Tech giants must pay for news

THE media landscape has changed for the worse, especially for newspaper companies. The last decade has been a challenging one. Media companies are losing revenues. Many of these companies have folded, the rest are struggling to keep afloat.

The Internet has changed the way we do business. It is a double-edged sword for media owners and practitioners. While it benefited the media industry too in many ways, at the same time it has disrupted the critical source of revenue – the advertisement.

The migration of ad spend to other platforms is inevitable. We are all fully aware of the rise of the digital duopoly that is hurting the business of news. Advertisers are moving their money to digital platforms mainly Facebook (now renamed Meta Platforms) and Google. The duopoly now controls 80 per cent of digital ad revenue. In 2020, the revenue generated by Meta Platforms amounted to approximately US$116.6bil (RM536bil) and Google registered an annual revenue of US$279.8bil (RM1.2 trillion). Most of its earnings are being powered by advertising through their sites and networks.

One needs to only go to any of the platforms belonging to these behemoths and you will realise how they monetise every possible space available. What has that got to do with traditional media outfits? The whole idea of the media space is sharing. Sharing is caring, they say. But in the media realm, sharing is not profiting all. Major tech companies are not sharing revenues from advertisements of news that they carry on their feeds.

Tech giants must pay for news. Period.

Australia has paved the way. It has been a protracted fight with Google starting in 2020. The Australian government, with its hearts listening to the long suffering local media companies, initiated a law that will force tech giants to pay for the news they carry.

Understandably the retaliation is swift. Google threatened Australians that they will lose access to its entire search engine. Imagine there is no Google on your smart gadgets! Facebook too lobbied hard against the idea arguing that news makes up a tiny portion of the content in their feeds.

The tech giants have played hard ball all along. Spain had its fair share of problems with Google in 2014. Germany’s major news company saw its traffic plunge when it insisted Google pay for the content it carried.

Australia’s position is clear, it will not back down.

For Australia, the News Media and Digital Platforms Mandatory Bargaining Code is critical for the survival of its local media industry. It is more an issue about market fairness, in this case about sharing revenue between digital platforms and news outlets. It is supposed to compensate the news industry “for helping” Google and Facebook attract eyeballs. Call it a “link-tax” or whatever. It should be a win-win solution for all.

But it is a tough fight for Australia. Many Australians cared little about the fate of the well-being of local news organisations. They want their Google and Facebook more than anything else. Unless you are living in China, it is unthinkable you can do without Google. Meta’s apps have been an integral part of modern life. That is where the government must play a role. I applaud Australia’s communications minister Paul Fletcher for his unwavering pursuit to ensure justice.

The good news is that Canada has taken the same route. It has passed the Online News Act that lays out rules requiring Meta and Google to negotiate commercial deals and pay news companies for their content.

The law passed in Canada is more far-ranging than Australia's Code. As usual, the reaction from the media tech giants is negative. They insisted that it is a “fundamentally flawed legislation” and “unworkable”.

What entails the Canadian law? For one, a flexible regulatory framework that will “facilitate fair business relationships" between digital platforms and news companies.” But more importantly it is about ensuring the sustainability of the Canadian news ecosystem. More details, however, will be ironed out. It will take effect in less than half a year.

It takes Australia and Canada to make the difference. The truth is, in order to survive, the media companies need help from sympathetic governments.

If governments can’t stand up against tech giants, who will?

We need such a law considering our news organisations are under tremendous pressure. The last 10 years have seen at least 10,000 people losing their jobs in media-related outfits. The future is bleak. The cost of producing news is escalating. Yet the revenue is dwindling. Real journalism costs money. Lots of money.

Government intervention is needed fast. To ensure a functioning democracy we need a vibrant free press. Only the right ecosystem will make that possible. Sustainability of the media is as important as maintaining democracy itself.

> The writer is a National Journalism Laureate. He was formerly chairman of a major media company. He is also an award-winning writer, a stage actor, director and playwright.