has announced a global pool of $1.3 billion, reflected in the annual €50 million French deal. This translates to about $50 million in Australia, which seems to be the basis of Google’s News Showcase deals based on the reported $2 million being paid to ACM for its 4% of the digital market.
Given the pressure on Google (and its continued profitability) expect the global pool (and Australia’s share) to double, with a squeaky wheel loading for Australia perhaps mediated through other Google products such as YouTube, the Play Store and Google subscriptions.
It’s nice money, although it may end up hurrying on old media’s day of reckoning with its audience.
Private Media, the parent company of Crikey, is a participant in the Google Showcase program. Content from Crikey and other Private Media brands is featured on Showcase as part of a commercial partnership.
Google does not steal content. It publishes links to content generated and uploaded to the web by others, including News Corp with, in the case of links to News Corp content, those clicking on them being taken to News Corp’s paywall. These are potential customers being delivered right to News Corp’s door. And News Corp has worked closely with Google in the past to achieve SEO, so content it uploads figures high in search results.
That perhaps, when confronted with the paywall, not as many as News Corp wants are then signing up for a subscription, or perhaps plenty do but the subscription churn rate is through the roof, is related only to the quality of their products and how many in the marketplace are attracted to those products.
If News Corp wishes to continue to be a purveyor of skewed-to-the-far-right news and lots and lots of far right opinion, then that’s its business. But in choosing to do this, it can expect for its products to continue to appeal to a good deal less than 50 per cent of the potential market and it should not be expecting – and nor should the public be tolerating – multi-million dollar handouts from taxpayers ($40 million so far is it?) and our Parliament being used to pass legislation to prop up it and other selected/preferred media companies.
You’re absolutely right; this is just a grab for cash by a corrupt corporation that can make the government do its bidding at the drop of a hat. The alacrity with which the LNP move to give Murdoch whatever he wants is disturbing. He got $40m for supposedly increasing the broadcasting of women’s sport, which will mean people have to pay to see it on Foxtel or whatever, and a few years ago the dreadful Mitch Fifield gave News Corp $30m for who knows what. Completely opaque, all these gifts. And now Murdoch has dragged a very willing Nine – another propaganda arm of the LNP – and the ABC and even the Guardian with him to gouge a whole lot more on the basis of a big lie about ‘content’.
Aye aye, Cap’n. And I’m bitterly disappointed the Guardian have joined the lie. I pay them a reasonable annual subscription like I pay my Crikey sub. I wonder how many subscribers the GA has, worth how much. Any ideas?
Interesting mention of SEO, not sure the relevance of SEO for NewsCorp et al. assuming most users go direct to legacy news websites, except maybe a particular news story has different outlets competing on organic search result ranking? For what it’s worth…..
However, what is never mentioned are the catastrophic outcomes for sole traders, small biz and SME with no public profile, hence, have invested money, time and resources into SEO for Google to be visible; can disappear overnight in a still unclear need to support the ‘top end of town’, ‘journalism’ and ‘legacy media’.
Much Australian media have shown their true colours by their inability to pick apart a very weak case for legacy ‘big media’ (vs. ‘bigtech’), which is full of holes…..
If the media companies get their windfall from big tech I seriously doubt it will go to pay for better journalism. It will be more piecework rates as journalism further devolves into a work from home cottage industry. And why invest in serious investigative journalism when fake news and propaganda is easier to manufacture?
I realized recently that this is implausible, even if Google don’t walk away, because the proposed legislation has an “else” clause. Do all of this negotiating and suffer the umpire’s decision, OR we’ll tax you 10% of revenue.
According to the figures, 10% of Google’s Australian revenue is about $430M, which is more than the $50M mentioned in the next paragraph for News Showcase deals, but surely forms a fairly hard ceiling on negotiated outcomes? Certainly nothing like those published ambit claims.
And they get to keep 90% of their revenue (give or take accommodations with the ATO more generally.)
The additional benefit of that outcome is that the government would then get to choose how much to dole out to News and Nine (or any other publishers), with the usual level of scrutiny and public debate.
LNP protecting their press arm . Not fooling anyone but it’ll be supported by the fan club.
It just wouldn’t be capitalism without someone trying to get in on someone else’s revenue stream.