News chief hails media code of conduct

Australia’s proposed code of conduct between the tech giants and media companies is an ‘inflection point’, says Robert Thomson.

News Corp CEO Robert Thomson. Picture: Jonathan Ng

Australia’s proposed mandatory code of conduct between Silicon Valley technology giants and media companies is an “inflection point” for the internet, according to News Corp chief executive Robert Thomson.

Speaking at an analysts and ­investors briefing, Mr Thomson said News Corp was already “deep in discussion” with several tech companies since the release of the draft code — which he said had changed the “terms of trade with the digital platforms”.

The draft code was coming at a time when global regulators were demonstrating an “increase in content consciousness” towards the behaviour of the tech ­giants, he said.

“The draft mandatory code of conduct … is a real internet inflection point. Essentially, we are talking about carriage fees or retrans­mission payments for premium journalism.”

The Australian Competition & Consumer Commission-brokered code could slaps tech giants such as Facebook and Google with hundreds of millions of dollars in fines if they refuse to pay for news content used on their platforms.

Under the mandatory code of conduct, Google and Facebook must negotiate agreements with commercial media companies to pay for news and share data-­collection methods. The Morrison government plans to legislate the code by the end of the year.

The code comes amid a pushback on tech companies, including last month’s congressional hearing in Washington when companies including Facebook, Google and Amazon were accused of using their platforms to abuse their dominant market positions.

Mr Thomson said there were “more deals to come” in terms of agreement for the use of content.

“Now, some of those deals will be outside Australia — but I suspect, in some ways, influenced by Australian regulatory thinking.

“I can assure you that not only regulators but media companies around the world and the digital platforms are watching Australia closely,” he told investors.

News Corp has been leading the push to force internet players to pay for journalism content for more than a decade.

“The News Corp board has supported the quest because it was absolutely crucial to the future of journalism,” Mr Thomson said.

“Newspapers delivered in whatever format are vital to a well-informed society. What’s obvious is that the collective understanding of issues is past the point of no return. There are obviously regulatory changes to come in Australia and the commercial landscape is not yet fully formed, but it will be a landscape far more hospitable to journalism, and to news media and to News Corp.”

Mr Thomson’s comments followed News Corp on Friday posting a 19 per cent fall in full-year pre-tax earnings to $US1.01bn ($1.41bn), after advertising revenue was hit by the COVID-19 pandemic around the world. Much of the impact was felt during the June quarter, when earnings fell 28 per cent to $US195m.

However, investors seized on a move by News Corp to split out the earnings from its Dow Jones business, which includes The Wall Street Journal. Dow’s pre-tax earnings were up 13 per cent to $US236m on full-year revenue of $US1.59bn.

Digital subscribers at the media group’s Australian mastheads jumped to 647,600 at the end of June, compared to 517,300 in the prior year.

Meanwhile, Mr Thomson said The Wall Street Journal planned to continue to use Apple News ­distribution, despite a decision by cross-town rival The New York Times to drop the service.

Apple News brings in “a significantly new audience that we would hope to graduate to a paid WSJ subscription over time”, Mr Thomson told investors.

“(Apple News) is a genuinely different audience. It’s actually, of late, more women than men … it’s a younger demographic. And it is a source of potential subscribers.”