A contagion has threatened the very existence of mainstream commercial media for more than a decade and the COVID-19 pandemic has intensified its effect. Jobs are being shed already; 60 local and regional News Corp mastheads will suspend print editions after this week, iconic independent mastheads such as The Gawler Bunyip, Mildura’s Sunraysia Daily and Broken Hill’s Barrier Daily Truth have closed, job losses and pay cuts are hitting Seven West Media, Nine Entertainment, the Ten Network and elsewhere, and many media operations will struggle to survive the next 12 months.
The contagion has been the digital giants — especially but not limited to Google and Facebook — spreading media content more rapidly and widely than ever before but exacting a fatal parasitic price; sucking up most of the advertising revenue that used to sustain that same media.
When most of the revenue derived from providing journalistic content goes to digital giants who share it freely, rather than the firms that invest in people to produce it, a business model is broken.
The ill-effects are widespread: a substantial public good is undermined as independent media voices are reduced; local, regional and national news and views are replaced by global and public sector perspectives; Australian jobs and businesses are destroyed; less tax is paid on our shores; and a grave injustice is perpetrated when global digital giants are enriched and empowered through raw material they have taken from Australian workers without compensation.
Understanding the scale of these companies is important. Google’s parent, Alphabet, has a market capitalisation of about $US750bn ($1.27 trillion). The entire federal budget could buy less than half the company, and before the latest market turmoil its value roughly equalled our GDP. Facebook is about two-thirds the size of Google. When these giants bargain with most media firms, Orcas negotiate with minnows.
The federal government has tackled the issue with a groundbreaking ACCC report that recognises the unfair, counter-productive and anti-competitive nature of these arrangements and demands a resolution.
It also shows online has rapidly taken up more than half of all advertising revenue, forcing other forms down (print by two-thirds). That’s evolution, you might say. But the kicker is that more than half of the online revenue goes to Google and Facebook, rather than to the content producers.
The proposed fix is a code of conduct under which the digital giants would pay fair compensation for content they monetise. A deadline was set for the end of this year. That is no longer feasible. The pandemic has crushed advertising revenue again, just when more people than ever are flocking to mainstream media sites, newspapers and TV and radio stations for reliable news, information and entertainment. In real time, we are seeing how reliant we are on a vibrant media sector while it is simultaneously being plunged deeper and deeper into commercial vulnerability.
Communications Minister Paul Fletcher must demand a resolution before the end of this financial year or force the issue with regulation. This is not about regulating a market, it is about ensuring that Australian content cannot be taken at no cost.
We would not abide Cargill taking our wheat for free, or Chevron our gas. So why do we tolerate Google and Facebook sucking up our intellectual property for free?
Vast digital profits are largely built on these unfair arrangements. Media companies can have symbiotic relationships with the digital giants, relying on them for distribution. But the market power is daunting because there is no effective competition.
Some media content will be willingly offered for free, to promote other content on free-to-air television for instance. These arrangements can be detailed in commercial arrangements — it is not beyond our capabilities.
Funding models could involve copyright payments per view — much as songwriters and artists are reimbursed for use of their songs — or annual fees negotiated between parties for all designated content. It is a matter of companies and people being paid a fair price for what they produce.
Scott Morrison is spending enormous amounts of future taxpayers’ money to help the nation get through this pandemic. He needs to step into this area too, to save more jobs by forcing the digital giants to operate with fairness.
News Corp Australasia executive chairman Michael Miller has been fighting a bit of a lone public hand in recent weeks. He seems to have given up on negotiations and is calling for urgent government legislation of a mandatory code.
Other commercial organisations must join the chorus, rather than rely on News Corp’s lobbying. (I am told the ABC, counterintuitively, has been a useful advocate behind the scenes, despite its less compelling commercial imperatives.)
This is a time of unprecedented health, commercial and political challenges met by radical policy decisions. We can’t wait any longer to fix this digital dilemma. What was already a life-threatening ailment for many media organisations has now been inflamed by the pandemic, putting them in the emergency room.
Report on ABC’s ‘doctored audio’ scandal blames lawyers
A report has blamed ABC lawyers for failing to pass on complaints by former commando Heston Russell that extra gunshots had been edited into an ABC news report.
‘Pressure from above’: ABC executive pushed by Buttrose
Christopher Oliver-Taylor was under pressure to sack Antoinette Lattouf after Ita Buttrose made clear she was ‘deeply unhappy’ with action taken on the stand-in radio host, the Federal Court has heard.