Australia news media ‘large and small’ discuss Google deals

 

Google is increasingly negotiating generous agreements to pay for news with large and small Australian media firms as lawmakers consider pushing internet giants into such deals, Australia’s treasurer said Wednesday.

On Monday, Seven West Media became the first Australian news media corporation to sign an agreement with Google to pay for journalism. It is confirmed that its competitor Nine Entertainment is close to announcing its own deal.

Treasurer Josh Frydenberg reported that the Australian Broadcasting Corp., a state-owned corporation, is also in talks and plans to invest some money from Google on regional journalism.

“Negotiations are currently going on with all the major players and the minor players,” Frydenberg said. “This will help to sustain journalism in this country’s public interest for years to come.”

If not for proposed legislation to create a so-called News Media Negotiating Code, Frydenberg said “none of these deals would happen.”

In the House of Representatives on Wednesday, lawmakers were discussing amended legislation to create the code.

In situations where Google and Facebook struggle to strike agreements with media organisations whose original journalism they connect to, the code will establish an arbitration tribunal to determine a binding price for news.

“All I have heard from the parties is that these are generous deals, both in the news media business and in terms of digital platforms,” Frydenberg said.

“These are equal transactions. These are fine offers. These are good offers for the media companies in Australia,” he added.

The code was condemned as unworkable by Google and Facebook, which take up a combined 81 percent of online ads in Australia.

Google says that if the code is adopted, it could make its search engine inaccessible in Australia. If the platform has to pay for news, Facebook said it will block Australians from sharing news.

Following weekend talks with Mark Zuckerberg, CEO of Facebook, and Sundar Pichai, CEO of Alphabet Inc. and its Google subsidiary, Frydenberg said he was persuaded that the platforms “want to enter into these commercial arrangements.”

By agreeing to change the law, Frydenberg denied he had given ground to Zuckerberg and Pichai.

“We were holding the line and holding it strongly,” said Frydenberg. And the digital giants were left with no doubt about that. The government’s commitment.’

Google said it was “in discussions with large and small publishers.” Facebook is still searching for news deals, but said at this point it didn’t have “anything to confirm.”

Under Google’s own model, News Showcase, the Australian dealings with Google are being negotiated. Since it launched News Showcase in October, the company has signed pay deals with more than 450 publications globally.

Investment bank JPMorgan reported that, based on an analysis of similar deals in France, Seven West Media will earn between 39.5 million Australian dollars ($30.6 million) and AU$69.2 million ($53.6 million) a year from its content deal with Google.

The Sydney Morning Herald, which is owned by Nine, announced that Nine had signed a letter of intent with Google for a contract worth more than AU$30 million ($23 million) a year for five years.

The newspaper quoted unnamed industry sources familiar with the talks who, because of confidentiality agreements, could not talk publicly.

“Nine said it was having “constructive conversations” with Google and Facebook in a tweet.

Two weeks ago, Google revealed that under News Showcase it had started paying for seven much smaller Australian websites. Prices were not revealed.

Facebook does have a similar product called Facebook News, but in Australia it is not available.

Some media observers are shocked that as they stand to make more money from mandatory arbitration under the government’s code, Australian media firms will hit News Showcase deals.

As the “speed of these negotiations has picked up,” Frydenberg indicated that Google’s threat to leave Australia had receded.

“In Australia, we tried to retain the major players,” Frydenberg said. “Google spoke of leaving Australia. We didn’t want that to take place. They are a big part of the age of the digital landscape.

Marcus Strom, president of the Australian Journalists Union’s Media, Entertainment and Arts Alliance, said that media organisations have a moral responsibility to acquire news from digital channels.

Strom said, “Any money from these deals needs to end up in the newsroom, not the boardroom.” “We will press for transparency as to how these funds are being spent.”

Google is under pressure to pay for news from authorities elsewhere. It signed a deal with a group of French publishers last month, paving the way for digital copyright payments to be made. Google can strike individual licencing agreements with newspapers under the arrangement, with fees dependent on factors such as the amount of regular and monthly internet site traffic reported.