ANALYSIS: The internet has killed the radio star. And the TV star. And the newspaper star.
That much is evident in the balance sheet of most of this country’s legacy media organisations, not the least of which is Seven West Media and its hollowed-out West Australian Newspapers division and the Nine conglomerate with its struggling radio assets.
But does any of that justify government intervention in the sector?
Isn’t that just the lifecycle of a business; make money only until a competitor comes along with a better product and puts you out of business… or adapt?
Instead, the Albanese Government has decided to force the US tech giants who have wreaked such havoc on Australian media companies to pay those media companies. I suppose they look at it in the same way as the WA Government did when it forced uber and other operators to pay for the losses of the greedy taxi industry that they had replaced.
But why should a business be punished for out-competing another business?
Under the Albanese Government’s plan, Meta, Google and Tiktok, among others, will have to pay a fee to government, called the “news bargaining incentive”, unless they strike deals to pay the publishers that they have out-competed. The size of the fees have not yet been announced, but the government has indicated it will be in the millions of dollars.
The fee to government will be set at a level higher than the digital giants would expect to pay to publishers. As a result, it’s expected that Meta, Google and Tiktok will strike deals with the publishers instead. The government doesn’t expect to receive any revenue.
This was the government’s way of forcing the digital giants to prop up failing media organisations, based largely on the fact that the likes of Meta, Google and Tiktok make money from ads that sit next to the content produced by legacy media. Effectively, they are using the publishers’ own content to cut their lunch.
But here’s the rub: Meta (Facebook) was of the clear understanding that it would be charged in some way because of the legacy media content that appeared on its platform. Therefore, it was prepared to block all the content owned by the failing publishers from appearing on its platform.
It had already made the point that it wasn’t Meta that put that content on the Facebook platform; in fact, it was Facebook users who shared the content. Some of those users were actually the publishers themselves, who used Facebook to promote their content to prospective subscribers.
I would have thought Meta’s was a resonable solution. If the argument is that the tech giants are “stealing” content and then selling advertisements next to that content, then Meta was prepared to physically block that content from appearing on its platform. Users would then have to go to the legacy media sites to see that content, and presumably the advertisers would then want to pay legacy media for those eyeballs. It could no longer be argued that Meta was stealing content.
But the Albanese Government is having none of that.
Under today’s announcements, the tech giants will have to pay even if no content from the legacy media organisations appears on their platforms.
So, they are not paying for stolen content. What they are being charged is a fee for causing the demise of legacy media organisations… by out-competing them.
On that basis, I would be pretty annoyed if I owned a Blockbuster franchise that had gone under because of the rise of streaming media and hadn’t seen a cent from Netflix. Where was the federal government then?
Then again, Blockbuster franchisees didn’t own television stations and newspapers that could pressure governments into bailing them out.
- The reporter works on a casual basis for Nine’s Perth radio station, 6PR
