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Mandatory code being developed by ACCC will create ‘level playing field’ in media landscape, Josh Frydenberg says

Source: Facebook and Google to be forced to share advertising revenue with Australian media companies | Australian media | The Guardian

From the original story:

Facebook and Google will be forced to share advertising revenue with Australian media companies after the treasurer, Josh Frydenberg, instructed the competition watchdog to develop a mandatory code of conduct for the digital giants amid a steep decline in advertising brought on by the coronavirus pandemic.

This is the same steep advertising decline that has New Zealand media companies in a tail spin. Things have been tough for nearly 20 years. Depending on which set of numbers you read, Facebook and Google take as much as 85 percent of the advertising revenue that media companies once made.

Media extinction event

Elsewhere pundits have described the Covid-19 pandemic as the extinction trigger for traditional media. The comparison is with the meteor that wiped out most dinosaurs.

Frydenberg said it was only fair that media companies that created the content got paid for it.

“This will help to create a level playing field,” he said.

The communications minister, Paul Fletcher, said the decision was about a strong and sustainable news media ecosystem.

If we are realistic, it is too late to talk about a “strong and sustainable news media ecosystem”. Today’s game is all about survival.

Level playing field

Likewise “level playing field” is a nice idea, but we’re talking about a playing field where one side has 85 percent and the other has 15 percent.

Yet Frydenberg is correct when he says it is only fair that the media companies that create content should be paid for their work. The same goes for small publishers and individual journalists.

It’s correct to say Google doesn’t take much material from media companies. Often it isn’t much more than a headline and an opening paragraph. Although that is where most of the gold sits in a news story.

Google gives something back in the way of a link to the original story. Yet often, once a Google reader has seen the head and the opening par, the incentive to click a link has gone.

It’s more complicated with Facebook. Sometimes people cut and paste entire stories into Facebook posts. That means when someone reads the story in that timeline, Facebook gets to sell the advertisement, not the publisher.  It means Facebook gets rich on someone else’s work. But then that is the Facebook business model.

Dependency

The flip side of this argument is that media outlets are dependent on Facebook and Google to deliver those links to help readers find stories. It’s a form of dependency that means relying on the parasite that is eating you to also continue feeding you.

Australia’s approach may not be the best way of tackling the problem. Yet it is good to recognise that there is a problem and to attempt to tackle it.

If recent history is any guide, the big social media firms will resist. They will spend a fortune on legal and lobbying attempts to overturn the decision. By the time that fight draws to a conclusion there will a quite different media landscape.

13 thoughts on “Facebook, Google to share advertising revenue with Australian media companies

  1. I’d argue that Facebook, Google, Twitter and LinkedIn, along with a couple of Chinese and Russian businesses doing much the same are actually media companies. And media companies earn by selling either ads or subscriptions. Is that what you mean?

  2. It means Facebook gets rich on someone else’s work. But then that is the Facebook business model.

    That is capitalism – some people getting rich from everyone else’s work. Its what makes shareholders the biggest bludgers in the world. See Why we can’t afford the rich:

    The early sections of the book set out Sayer’s most interesting arguments: namely, that the wealth of the rich is unearned, and thus amounts to the extraction of value created by others or else simply speculation.

    The flip side of this argument is that media outlets are dependent on Facebook and Google to deliver those links to help readers find stories. It’s a form of dependency that means relying on the parasite that is eating you to also continue feeding you.

    Isn’t that what retailers have been doing since forever? Acting as the middleman to deliver customers to the producers while taking a greater profit from the sale of those goods.

    Yet it is good to recognise that there is a problem and to attempt to tackle it.

    Identifying that there is a problem is the first step in finding out what the problem is. The next issue comes when the problem is identified in that many will simply refuse to believe it because it won’t conform to their world-view and will challenge their profits. Same as what’s happened with anthropogenic climate change.

Want to have your say on this? Over to you:

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