Google, Facebook are killing journalism

With 2500 journalists laid off in Australia since 2011, there are now 12 PRs for every journo, and it feels that way in my inbox.

High-profile job losses at Fairfax in recent weeks are part of a worrying trend. More than 2500 journalists have been laid off by Australia’s media companies since 2011, about a quarter of the total.

Meanwhile, the ranks of public relations, advertising and corporate affairs professionals have swollen by around 19,000 to 91,000, according to ABS statistics. That leaves about 12 PR people for every journalist in the country — and it certainly feels that way when I open my inbox each morning. These figures exclude the thousands of political advisers working for state and federal governments too.

Unless this army of spinners is entirely useless, such an onslaught must have compromised the quality of what journalists write and say, quite apart from their reduced numbers.

The free market, it seems, is destroying journalism, or at least the salaried variety employed by companies dedicated to producing it. Or is it?

In any case this is a disaster — economic, political and social — in a way the collapse of advertising would not be.

Journalists are the only effective check on government and large corporations, whose information about, and power over, citizens and customers is probably greater than at any time in history. Their incentives — to call out vested interests — are naturally aligned with the public interest more than any other job.

Journalism is suffering because the advertising revenues that sustained it have been sucked away by digital behemoths Google and Facebook, which between them are earning about 85 per cent of all new digital advertising revenue.

These platforms are attractive to users partly because a lot of quality content can be found on them — but the producers of that content get nothing. Thanks for the fame, but it doesn’t put food on the table!

Barely known a decade ago, Google and Facebook are among the five largest companies by market capitalisation in the world — together with Microsoft, Amazon and Apple. Facebook’s global revenue has grown from $272m in 2008 to more than $30bn last year. Google’s from $20bn to more than $90bn over the same period. These revenues once funded the production of content — journalism, television, etc. Now they don’t.

“The astonishing and precipitous decline in revenue paid to content creators has nothing to do with the idea that people are listening to less music, reading less or watching fewer movies and TV shows,” says American author Jonathan Taplin in his important new book, Move Fast and Break Things, predicting the bloodbath witnessed in print journalism will hit television channels in the next five years.

Google and Facebook have dramatically improved the world in many ways, improving the quality and speed of communication while slashing its cost. It’s hard to imagine life without them — and that includes journalists whose productivity has been lifted by search engines.

The outcomes of the free market are only as good as the rules government lays down. These rules, insofar as they relate to copyright, clearly aren’t doing enough to ensure the creators of content, such as journalists, are rewarded for their work. And musicians too: one million views on YouTube nets the producer some $US900, explains Taplin. Indeed, since the late 1980s the share of people employed as musicians in Australia has shrunk by 34 per cent.

Google and Facebook have been rewarded spectacularly for their success — the former’s CEO earned $US200m last year — and very likely will continue to be.

But their success is having a detrimental impact on the production of other goods and services in other industries. The automobile quite rightly replaced the horse and cart; it didn’t also somehow obliterate the medical profession. If it had, government would have had to change the rules.

Unless they welcome an emaciated media, lawmakers will need to consider how to change copyright rules to strengthen the hand of traditional media companies. Maybe the tech giants should be obliged to pay a small fee to the owners of the content their applications display?

The value of Google’s search engine and the utility of your Facebook homepage — and the desire for advertisers to pay to appear! — are enhanced the greater the range of quality content that can be found there. Currently, the vast bulk of that benefit is flowing directly to the tech giants.

Media companies, beset by traditional rivalries and worried about falling foul of competition laws, have proved incapable of negotiating as one with the online giants. They should be able to negotiate like a monopolist if they are facing one. This should be urgently encouraged.

The tech giants’ success isn’t only a worry for journalists. “Not since the turn of the 20th century, when Theodore Roosevelt took on the monopolies of John Rockefeller and JP Morgan, has this country faced such a concentration of wealth and power,” Taplin writes. Roosevelt’s successor Woodrow Wilson, of a very different political persuasion, was worried too: “If monopoly persists, monopoly will always sit at the helm of the government.” We aren’t worried enough about monopolies.

Google has about 90 per cent of online search market in Australia. The algorithm that responds to users’ queries is wholly private, yet has immense power over what people buy and think.

Around half of people use Facebook as their primary source of news. In combination with their smartphones, the level of personal, financial and locational information exceeds anything any government has ever amassed.