Forced by a new media code in Australia, Google has succumbed to pressure and agreed to pay a fee for news that is shown on Google. Photo: REUTERS/Dado Ruvic/Illustration
Forced by a new media code in Australia, Google has succumbed to pressure and agreed to pay a fee for news that is shown on Google. Photo: REUTERS/Dado Ruvic/Illustration

Big tech pay time for news

By Wesley Diphoko Time of article published Feb 21, 2021

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THERE’S a revolution under way that may lead to a sustainable media industry in the future.

Although it’s early days, developments that are led and inspired by leading Big Tech companies (Google, Apple, and Microsoft) point to a future where the media can make real money from their digital efforts and presence.

It’s a matter of time before all countries will demand that Big Tech companies pay media companies for their content.

When that time comes we will look back and say it was started in Australia. Forced by a new media code in Australia, Google has succumbed to pressure and agreed to pay a fee for news that is shown on Google.

This is a significant moment for the media industry in Australia and the world. Revenue has been a serious challenge for media companies as more and more advertisers prefer to give their advertising dollars and rands to Big Tech giants. This in turn has impacted the sustainability of the news media business.

The legislation will redress the economic imbalance between technology and journalism by mandating negotiations between these tech gatekeepers and independent news organisations.

The goal is to provide the news organisations with compensation for the benefit derived by tech gatekeepers from the inclusion of news content on their platforms.

Second, the imminent move (which was highlighted on these pages last week) by Apple which will see the release of an operating system (iOS 14.5) will enable users to choose privacy and thereby prevent Facebook from turning user data into a lucrative revenue stream. This development may move advertisers to shift their spending from Facebook and back to media entities directly.

Facebook serves as the middleman between media entities and advertisers. Although for now, some are moving to Android there’s also a likelihood that this shift may enable a renewed relationship between media entities and advertisers. As Facebook may no longer offer the same reach as it used to before the closure of privacy loopholes.

Third, another member of the Big Tech group of companies, Microsoft, has endorsed the Australian model. Microsoft president, Brad Smith, has said: “The US should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead.”

Smith makes two critical points; first, that the Australian model is innovative in addressing the Big Tech and media challenge; and second, that the US should implement the same model. This is an unprecedented and noteworthy move by a US tech company which signals massive support for the idea of tech companies paying media entities for news.

It may begin a process that may see tech companies paying media companies across the world. For that to happen, however, governments and media organisations will have to lead.

What is about to happen in Australia did not just happen because tech companies were nice players in this game. The Australian media code has been two years in the making and Australian Prime Minister Scott Morrison has pushed forward with legislation to redress the competitive imbalance between the tech sector and an independent press.

South African media is not immune from the devastating impact of Big Tech in the media industry. The shift in advertising from media entities to tech companies has left the media industry in bad shape. To correct this situation will take leadership from all involved.

Despite the fierce competition between media entities in South Africa, on this matter the industry will have to speak with one voice and engage Big Tech companies.

The South African government can no longer just watch and be a neutral observer while the industry is disappearing due to the unfair advantage of Big Tech companies. Legislation similar and even better to that developed in Australia is required to correct the competitive imbalance.

While this is taking place South African media entities will have to be innovative to keep audiences engaged. After all, it was innovation that enabled Big Tech to eat the media’s advertising lunch.

The legislation will address part of the imbalance and the rest will require the media industry to evolve through innovative media solutions.

Wesley Diphoko is the editor-inchief of Fast Company (South Africa) magazine

*The views expressed here are not necessarily those of IOL or of title sites

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