Kerry Stokes demands action to make tech giants pay for news content

Kerry Stokes has urged “political parties from all sides” to pass legislation to make technology heavyweights Google and Facebook pay for news content.

Seven West Media chairman Kerry Stokes, left, and CEO James Warburton. Picture: Nikki Short

Billionaire Kerry Stokes has urged politicians from all sides to pass legislation to make technology giants such as Google and Facebook pay for news content on their platforms, which is used to boost their own advertising revenue.

Seven West Media’s chairman and biggest shareholder told shareholders that the television and newspaper group had been working with the media industry and the Morrison government to get its “fair share of advertising dollars, hundreds of millions of which continue to be siphoned off to the foreign digital players”.

“These foreign-owned online platforms pay little tax in Australia and operate on an entirely different playing field without being constrained by the myriad requirements placed on local media players,” he told shareholders at its first virtual annual general meeting on Thursday.

Mr Stokes said the nation’s competition regulator had carried out “very effective work” to bring digital platforms “to account for the damage they are causing to jobs, the integrity of news gathering and the established, law-abiding businesses in Australia”.

“We urge political parties from all sides to implement changes in legislation recommended by the ACCC.”

Nearly two years after the Australian Competition & Consumer Commission delivered its landmark digital platforms preliminary report, its draft news media bargaining code is expected to be introduced to parliament next month. If legislated, the code would allow media companies to negotiate with the US-based tech heavyweights over payment for news content on their platforms.

Facebook and Google, which collectively generated about $5bn in local revenue last year, are desperate to stop the Morrison government introducing the code, amid rising expectations it would lead to similar legislation around the world.

Mr Stokes’ comments came as Seven West flagged that its TV advertising revenue could be down about 5 per cent for the six months to December, citing a “short and volatile” ad market during the coronavirus crisis.

Chief executive James Warburton said the metropolitan free-to-air TV market was down 5 per cent from July to October from the same period last year.

However, cost savings so far in the current financial year, excluding the federal government’s JobKeeper payment scheme, “have more than offset this revenue decline”, Mr Warburton said.

Mr Warburton also signalled that cricket would feature on its TV network, despite criticising Cricket Australia over its summer plans during the health crisis.

“Our ongoing process with Cricket Australia is much talked about. To be 100 per cent clear, we love the cricket and we have a huge amount of respect for the athletes,” he said.

“Ultimately, we pay for media rights to deliver quality content and strong audience numbers. We paid for and expect a first-class product and we will hold Cricket Australia accountable to provide it, even if it means at times we’re outspoken.”

Seven and its broadcast rights partner Fox Sports have taken aim at Cricket Australia for refusing to consider a discount or “rebate” on the remainder of their $1.18bn rights deal, which runs through to 2024. Both networks have negotiated revamped deals with the AFL, NRL, rugby union and soccer since the pandemic struck in March.

Mr Warburton said its newspaper operations in Western Australia had got off to a “positive start” with cost savings

Seven shares closed flat at 21c on Thursday.