There’s a battle underway that rivals the wild wild west in many ways as Google along with Facebook stand off at 20 paces against the Australian Government and the countries biggest media companies. The latest shot fired – Google threatening to exit Australia if it all goes through.
Most of this blew up on Friday when all the major players in the fight sat down in front of a Senate Committee who are looking into the code which is before Parliament for approval.
That hearing saw Google’s Aussie MD, Facebook representatives and the major media organisations all making statements and taking questions from elected Senators, along with the ACCC’s boss Rod Sims.
While this was two days ago, I’ve sat back and watched – and read – lots of reporting on this, and to be honest – much of it is off the mark. Particularly from ill-informed smaller publications who see this as some sort of fundamental breaking of the internet as we know it.
If you read any article about this that refers to “Murdoch” then disregard that. The bias there is clear, and that should be put to one side.
This is a “battle” between some of the biggest media companies in Australia, all of whom are fierce rivals in their day to day work, yet they sit side by side here seeking change.
What is the problem the Government seeks to address?
Media companies are getting a much, much lower share of the advertising dollar in Australia, and that’s impacting the very business model on which they operate, and could, can and has resulted in cuts to journalism in Australia. If we want to see Journalism continue, and to survive let alone thrive, we need to ensure that the eyeballs landing on content mean advertising revenue for those organisations.
The issue is that Google’s business model allows companies to spend far less per ad placement and reach large targeted audiences, and so, they are less likely to allocate that advertising dollar to a mainstream media publication.
That’s not Google’s fault per se, but it is an issue for the media companies.
While many are arguing those media companies simply need to adjust, they’re missing the realisation that adjusting will simply mean cutting, culling and funding only the content that sells and gets clicks – and that won’t be your local court reporter, police rounds reporter or investigative reporting team. It will be more a Daily Mail churn and burn without much effort approach, and while that works for them, it’s not going to be good for what is broadly labelled Public Interest Journalism.
Our Federal Senators were almost like a deer in the headlights when questioning Google. One of them simply didn’t get that Google in fact doesn’t make money when an ad is shown, only when an ad is clicked. And this defence by Google is critical. Advertisers aren’t paying to show ads around Google Search, or Google News results, they are paying when people click the ads.
What the ACCC wants is for Google to pay News Media when people click their links in search results, something Google does for zero links today other than those ad placements on the site.
Likewise, the ACCC wants Facebook to sit down with media companies and agree to pay them when links to news items are shown or clicked.
If the parties can’t agree to terms, the ACCC will arbitrate an outcome – no-one will be happy with that.
Facebook’s response is to say they will remove News from the “news feed” we all see on Facebook.
Honestly, that wouldn’t change my feed much at all.
Google’s response is to say they will exit the Aussie market altogether, walking away from $4.8Billion in revenue, or there abouts.
Are Google and Facebook right?
Here’s the problem – in part they are. I don’t get paid when my pages appear in search results, and nor would I expect to. What I’d love is for more transparency around why some things get ranked higher in the results, but that’s Google’s magic, we have to work hard for that result.
And on Facebook, I choose to share articles from EFTM on our Facebook page or my personal profile – We do that because we want people to see the news, and click the site and read it.
However, both companies dominate the eyeballs and market share in Australia. And, they are constantly twisting and changing how they operate. Right now, you don’t get much more than a headline, but who’s to say that will not change?
I struggle with the concept of Google and Facebook paying for links that appear on their sites or search.
And I don’t think anyone would notice much if Facebook implemented this change, frankly, it will just make it more about personal opinions than proper news, and that’s a bad outcome for everyone.
Google won’t leave Australia, but they could well decide to strip or deprioritise News site results in search, or simply remove the “News” tab from Search results.
Doesn’t Google have a plan for news?
Google talks about “News Showcase” a service where by News organisations partner with Google to have their news “showcased” and in that instance the payment part is covered, but this Showcase will likely be akin to Apple News and show the whole text of any article. That’s great, but it will also dramatically diminish the number of people who actually visit the news websites, which will create a problem of its own.
You see, Google seeks – knowingly or unknowingly – to be the source of all information online.
If you google many things, like flight numbers, or even celebrity names, you will get in most cases enough information just from the search results as you need – without needing to actually click on a link and visit another website.
As this grows and continues, what’s stopping Google taking slices of content from news sites and aggregating them beyond the current “headline and link” they do at Google News? Nothing.
What’s wrong with the proposed Media Code?
Imagine Google is a bus.
Now imagine News sites/pages are bus stops.
Tickets are free – so we get on the bus (we search for news), we see the list of stops, and choose one. At the same time we’re seeing advertisements for other stops that might appeal to us.
In the case where we choose to get off at an advertised stop, the Bus driver gets paid.
If we get off at our planned stop, no-one gets paid, and the News site we stopped at has the chance to either charge us to enter, or to show advertisements they are making money from.
That’s how things work today.
Under the current Media Code, the Government is suggesting Google pays the news site for either showing the list of stops on the route map, or when we get off the bus at a news stop.
It’s strange.
Google’s choice here is to stop running buses, or stop showing news sites on the route map – either that, or they negotiate with the news sites to show them on the route map.
It’s all just – strange.
How can this be resolved?
Unfortunately, the horse has bolted on most of this. The reality is that Google and Facebook are taking billions of dollars from Aussie companies (in advertising), and paying very little in tax – though what they are doing is absolutely legal, like any of us – as Kerry Packer famously said – minimising our taxes, is the right thing to do.
But should the government look at overhauling our corporate tax system to ensure that where such large advertising revenue is collected, it’s accounted for as local revenue and taxed as such?
This media code looks set to pass, with some basic amendments. After that happens, Google and Facebook can seek to agree to terms with media companies – but will it be enough to keep them happy?
If not, they will be forced into Arbitration, and as Rod Sims told the Senate Committee, this is not a negotiation, it’s a one offer from each side then arbitration by an independent – so, that is not what either party would seek.
Alternatives to Google Search in Australia
While government intervention will change things, the one thing that could really inspire change in the business models is a change in habits and the flow of traffic.
Apple News is a small drop in a big ocean, but it’s a way to do news which favours both Apple and the News organisations (revenue sharing).
Likewise, individual news apps like The Daily Telegraph, 9News or the SMH all allow for direct to consumer notifications and a great user experience, perhaps that’s the right approach for news.
And then there’s our habits for search. I’ll cover separately how you can buck the trend and move away from Google Search – show a little message to Google that perhaps they are just a bit to big for their boots.
