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The News Media Bargaining Code - the medias way of reclaiming their informational top spot on digital platforms

Aug 26, 2020

Welcome to Finance and Fury, the Say What Wednesday edition.

This episode is a bit of a special episode –looking at some legislation in Australia that is currently underway –

Has to do with the Government stepping in for the Monetisation of the news – which could ultimately mean the consolidation and control by legacy media of the information that you receive

Might have, or may not have heard about this new bill that is going through parliament - likely to pass in Australia in the next week – called the News Media Bargaining Code

  1. On the 20 April 2020 - the Australian Government announced that it had directed the ACCC to develop a mandatory code of conduct to address bargaining power imbalances between Australian news media businesses and digital platforms – like Google (youtube) and Facebook
  2. What the ACCC says – “the production and dissemination of news provides broad benefits to society beyond those individuals who consume it. The proposed bargaining code is intended to address bargaining power imbalances between Australian news media businesses and digital platforms in order to ensure that commercial arrangements between these parties do not undermine the ability and incentives for news media businesses to produce news for Australians.”
    1. But is this what is really going on? If it were just about monetary arrangement in bargaining powers – why does this bill propose that the media outlets should also get backdoors into the algorithmic curation of news on these platforms and advance notification of algorithm changes – as well as potential access to users data
  3. This bargaining code is being developed by the Australian Competition and Consumer Commission (ACCC) in close consultation with the Department of the Treasury (Treasury), and the Department of Infrastructure, Transport, Regional Development and Communications (DITRDC)
  4. Digital platform services to be covered – major ones being Facebook and Google (including YouTube) – where most people get their news – but the code suggest that these platforms have become unavoidable trading partners with Australian news media businesses
    1. Hence – they see that there is an imbalance in bargaining power – Channel 9 or the ABC creates the news and it gets viewed through youtube or FB –
    2. However, the ACCC intends for the code to include mechanisms to allow the addition of other digital platform services – anywhere that news is viewed –
    3. Accelerated Mobile Pages (AMPs), Android TV, Instagram and WhatsApp (owned by Facebook)

I want to be clear – when talking about these mega companies – like Google (Youtube) or Facebook – I’m not a massive fan – is a private company that already promotes what they want – they have monopoly and act as such -

  1. This bill on the surface would start playing the Smallest violin in response to googles outcries – but is there more to the story
    1. At the surface – Google and FB should be legislated for the anti-competitive behaviours – but they are the biggest donors to both sides of the political isle in the USA – so nothing will happen –
    2. They also have platform rules whilst taking publisher rights – to oversimplify these laws -
      1. Platforms – are immune for being sued as they simply
      2. Publishers – curate the content – through editors –
    3. However
  2. Don’t get me wrong – Youtube can be a great tool – waste hours watching cat videos or watching lectures on economics or history – choice is up to the individual
  3. However – they have been taking advantage of a weird grey area – which isn’t a level playing field to media companies in the first place – however media businesses have been the beneficiaries to these practices
  4. That is where the next section of the legislation states – “Value of news to digital platforms” – where the availability of news on each of Google and Facebook (as extracts of, hyperlinks to, and/or full reproductions of, news content) provides value to these platforms in the form of:
    1. direct value: revenues from advertising displayed within or adjacent to the news content on the digital platform’s services (direct revenue), and
    2. indirect value: the value of the increased use of the digital platform’s services by users attracted or retained by the availability of news content, which may include:
      1. increased advertising revenue generated by the digital platform’s services collection of additional user data that can be used to improve the digital platform’s ad targeting across all of its advertiser-facing services
      2. collection of additional user data that can be used to improve the user experience across all of the digital platform’s consumer-facing services.
    3. I would say that media and these digital platforms have been helping to fuel one another – not to act like the media is slumming it from youtube or from google which sends people to news article sites –
      1. On both media generates ad revenue – from Youtube alone they generated $10m last year in ad revenue
    4. But now in Aus – the media could potentially do so as well

The major parts of the bill – 3 – additional revenues, the algorithm and the data

  1. Revenue - Looking at the ACCC draft legislation – called on internet companies such as Facebook and Google to pay for content that was published that media companies produced –
    1. would allow news companies to negotiate as a bloc with tech giants for content which appears in their news feeds and search results
    2. adopts a model based on negotiation, mediation, and arbitration to what they quote as to "best facilitate genuine commercial bargaining between parties, allowing commercially negotiated outcomes suited to different business models used by Australian news media businesses”
    3. Important to note that the terms of negotiation, mediation and arbitration all refer to the courts – legal fights for settlements – which the ACCC will likely take free of charge at the cost to these digital platforms
    4. However - ACCC believes the code is necessary to address the fundamental bargaining power imbalances between Australian news media businesses and major digital platforms
    5. Estimates show that media companies are asking for 6 times their estimated value in ad revenue – or at the early stage of this negotiation - $60m up from the $10m in their worth of ad revenue –
    6. Would be like an independent content creator going to youtube and asking for a pay rise – what would youtube say? Well nothing – but that is because the independent individuals don’t have the courts at their back
  2. Algorithm access – The code states that “the algorithms used by Google and Facebook are the intellectual property of the companies that own them, and each company maintains the right to change its algorithms as it sees fit.
    1. However – “This gives Google and Facebook a significant amount of control over the content likely to be accessed by consumers, and consequently on businesses’ ability to monetise their content through Google and Facebook services.
    2. So the ACCC seeks to rectify this imbalance through the bargaining code through having the provision of advance notice of significant algorithm changes to news media businesses, the prioritisation of original news content, and special treatment of paywalled news content.
    3. Report considered that the lack of algorithmic transparency (including the absence of notice of changes to their algorithms) is likely a manifestation of the bargaining power imbalance between the digital platforms and news media businesses – so the Code requires digital platform to give all news media businesses advance notice of algorithm changes and explain how they can minimise the effects – giving the ins and outs of the algorithmic code
    4. This legislation as it is currently drafted, requires digital platforms to give news media businesses 28 days' notice of algorithm changes that as they put “are likely to materially affect referral traffic to news”
      1. remember that these algorithms and their changes are designed to affect ranking articles
      2. So media companies will know what the substantial changes to the algorithms will be and can alter their copy to the display their content above others
    5. Google said that this 28-day advance notice is really a 28-day waiting period before they can implement the changes in their systems – this in turn affects the whole world – remember that these algorithms are world wide – but Australian media businesses will get the jump on the rest of the world – and the rest of the worlds media
      1. Begs the question – how long until this is implemented else where for media to equal the playing field?
    6. Data sharing – as part of this – tech companies have added in its statement that the code requires it to tell news media businesses what user data it collected, what data is supplied to them and how they can access the information that is not supplied to them
      1. Google has said that this goes beyond the current level of data sharing between Google and news publishers – but the ACCC said that these tech companies will not be required to share any additional user data with Australian news businesses unless it chose to
      2. However - the code requires digital platforms to tell a registered news business how it can gain access to data – so apparently companies like Google would not be required to share any additional user data with Australian news businesses unless it chooses to do so – but on the other side you have digital platforms saying that the legislation would in fact require them to do that – dare say it would be one of those situations where they technically might not have to – but it is in their best interest – like paying protection money to the mafia – but who knows – only the draft legislation is out at the moment and it is very opaque
        1. So if it is the case – and digital platforms are required to hand that user data over to news organisations – firstly - there's no way to know what controls they have in place nor how your data will be protected – and secondly - how it might be used by news businesses – as it is very valuable –
        2. This being said – don’t trust google or FB with that data either – as their major revenue streams do come from the data collection and sharing
      3. Either way - All of legislative changes gives legacy media an unfair advantage over everyone else who has a website, YouTube channel or small business
        1. Also allows the legacy media to make enormous and unreasonable demands on other companies that provide a competitive source of information – like independent news and individuals who provide this
        2. These large media businesses would be given information that would help them artificially inflate their ranking over everyone else – help to bury the competition and help to reclaim their monopoly position on providing information
      4. What I think brought this all about -
        1. This is only speculation – but Media large companies – they have massive costs – and not many people turn in – so can’t compete when compared to small independent channels –
          1. For instance – if I started only covering news topics – my only costs are hosting for the podcast – compared to the rent, salaries, ongoing bills of media companies – they wouldn’t be able to complete
          2. It isn’t like most news channels do investigative journalism these days – they write articles from their homes or offices – no different to myself
        2. So they want two thing –
          1. Get additional revenues from digital platforms to compensate them for their poor jobs of providing information to the public – beyond the same narrative that is on every channel
          2. Be able to get additional views by gaming the system – reducing the search functionality to independent media
        3. So these media companies lobbied the government – complained that they lost the narrative and wish for daddy government to solve the problem – and sent the right political donations to the right people
          1. Whilst at the corporate level, google, YT and FBs practices aren’t fair – quite unfair – they were already promoting late night talk shows over actual independent media – already had pay for plays
          2. This is a legislative way for legacy media to try and forced their own rise after their decline of the past decade
          3. The real consequences – Algorithmic curation as well as access to data – so the control of information and the monopoly held by legacy media Is trying to be legislated back into reality -
        4. Personally – I am only against this bill due to the unfair advantage it provides to the legacy media – it really shows their hand – If their sole responsibility was to provide news – information to you – would be happy that it is on youtube, FB, wherever – but remember that I have always had the view that their prime directive is for profit – hence the curation of news that they have – not to inform but to make profit – hence they have become a semi-factual outlet to drive views – that is all that they aim for – what can we tell people to get them to watch –
        5. Just like reality TV shows – you want sensation to get views – however Australia has proven to be the testing ground or a lot of legislation – wouldn’t be surprised if this same legislation is introduced in the US in the next few years –
          1. Also likely to expand on the EUs copyright directives that were passed in part last year
        6. This sets a dangerous precedent – and it is not the right legislation to reign in the large tech companies – simply transfers the balance of power between one large untruthful organisation – to a legacy company which has proved to be just as untrustworthy
        7. Just my two cents – do with it what you will – there are petitions – but given the current trend – may be too late to do anything as this is another rushed bit of legislation in the midst of a distracted news cycle – and regardless of public opinion – rarely gets paid attention to –
        8. Just bookmark or subscribe to your favourite independent media sources on youtube or google – and have to actively search.

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