In December the New Zealand government said it will follow Australia and Canada introducing a law making tech giants pay local publishers for using their news.
If the local legislation works like Australia’s, that means publishers could, collectively, earn up to $50 million a year from Google and Meta.
The legislation aims to strong-arm the tech giants to negotiate voluntary commercial deals with individual NZ publishers. If deals can’t be struck, the law will step in.
That’s important: negotiations between a local publisher and a tech giant are asymmetric. By threatening to act as a referee, the government can level the field.
Upbeat response from publishers
New Zealand’s publishers are, understandably, upbeat about the idea.
The local news industry has been devastated by the arrival of the internet. In the past publishers would earn decent revenues from the advertising surrounding news and newspaper feature stories.
That’s all gone, with Google and Meta, Facebook’s parent company, sucking up a huge proportion of the worldwide and local advertising revenue.
The two companies don’t invest in news production. They don’t hire journalists, editors and other news workers. They do reap the rewards where those who make news no longer do.
Less of everything
As a result, there is much less news. There are fewer journalists. In the Stuff story linked to at the top of this post, broadcasting minister Willie Jackson says New Zealand has lost half of its journalists in the last decade.
Entire areas of coverage no longer get the attention they deserve.
I’ve skin in this game. For over 30 years I earned my living from writing, editing and publishing news and features. I worked in newspapers, magazines, radio and TV. While I continue to make income from news, it’s no longer the bulk of my income. I’m lucky, many other journalists now work outside the industry.
The idea that Google and Facebook or Meta need to make a greater contribution to New Zealand makes sense. The pair extract more than enough money from our economy each year without giving much back.
You could view that as parasitic.
Our revenue system means that the two pay a tiny fraction of the profit they make here in taxes. Local media companies are subject to tax if they make a profit.
Yet making the tech giants pay publishers for links, which is what the legislation boils down to, may not be the best approach.
It is controversial. When asked about Australia’s legislation, Tim Berners-Lee, who invented the World Wide Web, said this approach could break the internet.
He said the legislation “risks breaching a fundamental principle of the web by requiring payment for linking between certain content online”.
Australia has been doing this for a couple of years now and the sky hasn’t fallen. The Australian Treasury regards the project as a success.
An advantage of getting tech giants and publishers to negotiate deals is that it pushes the government into the background. It neutralises arguments from conspiracy theorists and legitimate critics that a news publisher is on the government pay-roll.
It might be possible to establish something similar to the Telecommunications Development Levy which funnels money from profitable telcos to worthwhile non-commercial projects. However, that looks closer to giving publishers government money than many would be comfortable with and it would be seen as a subsidy, the planned approach involves commercial negotiations.
One problem with the governments’ preferred approach is that it pins all their hopes for rescuing the news industry on two tech giants that happen to be making a lot of money from advertising at the moment.
In recent months their advertising revenue has fallen dramatically. Facebook has changed its algorithms to serve up less news content. It could yet decide to walk away from using any news content, which would leave publishers dependent on one company: Google.
Microsoft, which sells advertising through its Bing search engine and LinkedIn, went out of its way to support Australia’s law.
News is important. Done well it is good for the public, good for society and good for our democracy. It doesn’t come free, there has to be a way for the organisations who profit the most from it to pay publishers for their work. New Zealand’s proposed legislation may not be the best way of making that happen, but, for now, it’s the best idea anyone has.