Australia’s latest move to force tech giants like Facebook and Google to pay publishers for news content on their platforms has sparked a discussion worldwide on reining in tech monopolies and rescuing good old journalism. At the crux of the issue is the deteriorating health of traditional news media, especially print, and the flight of advertising (a major of source of revenue for print media) to digital platforms. But how did we arrive here and what can be done?
The Crisis in Traditional Media
Good journalism costs money. A news organisation needs money to not only pay journalists working for it but also for putting in place an infrastructure for gathering news and information, making sense of it, and disseminating it to the audience. With time came newer technologies and challenges, all of which resulted in greater capital investment while the sources of revenue either remained the same or simply dried up. One of these sources is advertising which makes up for more than two-thirds of a newspaper’s revenue. However, a lion’s share of the advertising pie is now being cornered by tech giants like Google and Facebook, leaving precious little for news publishers.
According to a report by the Australian Competition and Consumer Commission (ACCC), online advertising spend ballooned from 25 to 53 percent between 2012 and 2018. And out of every $100 spent on online advertising, $53 went to Google, $28 to Facebook, and the rest was shared among others including news publishers. This flight of advertising to digital platforms has disrupted the revenue models of traditional news media which was already facing the heat from the rise of private television news channels.
The result has been near catastrophic. In Australia alone, 106 local and regional newspapers have shut shop between 2008 and 2018. 21 local government areas are without a single local newspaper. Consequently, the number of journalists in print media businesses fell by 20 percent between 2014 and 2018. And all these are statistics from the pre-pandemic era. 2020 dealt a fatal blow to the news industry, forcing hundreds of outlets to shut shop across the world.
The Role of Tech Giants
It is true that platforms like Google and Facebook have helped news media increase their presence and recall among readers. In fact, they’re increasingly becoming the primary source of news consumption for a lot of people. No wonder, almost all news publishers- whether large or small- curate content for online consumption. ACCC’s report says that 50 percent of traffic to Australian news websites comes from Google or Facebook thereby contributing to their revenues. However, this isn’t a level playing field. The increased traffic to news websites gives news publishers a fraction of what tech monopolies like Google make by attracting eyeballs and hence, advertisers. In fact, 40 percent of trending queries on Google are news related.
This is where the proposed Australian law comes in. It mandates tech giants to enter into an agreement with and pay news publishers for using their content, failing which a government mandated arbitration panel would take over and help both sides strike a deal.
How It Saves News and Democracy?
For one, it ensures that traditional news media remains financially viable which in turn would arrest the job losses in the media industry. Secondly, declining financial health of news media invariably results in a decline in quality and credible news sources thus, empowering fake or less reliable news sources. 2020 exemplified the importance of print media in countering what was by every means an infodemic in addition to the deadly Covid-19 pandemic. The menace of misinformation, fake news, propaganda, and other challenges have made quality journalism more important than ever. Moreover, a robust and independent media is critical to sustaining democracy and constitutionalism, both increasingly under attack across the democratic world.
Democracies worldwide are putting big tech on notice and rightly so. The Australian law has found huge resonance in Canada, the European Union, France, Germany, Spain, and the UK. It is high time that India- the second largest online market- jumps on the bandwagon and reigns in tech monopolies to remedy both news and democracy.
Views expressed above are the author’s own.
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