Tech giants need to pay for news they use

By Tom Felle

This article first appeared in the Sunday Independent

Minister Catherine Martin TD

The sustainability of Irish media is at a tipping point, and radical action is needed by the new Government and Communications Minister Catherine Martin to ensure its survival.

Newspapers (in print and online), local radio and RTÉ have been essential reading, listening and viewing during the COVID crisis. Journalists and editors have been working overtime to ensure the public is up to date and informed.

Despite this, the news organisations are on their knees financially, and there is a real danger that many may not survive.

Despite occasional failings, we are well served in the main by the Irish media. You may not like all of them, but they provide an essential public service in Irish democracy.

A report from the Reuters Institute for the Study of Journalism in July found that Irish media retain high levels of trust, bucking international trends. Social media ranked among the least trusted sources, according to the report, with three out of five Irish adults concerned about ‘fake news’ online.

Newspapers in print or online provide the public sphere necessary for debate, shine lights in dark corners, expose corruption, pork-barrelling and feather-bedding, and hold those in power accountable.

RTÉ is one of the best public service broadcasters in the world and has a remit far wider than just news – it supports the Arts, culture, drama and Gaelic Games, as well as its role as a public service broadcaster.

But the business model that supported journalism for 150 years has been battered for more than a decade by a perfect storm of changing consumer behaviour and a shift to online consumption; a collapse in advertising because of the increasing dominance of tech giants like Google and Facebook; and the failure by the news media to innovate and respond quicky to these threats.

Local woes

Local journalism is in particularly difficulty, despite its enormous importance. Some provincial newspapers have already closed and job losses and furloughs are rife across the industry.

The national public service broadcaster, RTÉ, is in dire straits. The TV licence evasion rate is now at 13 per cent, significantly higher than the 7 per cent rate in the UK, costing broadcasters €33.7m a year. Staff costs have risen €20m despite efforts to reduce head count, and the company has borrowings of €95m.

Paywalls have proven successful for this newspaper group, and The Irish Times, but will not work for local newspapers or broadcasters.

We cannot blame the tech giants solely for the demise of Irish journalism, but they do bear some responsibility. The near duopoly position Facebook and Google now hold in the advertising market has had a distorting impact on the ability of indigenous media to operate.

The two tech companies hoovered up and estimated 40 percent of the total ad market (worth about €1.4bn) and a whopping 81 per cent of the digital advertising market in 2019.

It is not realistic to expect that the Government could (or should) bail out the news media, given the perilous state of the public finances. But the news media do need support.

In that context, moves by the Australian government to introduce new laws to force Facebook, Google and other tech companies to pay royalties to the news media for content they produce may provide part of the answer.

Fair price

The move follows a proposal by the Australian Competition and Consumer Commission (ACCC), which would force the Silicon Valley monoliths to negotiate a ‘fair price’ with news media for using their content on their platforms. If they don’t, they could be forced to accept a binding arbitration.

The Commission has also proposed new rules to force both companies to be more transparent with their algorithm, give notice of changes that might impact on news organisations’ digital traffic, and be more transparent in their data collection methods.

In response, both Google and Facebook have said they would remove news content from their news feeds and search results rather than pay the royalties.

Such bully-boy tactics by the two tech giants reinforce how dominant their position in the market now is, and why it’s time to reign them in.

No media company can afford not to work with social media or Google. Media companies rely on these platforms to drive traffic, while the tech companies piggyback on the content created by the media companies to increase the amount of time audiences stay around, gathering terabytes of data about their behaviour and selling that to advertisers.

While the tech giants claim it’s a symbiotic relationship, the reality is that it’s closer to a parasitic one, such is the power imbalance between the tech giants and the media.

Along with Australia, France, Germany and Spain have tried to force tech platforms to pay for republishing news media content, but none have succeeded so far. Proposals for digital taxes have come to nought.

The new Programme for Government commits to a new Commission on the Future of Media, unifying regulation and support of media online and broadcasting, though no detail has been published yet explaining how it might operate, or what powers it will have.

To be effective, this new Commission will need to have substantial teeth to bring the Tech giants to heel and force them to take responsibility for the content on their platforms, including the power to issue substantial fines.

Ireland may be too small to do so on its own, it may take the political muscle of EU action to force Facebook and Google to the table.

The Commission will also need to look at wider issues, such as protecting privacy, the role of these platforms in the promotion of ‘fake news’, and how we should set limits on harmful content.

One shudders to think what will be left if Google and Facebook strip their newsfeeds of quality, trusted journalism. Cat videos will thrive for sure, but on a much more sinister level it will likely descend into a wasteland of fake news, half-truths and propaganda, where the tinfoil hat brigade, anti-vaxxers and anti-maskers will flourish.

We cannot leave our democracy to Mark Zuckerberg, it’s much too important for that.

Radical and immediate action is needed by Communications Minister Catherine Martin to ensure the survival of the news media in Ireland. So far, we have seen little to suggest she is preparing for the challenge.

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