The problem with the Australian News Bargaining Code
The plan to charge Google and Facebook for linking to news stories seems driven by jealousy, a failing business model, and rampant self-interest
Look, I get it. It must be terrible for the news companies at the moment: they’ve seen the internet take away the most lucrative product they had: the classified ad. Now, they’re also seeing news consumption changing dramatically: again, because of the internet. The print media, particularly, is having a torrid time.
The largest print publisher in Australia, Rupert Murdoch’s News Corp, owns the best-selling newspapers in almost every state capital city. It owns every single major newspaper in Queensland, Australia’s only national newspaper The Australian, the Foxtel satellite TV service and Sky News Australia. It has two-thirds of Australian newspaper readership. It must be hurting more than many.
So, and perhaps unsurprisingly, News Corp has used its considerable influence to successfully lobby the Australian Government to do something about the internet: particularly, Google and Facebook.
The Australian Government has produced a thing called the News Media Bargaining Code. It describes itself as “a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms, specifically Google and Facebook.”
The proposed law will force Google and Facebook to pay Australian news businesses to link to their stories or feature stories in their service.
What is Google actually doing?
Listening to a piece on the radio today, I was told in the introduction that “Google profits from using news stories”. This assertion went unchallenged; so it’s probably helpful to understand what Google actually does.
So, just so we understand what’s going on, here’s a search for “News Bargaining Code”.
First, note the lack of any advertising round this: nobody wants to advertise next to the phrase “News Bargaining Code” (and who could blame them).
At the top is a link to the ACCC, the Australian Government, then two “Top Stories” from Google News, a news aggregation service, followed by a blog from Google about this, and then another news piece from The Conversation.
The “Top Stories” from Google News are both from ZDNet, a technology news website. As Google News says in its support documents, “You can use the Publisher Center tool to share your content with Google News by submitting RSS feeds, website URLs, or videos”; and, more importantly, “If you do not want to surface in Google News, you can block access to content on your sites without affecting your continued indexing and ranking in Google Search”.
In other words: publishers can ask to be included in this section, but can also opt-out of it entirely. If they don’t want Google to link to their stuff like this, that’s perfectly possible. And, additionally, you can get off Google Search entirely (which would remove the link to The Conversation, the fifth link in this screenshot).
Rupert Murdoch himself knows he can hide his content: he threatened to remove all his titles from Google’s index in 2009. Eleven years later, he’s still not done that: because he knows that’ll hurt his businesses even more. So he’s succeeded in convincing the government to get Google to promote his content for him, and to pay for the privilege. You have to hand it to him: he’s a wily operator.
Google News is a thing, but not sure where the money is
Google does, too, operate the Google News website and service. That runs a website and also alerts delivered to mobile phones for specific subjects. The Reuters Institute Digital News Report 2020 says that this is rather larger than I thought: 6% of news consumers use it in the UK, but 17% in the US, as one example.
Above is a search for “News Bargaining Code”, and once more, I can’t see a single ad. Nor, to be honest, much information: some headlines and thumbnails, but to learn anything I need to click through to the news organisation themselves.
Perhaps the ads are being deliberately hidden for Australian users at the moment; so here is the Google News front page from a London-based UK internet connection, using an incognito window. Again, I can’t see any advertising here: nor any evidence that people would use this without clicking through to any stories.
Now, it’s certainly true that Google earns money in searches; and perhaps it might eventually earn money from knowing that you visited a news story about a new electric car. But that’s a stretch: and, in any case, Google already gets this information from other sources. It doesn’t need to carry news in order to collate information on whether I’m interested in buying a new car.
So, I find it hard to understand quite how much Google “profits” from indexing news stories, as is the repeated claim.
It is, though, undeniable that the news organisations earn revenue from their appearance in Google News.
Here’s a story I clicked on the front page of Google News; the Courier Mail (owned by Rupert Murdoch) shows me a headline and a deliberately selly first paragraph (ending “This is how they did it…”): and then prompts me to sign up as a subscriber.
Other companies benefit from showing ad banners.
Here’s The Brisbane Times’s coverage of the same story: two big advertising ad banners are on this particular story, and the Brisbane Times uses a metered pay-wall to let me see a few stories per month and then to insist I subscribe in order to see more.
And, just so we’re comparing like with like: here’s a Google search engine search that I hoped would return me news stories about that man eating wild mushrooms. There are ads on this page; but ads for wild mushrooms: as well as links to the story. Is this what proponents of this law mean by “profiting from news stories”?
The media coverage for this is lacking
The radio story I heard this morning was on a station owned by Nine Entertainment, who also own the Brisbane Times. (I’m told their coverage was more balanced later in the piece, thanks to a knowledgeable caller and some prying questions from the announcer).
But here’s the issue with the reporting of this: it’s impossible to find unbiased discussion of it, because every person doing that reporting is a journalist, working for a news organisation that stands to benefit financially if this law goes through.
Australians are simply not being given the information they need, from an unbiased source, to help make their mind up.
The Guardian’s coverage quotes a public concerned with “Google’s power”, which seems irrelevant to any discussion on paying news providers, and reassures us that the public won’t see any difference.
The ABC quotes the Government’s Treasurer:
Treasurer Josh Frydenberg is siding with the broadcasters and publishers, saying advertising revenue in areas such as print newspapers has plummeted by 75 per cent since 2005. “For every $100 of online advertising spend, $53 goes to Google, $28 goes to Facebook, and $19 goes to other participants,” Treasurer Josh Frydenberg said.
and ends up concluding that “it could also prop up ailing media businesses, brought to their financial knees by changing audience trends and the coronavirus pandemic taking a sledgehammer to already dwindling advertising revenue.”
Yes, it’s clear that the media industry is in severe difficulties. It’s clear, too, that consumers have moved online for many things, and some ad revenue has followed. It’s also clear that Google and Facebook have the majority of online revenue.
However, forcing companies to pay you money because your business model is broken seems a strange strategy: particularly where it’s difficult to understand where they are “profiting” from the work.
This appears to be driven by the politics of jealousy, and the heavy hand of Rupert Murdoch. But what’s to stop the government deciding that anyone needs to pay to link to news stories: Twitter, perhaps, or even my own newsletter? What then?
Is this in the public interest?
Murdoch’s influence is a concern to Australians. After 500,000 signatures, a Royal Commission has been set up to look into the effect his company has on Australian life. Yet, this law seeks to benefit, above everyone else, Murdoch’s business even further.
News Corp Australia is foreign-owned. Its newspapers haven’t paid a cent in tax in the last five years, though made $360m in profits, and $13.1bn in revenue. Foxtel hasn’t paid any tax since 2016 either. And if that wasn’t enough, the Australian Government has paid News Corp $40m in grants, too.
Google Australia, for the record, paid $100m in tax in 2019. It’s not much. But it’s rather more than the Australian public are getting from News Corp. So: why are we helping them again?
I don’t have “hatred” for NewsCorp: but it’s quite telling that Peter dismisses my alternative view as driven by hatred, and thus irrational.
Chapter 3 highlights that Google/Facebook have been very good at selling online ads. With hundreds of local newspapers, NewsCorp has the highest resourced local ad sales team in this country, but has failed to gain significant market share online. Unclear why Google/Facebook should be punished for NewsCorp’s failure.
It should be noted, too, that the Courier-Mail uses Google’s ad-tech to display its ads, even though plenty of other alternatives exist. Indeed, both ads on its front page (for me) have not just been served by Google’s ad-tech, but sold by Google.
And the Brisbane Times also uses Google’s DoubleClick to schedule and display ads. However, at least Nine Entertainment doesn’t use Google to sell for them. I count seven ad placements on its front page: six are inhouse ads for Nine properties (aka unsold).
So, if the major news providers behind this ill-advised law are using Google’s ad technology, and in some cases even letting Google sell ads for them, why are they complaining to government that Google has the lion’s share of online ad sales? Who’s fault might that be?
Benedict Evans, a respected technology commentator, adds in his excellent weekly email:
I like his point that these links are “worth more to the newspaper than the platforms”.