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Digital bargaining code needs to protect Australia's media diversity

Opinion

Media diversity is the missing link in the Federal Government’s mandatory code designed to extract money from Facebook and Google to support journalism, writes Eric Beecher.

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As a ferocious advocate – and practitioner – of independent Australian quality journalism, I believe passionately in the crucial importance of diversely owned public interest media, as a counterbalance to the political and societal influence of the two commercial news publishers that dominate our democracy – News Corporation and Nine Entertainment.

Having worked as an editor at those two companies – where I was a participant in this country’s media power elite – I chose to leave that comfortable, and influential, world and embark on the precarious life of a media owner.

It’s one thing, I discovered, to talk about the importance of independent journalism in a country where concentration of media ownership is ubiquitous. It is quite another experience to compete against financially and politically powerful antagonists – one in particular.

Ten days ago, I watched as the representatives of three very large, multi-billion-dollar media organisations, sat before the Senate committee examining the Government’s News Media and Digital Platforms Mandatory Bargaining Code, insisting that this legislation is essential to their survival.

Two of those companies, News Corporation and The Guardian, are foreign-controlled, with deep pockets. The other is an entertainment business whose serious journalism is a small and almost financially irrelevant part of its overall media portfolio.

I have watched and listened to those companies tell the government,  the opposition, the Senate committee and the public that Google and Facebook have destroyed their business models by stealing both their content and their advertising revenue and therefore, that they need legislation to force those two global behemoths to compensate them – to the tune of $1 billion a year, in the estimation of the executive chairman of News Corp Australia.

The truth is that there is no content stealing. There is no breach of copyright.

Those media companies actively provide snippets or their full journalism to the platforms for one blindingly obvious reason: they gain huge benefit from the exposure – and clicks – their content attracts on Google and Facebook.

If they didn’t, they wouldn’t allow it to be “stolen”.

The other truth is that the advertising wasn’t stolen, either. The ad revenue that used to support Australian journalism – pre- Google and Facebook – came primarily from newspaper classifieds … and has actually ended up in the pockets of realesate.com (owned by News Corp), Domain (owned by Nine) and other classified advertising websites like Seek and Carsales.

As has been meticulously researched, the vast bulk of Google and Facebook’s advertising revenue has not come from news publishers.

Having said that, I’m not here to defend Google and Facebook. They are almost certainly too powerful … their market dominance and the information they collect about their users’ online behavior is scary – and there should be laws to make sure they pay full Australian corporate tax on all their Australian profits, that stem from all their Australian revenue.

For those reasons — not because of spurious arguments about stealing content and advertising revenue — I believe they should pay what is, in effect, a social license to support the public interest journalism that has been severely affected by the invention of the commercial internet, which Google and Facebook dominate.

They should pay for the collateral damage inflicted on quality journalism – and that’s exactly what Google and Facebook are prepared to do and, in many countries, are doing.

But to make that work – and to ensure the News Media and Digital Platforms Mandatory Bargaining Code delivers a serious practical outcome for news publishers, like ours – I believe this legislation should be nuanced, not overhauled or re-written, to address two crucial aspects.

It should explicitly protect and enhance diversity of media ownership. The legislation should create meaningful financial support for Australia’s 100 or so small-to-medium regional and urban news publishers – so that the vast proportion of funding does not end up in the pockets of News and Nine.

Therefore, I think there should be a specific mechanism or formula in the legislation to guarantee that smaller news publishers — like the members of Country Press Australia and those like Private Media, Solstice Media and Schwartz Media, as well as potential new entrants — will share fairly and transparently in the funding from the platforms. A mechanism to protect media diversity.

Secondly, it should address Google and Facebook’s seminal concerns to ensure they participate in the code. It has become clear that the platforms have one or two “red line” issues that, they are warning, could force them from participating in the code.

In Google’s case that relates to the way they provide funding to news publishers. If it is by paying publishers to display snippets, that creates a global precedent for Google that could, if replicated in other countries, unwind their entire search business model. But if they pay publishers through other means, such as licensing content for products like their News Showcase, they have made it clear they will proceed to support the Australian news industry. Because this is a “payment mechanism” issue it should be nuanced to ensure Google participates.

In Facebook’s case, the primary concern (which also applies to Google) is the absence of any kind of parameters, or guidance, or definition of value, to place a limit or cap on their financial liability if they participate in the code. And this uncertainty is enhanced by the final-offer arbitration system. Some kind of liability guidance would remove that objection.

On both these issues, I would argue that minor adjustments to the bill would in no way distort or compromise its intentions, and would give far greater certainty that the platforms will participate and therefore that Australian news publishers – large, medium and small – are given this once-in-a- lifetime financial support to play their role in our democracy.

Eric Beecher is chair of Solstice Media, publisher of InDaily, and Private Media, publisher of Crikey.

This article is an edited version of comments he presented to the Senate’s Economics Legislation Committee yesterday.

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