Chiefs back Rupert Murdoch over Facebook paying fees

Media industry heavy-hitters have backed Rupert Murdoch’s call for Facebook to pay for news.

News Corporation executive chairman Rupert Murdoch.

WPP chief executive Sir Martin Sorrell and Nine Entertainment boss Hugh Marks have backed Rupert Murdoch’s call for Facebook to pay “trusted publishers” a fee for content.

Mr Murdoch, executive chairman of News Corporation, publisher of The Australian, has raised the idea of a new way to sustain journalism’s long-term future, much like carriage fees paid by cable companies.

The comments ignited a debate about how industry participants can solve the problem of equitable distribution.

Facebook and Google have presided over a titanic shift in ad dollars and editorial control from traditional media companies to their platforms, and without ­accepting traditional publisher responsibilities.

Asked whether Mr Murdoch’s proposal would improve the balance of the digital publisher ecosystem, Sir Martin told Media: “It’s one solution to the publishers’ dilemma and I thought that some progress had been made on the issue by European publishers, including News Corp at Turin and Google Camp last year.”

Mr Marks said the present economic model was broken and needed “urgent attention”. If Facebook was serious about supporting “trusted content” and stopping the spread of fake news on its platform, he said, the tech giant should help “find a solution pretty quickly”.

“I am fully supportive of ­Rupert’s comments,” said Mr Marks, who leads Australia’s second-placed free-to-air network and a large digital media and online video business.

“It’s positive that Facebook appears to be taking responsibility for the content on their platform but if all that trusted content is from companies like News Corp and Nine, surely there has to be a model that enables the ­people producing the content to monetise it.

“It’s an issue that needs to be addressed with urgency. It’s potentially a wonderful platform for news organisations but there has to be a discussion and a model ­developed that enables a commercial relationship that works for us and them.”

Of Mr Murdoch’s proposal for Facebook to introduce a fee-based model, Mr Marks said: “That’s one model. It would be fantastic if they would agree to it. I think there are other models as well that we can look at as an ­industry.”

As the world’s largest publisher with a market value of $US552 billion ($680bn), Facebook is expected to post revenue of $US40.3bn and adjusted net income of $US19.8bn in the current fiscal year, according to Bloomberg. The figures dwarf the amount of money traditional media companies generate from publishing.

“I don’t know what the right model is but they seem to be repositioning as a media company more and more. They’re worth more than half a trillion dollars yet they do not create any content,” Mr Marks said.

“I support the notion Facebook wants to favour trusted, credible, authentic news organisations. I think that’s absolutely to be encouraged.”

A local trade group representing Fairfax Media, News Corp Australia and Seven West Media’s West Australian Newspapers has also spoken out in support of a fee model.

Peter Miller, chief executive of NewsMediaWorks, described the initiative as a “cracking idea”, saying he was “confident there would be support among our members”.

If Mr Murdoch’s idea gains transaction, it would not be the first time he has put forward a bold new idea. In 2010, Mr Murdoch was heavily criticised for introducing paywalls around The Times of London and Sunday Times websites.

One of his biggest critics was The Guardian, which now seeks donations from online readers to help sustain the organisation’s long-term future.

Other supporters included the News Media Alliance, a trade coalition representing some 2000 organisations across the US and Canada, including The Wall Street Journal, a News Corp title. “Mr Murdoch is a champion of journalism — and a staunch advocate for the news industry. We need a digital ecosystem that provides a viable economic return to publishers, and we don’t have that today,” said David Chavern, president and chief executive of the News Media Alliance.

“A carriage fee would be one clear way to bring more economic balance to the system. Quality journalism is critical to our civil society, and Google and Facebook have a responsibility to make sure their dominant platforms help to ensure that it has a future.”

The Federation of German Newspaper Publishers (BDZV) also welcomed Mr Murdoch’s comments. “For years we have criticised the fact that elaborate content from newspapers and magazines is being used by global platform providers such as Facebook and Google without publishers benefiting financially,” a spokeswoman said. “It is gratifying that Rupert Murdoch so clearly denounced this unacceptable imbalance.”

At the World Economic Forum in Davos, Switzerland, billionaire investor George Soros referred to Facebook and Google as monopolistic menaces.

“As Facebook and Google have grown into more powerful monopolies, they have become obstacles to innovation, and they have caused a variety of problems of which we are only now beginning to become aware,” Mr Soros said.

“They claim they are merely distributing information,” he continued. “But the fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation and fair and open universal access.”

Under a recently announced initiative, Facebook will prioritise news reports in its news feed from publications that users have rated as trustworthy in its surveys.

It will also favour posts shared by friends and family over those posted by news organisations and brands.

Recently it was revealed that Russian entities spread political propaganda before Donald Trump won the US presidential election in 2016. Facebook’s role in the British government’s Brexit vote and other European elections has also come under the spotlight.