Meta or no Meta, the news publishing industry has a fundamental problem
The News Media Bargaining Code is a coward’s game, attempting to shift advertising revenue out of the multinational tech giants and into the independent news space - also ran by multinationals, just not tech companies.
This redirection of funds, while seemingly beneficial on the surface, does not, and has never, tackled the underlying issues plaguing the news industry locally or globally. Joe Frazer, head of growth and digital at Half Dome, explains.
The fundamental flaw in the News Media Bargaining Code lies in the assumption that merely shifting advertising revenue can sustain the quality and diversity of journalism that a functioning capitalist democracy demands.
A more effective, bold and, frankly, cleaner strategy would involve Australia’s government taking a proactive role through taxation of these tech behemoths, subsequently using the collected funds to support all public needs better, including independent journalism. This approach would not only ensure a more equitable distribution of resources but also promote a news ecosystem that thrives on quality and diversity – which the blind redistribution of advertising funds to big news players does not.
Look at the United States, where the CNBC/Fox duopoly highlights the dangers of prioritising viewer engagement, and large news companies, over journalistic integrity and meaningful reporting. The Australian government has the opportunity to learn from this example and legislate in a manner that fosters a robust, independent news industry which is not dominated by two or three players.
Those who argue that the responsibility lies with advertisers to redirect their spending towards quality news platforms and “the open internet”, apart from overwhelmingly working at companies with a vested interest in it, seem to have wholeheartedly forgotten the basic roles of government and private organisations.
There is no world in which advertisers should be held accountable for the challenges facing the news sector.
New Zealand’s recent struggles with the closure of newsrooms reinforces that this is a government failure. Facebook New Zealand generated $NZ154 million in advertising revenue, net profit of $NZ3.3 million, and paid $NZ1 million in income tax. Some back of napkin sums indicate that Meta New Zealand invested directly, (wages/infrastructure etc.) and indirectly (taxation) $NZ3 million into the market whilst pulling $NZ154 million out of the economy into tax havens globally.
Apple, Microsoft, Google all tell similar stories. It is daylight robbery which is being sanctioned by governments.
As a media planning and buying agency, Half Dome’s zero base budgets for clients are based on a robust understanding of the consumer journey, where they are spending their time, the attention we can garner, and ultimately the impact we can generate for our clients.
Yes, this leads to platforms like TikTok, Meta, and Google, receiving a significant chunk of the pie.
No, I do not believe we should change this approach to vaguely fund either “the open internet” or “independent journalism” – whatever that is.
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This is a very complex issue, but Joe has nailed one aspect of it neatly. Legacy media has been able to influence our governments at all levels since we were colonies. As such the media has always railed against government interference. Now it wants government help to deal with the digital behemoths. Making the digital groups pay real levels of tax on their earnings here rather than sending them off to a tax haven is the answer.
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News media effed itself when it became content for clicks (mostly from social) rather than real journalism. If it cared so much about integrity, honesty, accountability and the public’s right to know then it wouldn’t hide stuff behind a paywall.
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See my comment to Will Hayward CEO Private Media a few days ago.
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