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The cost of news

Silicon Valley should not get free pass to news content. Outsourcing media’s business model to government is fraught.

By: Editorial |
Updated: February 22, 2021 7:43:38 am
digital platforms, News Media, News content, Australia battle, Google, Facebook, Indian express newsThe Australian code calls for a framework for news corporations and digital platforms to negotiate the “financial remuneration for the use of, and reproduction of, news content”.

The growing battle between Big Tech and the state has taken a turn, with Google announcing last week that it had struck deals with several Australian news organisations to pay for news content. The tech giant’s move comes after the Australian government introduced a bill — given the broad political support for it, it is likely to pass by the end of this week — that seeks to “address a bargaining power imbalance” between digital platforms and news businesses. The News Media and Digital Platforms Mandatory Bargaining Code is the outcome of a concerted pushback by governments worldwide which are waking up to the troubling realisation of the mounting power wielded by a few campuses in California. Facebook’s retaliatory strike, of blocking all news content for its Australian users, effectively underlining the brute power it wields, lends legitimacy to this backlash and the flurry of regulatory interventions. Now the state, by asserting its power, aims to reset the relationship between big tech and media, and claw back the space ceded to the former. This battle will spread beyond Australia — the governance of global public spheres is unlikely to be left in the hands of a few private entities.

The Australian code calls for a framework for news corporations and digital platforms to negotiate the “financial remuneration for the use of, and reproduction of, news content”. When parties do not arrive at an agreement, it mandates an arbitral panel to “select between two final offers made by the bargaining parties”. The unique position of digital platforms, which have opposed various provisions in the bill, places them at the epicentre of the global information system, and anoints them as gatekeepers between audiences and markets. Considering that most traffic to news websites flows through these platforms, it gives them greater bargaining power. As more users get on board these platforms, the more data they are able to gather, strengthening their ability to offer targeted advertising opportunities. The flow of ad revenue to these digital platforms, and away from traditional media, is indicative of the imbalance. For every $100 spent on online advertising in Australia, Google garners $53, while Facebook takes $28.

At the same time, however, a business model which depends on the government being the arbiter of economic security of the media is also fraught with challenges. The underlying principle of the Australian Code is to address the anomaly in digital revenues that has adversely hit news organisations. The hope is that fresh revenue streams pouring in from Silicon Valley will renew every rivulet of good journalism. That’s also the nub of the challenge. More so, in democracies and markets that have flimsy firewalls — political and legal — securing free speech; where much of the media is a megaphone for those in power and where pulling the plug on the internet is only an executive order away. Digital companies can’t get a free pass to their billions riding on news content they did not create. The government will be the primary agency to regulate but news organisations, too, need to carefully navigate the path ahead. From Gutenberg to Google, the challenge for the media has been how to be independent, both editorially and economically. That endures.

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