A better deal for media: Getting BigTech to pay newspapers for content is good news

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February 24, 2021 6:15 AM

Since the credibility of the media often depends upon it not buying the government line and in presenting the true facts to the reader, it is not clear how this conflict is to be negotiated.

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It is not clear if, and how, the deal that the Australian government is working out for its traditional media—newspapers, radio and television—in the fight against BigTech giants like Google and Facebook will get replicated in other countries, including India, but there can be little doubt it is good news. Traditional media has been under threat the world over, with stagnant or declining readerships and, as a result, with revenue streams dwindling.

In countries like India, the threat has been made worse by the advertisement-driven nature of revenues though some newspapers are trying to make up by hiking the cover price of their offerings. While declining or static readerships made things tough for smaller organisations, the move towards digital subscriptions made things worse. Going digital, there is little doubt, increased newspaper readership, but the bulk of online advertisement accrues to the BigTech giants like Google and Facebook; so, while the advertiser has shifted from traditional media to online media, those generating the news are getting a smaller share of the pie.

This is what the Australian deal hopes to change since BigTech will now be forced to pay traditional media for the use of its content. How much is not clear since firms like Google and Facebook also contribute to the revenues of traditional media by driving more readers to their sites. Indeed, the referrals generated for traditional media were the reason cited by Facebook for not paying Australian media firms for using their content; Facebook has, since, changed its mind and agreed to pay for what it uses.

It is, of course, worrying that the final deal that traditional media is able to get depends upon the goodwill of the government. To begin with, each government will have to formulate rules such as the one Australia has. And, if the Australian model is replicated, an arbitral panel will mediate on the offers made by BigTech firms and what traditional media firms want.

Given the government will be driving the policy, chances are the panel will also be selected by the government. Since the credibility of the media often depends upon it not buying the government line and in presenting the true facts to the reader, it is not clear how this conflict is to be negotiated. For now, though, the possibility of getting paid their due is a big win for traditional media which should exhort their government to join Australia in taking on BigTech firms.

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