At OneZero Owen Williams writes about the Australian government’s proposed legislation that will make online giants pay local media.
…the News Media and Digital Platforms Mandatory Bargaining Code, would require social media platforms to negotiate with local media in order to use their content. For instance, whenever Google publishes headlines and summaries on Google News, Google would have to pay a small sum to the newspapers or magazines listed.
European governments have attempted similar laws and rules with little success.
There’s a huge disconnect with the plan. Yes, the likes of Google and Facebook have devastated traditional media. They, and other world scale media giants, have sucked almost all the advertising revenue that once paid for a vibrant and diverse market of newspapers, radio stations and television channels.
And yet today’s media companies depend on the same tech companies to drive online readers to their sites allowing them to pick up the few remaining revenue crumbs. Without that traffic they’d wither and die.
The analogy that comes to mind is that the media companies have a prescription drug dependency. The medicine reduces their pain and allows them to function, but in the long term it is killing them.
Australia’s proposed legislation isn’t only doomed to failure. It will almost certainly end up doing more harm than good. The likes of Google and Facebook need to be dragged into line, but this is not the way to do it.
What would I do? First, I’d flatten the playing field by making sure all revenue sucked out of the local market is subject to tax. If local media companies pay tax, but their more successful rivals do not, they don’t stand a chance of competing. While that train has already left the station, taxing the giants on an equal footing with local publishers might create local opportunities that would not otherwise exist.
Second, I legislate so that the likes of Google and Facebook have the same responsibilities for their content that more traditional publishers have. It’s not good enough for them to wash their hands of damaging and harmful material published on their sites. It’s not as if they don’t have the rivers of gold pouring into their coffers to help them pay for teams of editors.
In the meantime, I’m also concerned the Australian moves could have implications for New Zealand. Like it or not, the tech giants tend to treat us and Australia as a single, unimportant market.