According to an article just published on Bloomberg, Facebook has announced that it is working to restore news pages in Australia after reportedly coming to an agreement with the government over the Media Bargaining Code. Quoting William Easton, MD of Facebook Australia, Bloomberg reported that restrictions on news sharing "should be lifted in the coming days". This comes shortly after the Australian government, which initially said it will not budge on the matter, made several changes to the legislation, said the article. This includes offering digital platforms time to ink commercial deals with publishers "before forcing them into a final-offer arbitration".
The social media network caused a major uproar in Australia last week, after it restricted publishers and Australian consumers from sharing or viewing Australian and international news content. This was in response to Australia's Media Bargaining Code which will see Facebook and Google being fined "hundreds of millions of dollars" should they refuse to pay for news content. According to Reuters, the law also requires tech firms to notify media outlets when they amend search algorithms that would affect the order in which content appears. Additionally, tech firms are also required to share how they use consumer data which was extracted from news content on their sites.
For Australian publishers, the initial ban meant they were restricted from sharing or posting any content on Facebook Pages. However, admins were still be able to access other features from their Facebook Page, including Page insights and Creator Studio. While international publishers could continue to publish news content on Facebook, links and posts however could not be viewed or shared by Australian users. On the consumer front, Australians users also could no longer view or share Australian or international news content on Facebook. International users are also unable to do the same for Australian news content only. Since the ban, Facebook was heavily criticised by news publishers, politicians and civil society groups in the US and UK for "an attempt to bully a democracy” and “threatening to bring an entire country to its knees”, The Guardian said.
In a blog post last week, after the initial ban, William Easton, MD, Facebook Australia and New Zealand, explained that both Facebook and Google responded differently because the platforms have fundamentally different relationships with news. According to him, Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. But for Facebook, publishers willingly choose to post news on the platform as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue. Easton added that Facebook has also made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favour of the publishers.
Easton's post also said that Facebook generated approximately 5.1 billion free referrals to Australian publishers last year worth an estimated US$321 million.
"For Facebook, the business gain from news is minimal. News makes up less than 4% of the content people see in their News Feed," he explained. Easton added that company was prepared to roll out Facebook News in Australia which had been set up with the intention of being a dedicated place for news on the platform, and "significantly increased [its] investments with local publishers". But this would have only been possible "with the right rules in place".
Easton added that the Media Bargaining Code sets a precedent where the government decides who enters into these news content agreements, and ultimately, "how much the party that already receives value from the free service gets paid".
Meanwhile, Google dealt with the matter by entering a three-year global partnership with News Corp to feature its publications on Google News Showcase in return for "significant payments by Google". Among the list of News Corp publications include The Wall Street Journal, Barron’s, MarketWatch, and the New York Post; in the UK: The Times and The Sunday Times, and The Sun; and in Australia a range of news platforms, including The Australian, news.com.au, Sky News, and multiple metropolitan and local titles. The landmark three-year agreement also includes the development of a subscription platform, the sharing of ad revenue via Google’s ad technology services, the cultivation of audio journalism and meaningful investments in innovative video journalism by YouTube.
However, the deal made by Google didn't come without its own hurdles. A month prior to the inking of the deal, Google too threatened to shut its search engine in Australia should big tech players be forced to pay publishers for content. Google Australia's MD Mel Silva previously called the laws were "unworkable" and "unreasonable".
It is Facebook's right to remove news links
With the impending Media Bargaining Code in Australia, Geoff Tan, who was the former head of Singapore Press Holding's (SPH) content marketing arm Sweet and a media veteran taking on roles such as SPH's MD for luxury and custom publishing, and head of strategic marketing over a course of 34 years, explained that companies such as Facebook are entitled to act as they see fit. "Whether it be a business decision, or supporting a principle of application, Facebook Australia has every right to remove all news links from its platform in that geography," he said.
Tan explained that news publishers have for the longest time been grappling to find the right formula to sustain their bottom-lines, especially with the unabating high cost of journalism and continuing decline of advertising revenues.
Passing a bill to compel tech companies to toe the line, especially when billions of dollars are at stake, is likely to drive up the defenses of stakeholders and have them retaliate with actions that will implicate both publishers and readers.
According to Tan, it is not fair to say that the tech brands have not contributed to driving traffic to news websites and provided some form of upside for media organisations. Setting up a protective dome for legacy publishers via legislation is not necessarily the answer to the woes of news organisations, he said.
'A classic case of bullying by Facebook'
The Malaysian Newspaper Publishers Association (MNPA) called the initial ban by Facebook "a classic case of bullying" . On its home ground, MNPA is also pushing for global tech companies such as Facebook and Google to share ad revenue they have accumulated "largely at the expense of the newspaper publishers", the association said.
"News publishers in Malaysia are demanding for these digital giants to pay for journalism. We are not asking for more but for them to pay news organisations for content," it added.
In April 2021, MNPA sent a letter to the Malaysia Competition Commission requesting for it to pressure the duopoly to compensate publishers for news. Chairman Mustapha Kamil Mohd Janor, who is also CEO of New Straits Times Press, told MARKETING-INTERACTIVE in a follow up statement later on that more joint efforts should be explored so that both Google and publishers may reap full benefits within the news publishing industry.
Meanwhile, sharing his personal opinions on the matter, COO of Star Media Group Kang Yew Jin told MARKETING-INTERACTIVE that Facebook should take a more collaborative approach in working together with publishers and news providers. Kang explained that these organisations were one of the foundations that had helped to grow Facebook's audience and thereafter, their massive advertising based business.
Impact on advertising community
On the argument about advertising, PN Balji, a veteran Singaporean journalist who was formerly chief editor of Today and The New Paper, said the tension between Facebook, the publishers and the Australian government boils down to the issue of money. He said big tech companies make big money via ads, and ads boom if the platform bags the eye balls. Yet, legacy media giants are seeing dropping revenue. This is the classic setting for a battle of the old and the new.
"The question is who will blink first. My belief is that both sides will come to some kind of compromise," Balji said, days before Facebook backtracked on its ban. According to him, companies such as Facebook have the muscle to win the battle, and:
The lesson is never to allow your competition to entrench itself. If that happens, dislodging them will be kind of impossible.
Alan Soon, co-founder and CEO of Splice Media, who was previously Yahoo's managing editor for India and Southeast Asia and CNBC's senior producer, said that on the advertising front, if the ban went on for a longer period of time, companies would in the end have fewer avenues to run targeted ads. The new development also impacts digital-first news startups which relies on Facebook as a primary source of referral traffic. "Shockingly, some of them joined News Corp executive chairman Rupert Murdoch calling for this Code in hopes of making a quick buck," Soon said.
According to him, the winner in this case is News Corp, "which is proving yet again that it has no qualms using its dominance and money to bend the will of elected politicians". Soon also pointed out that it will be messy trying to define what represents news and users can expect to see NGOs, educational institutions, and even government agencies being erroneously getting tagged as news. He added, in a blog post, that this poses a tricky situation for international publishers. Reason being, they can post as many links as they want on Facebook, but their stories will remain unseen in Australia.
"This is a disaster for global companies such as The New York Times which opened an Australia office in 2017 to boost its coverage there, and sell local subscriptions. Say goodbye to reaching an educated, affluent, English-speaking audience with a propensity to pay," he said. For international media and media outlets service an audience in Australia, Soon said they will now have to encourage readers to go directly to their websites.
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Photo courtesy: 123RF
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