Natalie Mortimer
Nov 26, 2019

Helping or hindering? Facebook, Google and the Australian news industry

As the tech behemoths continue to pour millions into grants and initiatives to support the news media, is it really enough to create a business model that sustains ongoing investment in quality journalism?

(Shutterstock)
(Shutterstock)

Since the Australian Competition and Consumer Commission (ACCC) released its damning report on Google and Facebook’s dominance as digital platforms in July, the focus on the relationship between tech companies and the news media industry has never been sharper.

Of the 23 recommendations listed in the Digital Platforms Report, there was really only one that raised the hackles on the backs of Facebook and Google—an enforceable bargaining code to ‘ensure that media businesses are treated fairly, reasonably and transparently by the large digital platforms’.

The recommendation followed the finding of a ‘significant imbalance in the bargaining power that is strongly in favour of the duopoly when it comes to monetisation of content and value sharing’.

A Statista estimate expects the total newspaper advertising market in Australia to shrink to around AU$1.37 billion by 2022. In contrast, Facebook’s advertising revenue grew to US$17.4 billion in the three months to 30 September, up 28% year-on-year, while Google’s advertising revenues surged to US$33 billion in the same period.

Facebook took particular issue with the recommendation of a code of conduct, saying: “It is hard to imagine that such influential companies require the assistance of the Australian government to negotiate commercial terms with Facebook, especially in light of the lack of evidence or findings of unfair trading on our part. The analysis does not reflect our experience and is not supported by evidence of our daily commercial interactions, feedback or engagement with Australian publishers.”

Meanwhile, Google Australia’s managing director, Melanie Silva, wrote in a blog post that the proposal for such a code “overlooks existing commercial arrangements between Google and Australian news publishers and the broader value that Google provides through referred web traffic and technology”.

Both Google and Facebook insist they are working to support publishers and journalists alike.

“Our role in journalism is inextricably linked to our role in the business of news,” Kate Beddoe head of news, web and publishing product partnerships, Google APAC tells Campaign.

“It’s about making sure that as we see changes in the structure and the business of news, that journalism can find a sustainable path forward...When it comes to the point of commercial arrangements, we feel very strongly that there is a very strong value exchange right now between Google and news organisations because we don't keep the traffic, we send it on.

“Our goal is to make sure that we are getting people to trusted destinations for quality content. And when the audience is there, news organisations have the opportunity to monetise through whatever means best suited to their business and their value proposition to audiences and advertisers.”

In November last year, Google brought its Google News Initiative (GNI) to the APAC region, promising grants of up to $300,000 for publishers developing new and innovative business models and revenue streams. According to Google, the GNI program is designed to “help quality journalism thrive in the digital age”.

Google News Initiative includes fact-checking programs

The tech company has also been working with The Walkley Foundation—a not-for-profit offering grants to support public interest journalism—since 2013, and this year announced it will partner with the organisation to develop a training network across Australia to "support a sustainable future for journalists and make sure that journalists and media organisations have the digital skills to succeed at their craft".

In September, Google changed its search rater guidelines and algorithms to better surface original reporting to allow it to obtain a higher ranking on its search pages and maintain that ranking for a longer time.

In similar efforts, Facebook this year said that it will invest US$300 million to support journalism, with a focus on boosting local news, with Australia receiving a portion of that. The social platform has also partnered with the newly established Alliance for Journalists’ Freedom, to help promote media freedom and the safety of journalists in APAC.

Like Google, Facebook has also inked a partnership with The Walkley Foundation, pledging A$5 million to support the country’s news industry. The initiative will see Facebook’s Journalism Project News Accelerator, piloted in the US last year, come to Australia. The programme provides training and funding for news organisation to grow and monetise their audiences on Facebook. Moreover, reports suggest Facebook will be extending its News Tab initiative—which sees the platform directly paying approved news publishers for content—beyond the US to markets like Australia.  

While its clear there’s no lack of initiatives and funding being offered to the journalism industry, is it enough to counter the fact that Google and Facebook are siphoning off much-needed advertising revenue from publishers?

The Facebook Journalism project includes its News Accelerator program for publishers

“We have a complex relationship with Google, Facebook, Apple and other platforms,” says Chris Janz, Nine managing director of publishing. “In some instances, we're able to partner for mutual benefit and its positive to see these experiments, but they are yet to produce a business model that sustains ongoing investment in quality journalism. We also need more transparency so we can better understand the value of these experiments.

“On the whole, we are yet to enter into a sustainable relationship that appropriately values the very significant contribution our quality journalism makes to their businesses.”

Janz is also welcoming of the ACCC’s recommendation of a commercial negotiation code of conduct.

“We fully support the ACCC's recommendation. Our audiences expect us to be on these platforms and the platforms benefit from our journalism, yet there isn't any commercial model that fairly values the contribution we make to their businesses.

“The platforms set the rules and are growing their share of digital advertising revenue, meaning they have unfair negotiating power, there is less money to fund quality journalism and no clear pathway to sustain the current news ecosystem.”

The imbalance in the current regulatory treatment of content delivered via traditional broadcasting, compared to content delivered via digital platforms, is another bugbear for the news media industry, which operates in a strict legal and regulatory environment.

“The most shocking example of the regulatory disparity was that despite Facebook being the primary platform being used to record and disseminate the awful material from the Christchurch shooting in March, at the time the only investigation that could be undertaken into how Australians were exposed to this material was into how Australian broadcasters reported on the event,” says Bridget Fair, chief executive officer at Free TV Australia.

“More broadly, reform of Australia’s media regulations is long overdue, particularly in areas such as Australian content quotas and advertising restrictions that place commercial Free TV broadcasters at a significant commercial disadvantage to the digital platforms that face little to no regulation.”

When it comes to Facebook and Google’s various initiatives in the news media, Fair says that while they are welcome they do not address the long-term sustainable monetisation of premium Australian content on the platforms.

“As such, we see these recent announcements as a welcome accompaniment—but not a replacement—for the need for a new commercial relationship between media companies and the platforms.”

How tech companies, publishers and journalists work together in Australia moving forward will hinge on the government’s response to the ACCC’s report, which is expected to be released in December this year.

“Regulators around the world are looking at how Australia will respond to the ACCC's recommendations,” says Janz. “There is a real chance that it will set the tone for what happens in our wider Asia-Pacific region.

Fair agrees, concluding: “The Morrison government has a real opportunity to lead from the front and put in place some meaningful reforms to ensure that Australians can continue to access high quality Australian content, including news content. It’s a lead we would expect to be followed in many countries."

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