The digital media farce continues as nothing changes

Jun 3, 2021
digital media bargaining code

Nine Entertainment is the latest of the old media companies to announce deals with Google and Facebook. For a fraction of what they once thought they deserved, and without any of the benefits to consumers which the Digital Bargaining Code bill purported to provide.

In June last year, Nine CEO Hugh Marks declared that a deal with Google and Facebook would be worth about $600 million for old media. News Corp Australia’s chairman Michael Miller reckoned it was more like $1 billion.

In its disclosure to the ASX, Nine somewhat cryptically indicated that the deals, and “ongoing growth in subscription revenue”, would lead to an improvement in their before tax earnings for FY 2022 of between $30 and $40 million. In other words, it is likely that the combined value of the deals is less than that, and a whole lot less than originally  touted.

Divide and conquer – Google and Facebook show who’s the boss!

Back then, of course, it was all about “investing in quality journalism”, as Nine, News Corp and others made their submissions to the Australian Competition and Consumer Commission’s (ACCC) Digital Platform Enquiry which presaged the bill that was enacted on March 2 this year.

For the bill’s provisions to come into effect, the ACCC has to declare Google, Facebook, or in theory any social media company, “a platform provider”. The ACCC has yet to do that, meaning the bill itself is merely a threat. It contains no provisions that enforce or affect the quality of journalism. In short, it addresses none of the concerns raised by the original inquiry.

Michael West Media estimates that the combined value of the deals done between Goggle and Facebook and the old media companies (News, Nine and Seven West Media), plus The Guardian, Sky News, ABC, Antony Catalano’s ACM and a handful of others, is worth between $75 and $100 million annually. Small change for Google and Facebook, which will also use it to reduce their paltry amounts of tax paid in Australia.

Facebook: What’s the Scam?

In Google’s case, the payments are related to the publishing of articles in the “Google News Showcase”, not in Goggle’s search results. This is what Google always insisted on for fear it would set a global precedent and forcing them to change their business model. Google got its way, the News Showcase is just that, a side hustle that not many people visit.

According to Similarweb, a global web analytics firm, Google News Australia (of which Showcase is a part) had 565,000 visits in April, a mere 0.5% of Google’s total Australian visits of 107 million in the same month.

Where the monetised news feeds will appear on Facebook is a lot less clear, but it is equally unlikely to make a difference to Facebook users, for better or for worse.

In short, Google and Facebook got exactly what they always wanted – freedom from any meaningful regulation of their activities in Australia. And it’s costing them a pittance.

The Government will nevertheless continue to claim it as a win, although the code itself is unlikely ever to be invoked or tested in court, Instead the code will wither away as a useless piece of legislation which failed to achieve its lofty purpose.

The Government will, of course, also claim it as a win for the ABC, the only one of the recipients of the “largesse” to have said that it will use the money to strengthen regional media coverage.

A commendable stance, which has the support of Communications Minister Paul Fletcher. In an act of magnanimity he declared the money was for the ABC to keep “without reduction in their Government funding”.

And pigs will fly.

The Digital Media Bargaining Code was always a furphy primarily designed for the purpose of redirecting money from Google and Facebook to Nine Entertainment and News Corp, as well as Seven West Media. It’s done that, but not much else. Real media reform remains as elusive as ever.

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