Nine Entertainment and News Corporation are wrong to say Google and Facebook have destroyed their business models by stealing content, according to news publisher Eric Beecher.
Giving evidence before the Senate hearing on the government’s proposed media bargaining code on Monday, Mr Beecher said representatives from Nine, News Corp and The Guardian had wrongly accused Facebook and Google during previous hearings of “stealing both their content and their advertising revenue”.
Mr Beecher, the chairman of Solstice Media and owner of Private Media, said the multibillion-dollar organisations clearly gained more than they lost from sharing their journalism on Facebook and Google.
“Those media companies actively provide snippets or their full journalism to the platforms for one blindingly obvious reason: They gain huge benefit from the exposure – and clicks – their content attracts on Google and Facebook,” he told the senate committee.
“If they didn’t, they wouldn’t allow it to be ‘stolen’.”
Mr Beecher, who also chairs Motion Publishing, publisher of The New Daily, disputed claims that the internet giants had siphoned off advertising revenue from the news organisations.
He said that before Google and Facebook most of this revenue came from newspaper classifieds that have since moved online.
Mr Beecher said this money had “ended up in the pockets” of realestate.com.au (owned by News Corp), Domain (owned by Nine) and other classified advertising websites like Seek and Carsales.
“As has been meticulously researched, the vast bulk of Google and Facebook’s advertising revenue has not come from news publishers,” he told the hearing.
In an earlier submission to the senate inquiry, Facebook said it had generated 4.7 billion referrals to Australian media publishers and shared $5.4 million in revenue with them between January and November.
It also claimed “the commercial value we derive from news content in Australia is virtually zero”, while Google has threatened to remove its search engine from Australia if the current version of the code is passed into law.
Despite disagreeing with key arguments used to defend the media bargaining code, Mr Beecher said the internet giants were “almost certainly too powerful” and should be legally required to “pay full Australian tax on all their Australian profits that stem from all their Australian revenue”.
“I’m not here to defend Google and Facebook,” he said.
“Their market dominance and the information they collect about their users’ online behaviour is scary.”
Mr Beecher said the huge market share and tax minimisation strategies of the internet giants provided enough justification to ask them to pay a “social licence” fee to support public interest journalism.
“For those reasons — not because of spurious arguments about stealing content and advertising revenue — I believe they should pay what is, in effect, a social licence to support the public interest journalism that has been severely affected by the invention of the commercial internet, which Google and Facebook dominate,” he said.
Senator Sarah Hanson-Young, who is the Greens’ media spokesperson and sits on the committee tasked with interrogating the proposed new laws, also called for the code to explicitly support public interest journalism.
She said in a statement that the Greens would seek amendments to the bill that:
- “Require news organisations to spend the revenue from the Code on resourcing public interest journalism
- “Require the 12-month review of the Code to report on the impact that the Code is having on small, independent and start up publications.”
“Media diversity is essential for public interest journalism. The Code must cover all publishers that contribute to public interest journalism in Australia,” Senator Hanson-Young said.
During the hearing, Mr Beecher said Mr Frydenberg’s code should be amended in two specific ways.
First, in the interests of enhancing the diversity of media ownership in Australia, the code should be adjusted to provide “meaningful financial support for Australia’s 100 or so small-to-medium regional and urban news publishers”.
For this reason alone, Mr Beecher told the Senate hearing that Nine and News should not receive “the vast proportion of funding” provided by the code.
Second, he said the code should address key concerns raised by Google and Facebook.
Mr Beecher said Google is concerned about the way the code will require them to provide funding to news publishers. Namely, he said, the company is worried that the code will ask it to pay publishers to display snippets of news stories, which, if replicated globally, could unwind its entire search business model.
“But if they pay publishers through other means, such as licensing content for new products like their News Showcase, they [will] have made it clear [that] they will proceed to support the Australian news industry,” Mr Beecher told the hearing.
He said Facebook’s primary concern, meanwhile, is the lack of any guidance or specific limit on the amount of money the code could ask it to pay.
“Some kind of liability guidance would remove that objection,” he said.
“On both these issues, I would argue that minor adjustments to the bill would in no way distort or compromise its intentions, and would give far greater certainty that the platforms will participate and therefore that Australian news publishers – large, medium and small – are given this once-in-a-lifetime financial support to play their role in our democracy.”