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article imageOp-Ed: Google and Facebook vs Australia – A test for global news groups

By Paul Wallis     Aug 17, 2020 in Internet
Sydney - The Australian government’s decision to get Google and Facebook to pay for Australian news site content isn’t getting traction with the internet heavyweights. Arguments are total opposites, and it’s a serious test of government vs the internet.
Google is totally opposed to the legislation, called the News Media Bargaining Code, with good reason. This could be a legal precedent for similar legislation worldwide, impacting its revenue and complicating basics. The theory is that Google should pay for supposedly “lost” revenue generated by posting on Google.
The theory of the new law is that news media will bargain for payments with Google and Facebook. Either they reach an agreement, or an arbitrator makes a decision about payments. This is not likely to be well accepted by either Google or Facebook. The bargaining and arbitration process is also likely to be lengthy and expensive for both parties.
Google published an open letter to Australia critical of the new law, and predicted worse services for Australia as a result of the legislation. Google says the law will impact searches and YouTube very negatively. The company also states that private data could be put in the hands of big business, a sensitive if somewhat vague position regarding user privacy.
Facebook is equally negative, for much the same reasons. The News Media Bargaining Code has nothing much to recommend it for Facebook, which is a huge sprawl of posts of all kinds. Paying for some of those posts is likely to be time-consuming and expensive for it, too.
Criticism and doubts, acceptance and exclusions
To say the News Media Bargaining Code has created a confusing mass of situations would be a massive understatement. There has been longstanding pressure from some media organizations for some time. News Corp is the leader of the pack. Rupert Murdoch has been bitching since at least 2008 about “news aggregators”.
The theory of payment is that news companies receive money for “lost” revenue through advertising. That theory doesn’t stack up too well in practice. Exactly how much revenue is “lost” isn’t at all well-defined, not even to the extent of a dollar figure backed up by actual advertising sales that I’ve seen.
Who reads Australian news? Australians, mainly. Do Australians rush out and click every ad on news sites? No. Do people from the United States or Bangladesh flock to buy mufflers from Australia based on an online ad? No.
So where are the hard numbers? I work in advertising, and was born in an ad agency. You can accurately measure sales revenue through ads. I don’t see any actual ad sales or ad revenue figures, just estimates, and that’s hardly good enough as a basis for any sort of valuation of ad revenue.
On what basis are Australian news sites being disadvantaged? Australian news media is getting huge amount of international exposure online for free with these links posted on Facebook. Facebook users wouldn’t see them at all otherwise.
Nor would Google News users. The fact that Google News simply links to Australian media sites doesn’t seem well understood. News Corp sites, in fact, dominate Google News around the world. A lot of hits come from Google.
Now, let’s explain to the unspeakably stupid
I’ll do this with a plain English explanation and a translation into Management Science Jargon:
Plain English:
• The hits you get on your news sites from Google and Facebook are extra hits you may well not otherwise have had. These added hits cost you nothing.
• People see you’re covering a story, and to read the story, not the ads. Who the hell reads news for the sake of looking at the ads? (Or is that getting a bit mystical?)
• Actual ad revenue is based on ad sales, not statistical mythology. All news media have their own in-house ad sales, which are positively impacted by extra hits.
• Google Ads are used by all news sites around the world. Advertisers pay for those clicks on a voluntary basis. That's a private contract between Google and other parties, idiots, if that's what you're talking about. Nothing to do with the news sites at all. So you’re telling Google they should effectively pay for their own ads you already quite happily have on your news sites? Is the message getting clearer?
• You’ve left out all other major social media? Why?
• An even more absurd situation is possible. Google acts as an agent posting ads and getting paid for it. Should all other advertising agencies now pay for advertising on Australian news sites? If not, why not? (That's assuming the "lost" revenue is from Google PPC, which is also under private contract, another legal minefield.)
Now the elegant, dynamic Management Science version. ((Pity we can’t do Copperplate fonts for this magnificence):
If the diddumsy news sitesy-witesy gets hits from Google and Facebook, that be good for the snookums and make fluffy money. If the diddumsy news site not gotsy-wotsy hits from external links, the news site stone futhamucking dead quite possibly be, Luke.
The bill for this stunning bit of over-articulated expert expression will be forwarded to the next of kin of news sites as required.
This new law is idiocy incarnate
This new law is a truly stupid idea. Let’s clarify a couple of things which are common knowledge:
1. Online advertising is not a gold mine. Quite the opposite; it’s a hit-or-miss thing.
2. Corporations are well-known to talk up their own revenue values on a reflex basis. Over-valuation is the norm. There’s still no hard evidence of massive revenue impacts on Australian news sites or anything else. Why isn’t anyone else complaining about Google listings or Facebook posts?
3. It doesn’t cost any news site a damn thing to get published on Google or Facebook; why add cost to them and possibly lose the added audience?
4. “Lost revenue” might well be even less than these overrated, underperforming advertising cretin-fests currently generate.
5. Ad values apply to a specific customer base to which ads are targeted. Only the classifieds are generic ads, and their value is highly debatable in dollar terms.
6. You can’t say everyone reads The Australian or the Daily Telegraph solely for the ads. …Or can you?
7. Reduction in exposure hardly helps Australian news sites, if Google and Facebook pull the plug.
8. Australian news sites need all the exposure they can get. The whole idea is counterproductive on that basis alone.
9. Google and Facebook don’t publish copyright materials. They publish links only. It’s not the same thing, and not possibly infringement of copyright under current copyright laws as far as anyone knows or has ever mentioned. There have been no legal actions so far as I’m aware alleging infringement, either.
Reality can bite hard, both ways
The administrator of the new law is the ACCC, the Australian Competition and Consumer Commission. Given that the agency is now stuck with what seems to be no more than a politically motivated initiative, there’s not much they can do with it but try to make it work.
The ACCC has published a rebuttal of the Google open letter. It’s more than a bit hard to agree with the ACCC’s assertion that the new law “addresses a significant bargaining power imbalance”, given that there was no bargaining at all, or anything to bargain about, previously.
News sites around the world are watching this. If it works, the floodgates open globally for added costs to Google and Facebook. If it doesn’t, maybe a less highly selective basis for assessment of ad revenue might emerge. Don’t hold your breath.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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