Pacific Media Watch newsdesk

Nine Entertainment and News Corporation are wrong to say Google and Facebook have destroyed their business models by stealing content, according to news publisher Eric Beecher, reports The New Daily.

Giving evidence before the Australian Senate hearing on the government’s proposed media bargaining code on Monday, Beecher said representatives from Nine, News Corp and The Guardian had wrongly accused Facebook and Google during previous hearings of “stealing both their content and their advertising revenue”.

Beecher, the chairman of Solstice Media and owner of Private Media, publisher of the independent Crikey!, said the multibillion-dollar organisations clearly gained more than they lost from sharing their journalism on Facebook and Google, writes Euan Black in his New Daily report.

• READ MORE: The Conversation’s submission to the Australian Senate media code inquiry
• Nine’s statement to the media bargaining code inquiry
• The proposed Australian media bargaining code

“Those media companies actively provide snippets or their full journalism to the platforms for one blindingly obvious reason: They gain huge benefit from the exposure – and clicks – their content attracts on Google and Facebook,” he told the senate committee.

“If they didn’t, they wouldn’t allow it to be ‘stolen’.”

Beecher, who also chairs Motion Publishing, publisher of The New Daily, disputed claims that the internet giants had siphoned off advertising revenue from the news organisations.

He said that before Google and Facebook most of this revenue came from newspaper classifieds that have since moved online.

Money ‘ended up in pockets’
Beecher said this money had “ended up in the pockets” of realestate.com.au (owned by News Corp), Domain (owned by Nine) and other classified advertising websites like Seek and Carsales.

“As has been meticulously researched, the vast bulk of Google and Facebook’s advertising revenue has not come from news publishers,” he told the hearing.

In an earlier submission to the senate inquiry, Facebook said it had generated 4.7 billion referrals to Australian media publishers and shared A$5.4 million in revenue with them between January and November.

It also claimed “the commercial value we derive from news content in Australia is virtually zero”, while Google has threatened to remove its search engine from Australia if the current version of the code is passed into law.

Despite disagreeing with key arguments used to defend the media bargaining code, Beecher said the internet giants were “almost certainly too powerful” and should be legally required to “pay full Australian tax on all their Australian profits that stem from all their Australian revenue”.

“I’m not here to defend Google and Facebook,” he said.

‘Their behaviour is scary’
“Their market dominance and the information they collect about their users’ online behaviour is scary.”

Beecher said the huge market share and tax minimisation strategies of the internet giants provided enough justification to ask them to pay a “social licence” fee to support public interest journalism.

“For those reasons — not because of spurious arguments about stealing content and advertising revenue — I believe they should pay what is, in effect, a social licence to support the public interest journalism that has been severely affected by the invention of the commercial internet, which Google and Facebook dominate,” he said.

Senator Sarah Hanson-Young, who is the Greens’ media spokesperson and sits on the committee tasked with interrogating the proposed new laws, also called for the code to explicitly support public interest journalism.

She said in a statement that the Greens would seek amendments to the bill that:

• “Require news organisations to spend the revenue from the Code on resourcing public interest journalism, and
• “Require the 12-month review of the Code to report on the impact that the Code is having on small, independent and start up publications.”

When Bauer Media announced the closure of its New Zealand magazine operation just a week into level 4 lockdown in early April, things looked ominous for local media. Revenues and newsrooms were already contracting. It was hard to see things improving.

However, while the full picture is still unclear, it seems most of New Zealand’s TV, radio and print outlets have come through the covid-19 crisis bruised and battered — but alive. Sadly, an estimated 637 media jobs have disappeared in the process.

In short, 2020 has left the New Zealand media market profoundly restructured.

• READ MORE: The sociology of a pandemic: Countering a COVID ‘disinfodemic’ with a campus media initiative – Pacific Journalism Review
• Weathering the covid-19 media storm in NZ

Perhaps most significantly, as the 10th New Zealand Media Ownership Report shows, there are now more independent news outlets in the market than at any time in the past decade.

That trend was underscored by Australian Nine Entertainment selling (for NZ$1) its New Zealand subsidiary Stuff to CEO Sinead Boucher. The sale returned the country’s largest digital news platform and 12 national and regional newspapers to local ownership.

The magazine massacre
Many of these structural changes in the country’s media might have happened anyway, but the pandemic certainly accelerated some decisions.

A case in point was Bauer. The company blamed its closure on “the severe economic impact of covid-19”, but it had been facing declining advertising revenue well before the pandemic hit. This was made worse when magazines were not included among essential goods and services during the lockdown in March and April.

Bauer also closed titles in Australia, but in June the company’s Australasian magazines were sold to Australian private equity group Mercury Capital. The new owner resumed publication of Woman’s Day, New Zealand Woman’s Weekly, Australian Women’s Weekly NZ, Your Home & Garden, NZ Listener and Kia Ora.

Later, flagship current affairs titles North & South and Metro were sold to independent publishers and relaunched in November.

#BREAKING Bauer Media is set to close —the publisher of the Listener, Woman’s Day, NZ Woman’s Weekly, North & South is closing its doors permanently.https://t.co/wxDykUxLB5

— nzherald (@nzherald) April 1, 2020

A government lifeline
You might say the country’s media survived the pandemic with a little help from friends — and even frenemies: the government, readers and Google.

In April, the government announced a $50 million media crisis support package — the lion’s share went to broadcasting.

• READ MORE: Funding public interest journalism requires creative solutions. A tax rebate for news media could work
  
• Courting the chameleon: how the US election reveals Rupert Murdoch’s political colours
• Misinformation on social media fuels vaccine hesitancy: a global study shows the link
  

But most of the country’s news outlets received support from the government’s wage subsidy scheme, including NZ Media and Entertainment (NZME) and Stuff, the two largest print and online news publishers.

Without that government support it’s clear many news outlets would have been more severely affected. The NZ Herald received $8.6 million in wage subsidy and Stuff $6.2 million. State-owned broadcaster TVNZ received $5.9 million and the private equity-owned MediaWorks $3.6 million.

The scheme also kept many smaller digital news outlets afloat, and some even expanded.

The Google factor
Some news outlets received additional funding from Google’s Journalism Emergency Relief Fund — slightly ironic, given the impact of the digital giant on traditional media advertising revenues (hence the “frenemy” tag).

A total of 76 news organisations across the Pacific benefited from Google’s “short-term relief”. While smaller publishers welcomed it, the money spent per outlet was unlikely to make any serious dent in Google’s budget — it was more a gesture of goodwill.

For example, Queenstown-based non-profit media outlet Crux received $5000. To put that in context, in the first half of 2020 search engines — mainly Google — received $361 million in digital advertising revenue in New Zealand, along with the social media platforms gobbling up 72 percent of the country’s total digital advertising spend.

For its part, Google says it has done more for the country’s journalism than providing financial aid, and has “trained almost 600 journalists in dozens of newsrooms across the country”.

Higher traffic and increased donations
News companies also got by with a little help from their readers during the pandemic. The NZ Herald reported “overall print-digital readership […] at record levels and newspaper readership [at] its highest in almost a decade”.

Independent digital news outlets Newsroom and The Spinoff also reported spikes in readership and donations or subscriptions. Web analytics confirm overall news site traffic increased quite substantially during the pandemic.

According to data analysts SimilarWeb, total visits to the NZ Herald website grew from 36.5 million in May to 46.4 million in August. Similarly, total visits to the Stuff site went from 39.7 million in May to 43 million in August, while The Spinoff grew from 2.4 million in May to 2.9 million in July.

These positive developments were offset by plenty of negatives, however. Many commercial newsrooms shrank substantially, with hundreds of jobs lost. The full effects of the pandemic will not be known for some time, and what the industry will look like in 12 months is hard to predict.

What is clear, though, is that more government support will be needed in the coming years if New Zealand wants a healthy media system as part of its democracy.

Dr Merja Myllylahti is co-director of JMAD Research Centre, Auckland University of Technology. This article is republished from The Conversation under a Creative Commons licence. Read the original article.

A High Court judgment has revealed that an entity other than New Zealand Herald owner NZME is interested in buying the country’s biggest news publisher Stuff – and a deal could be done by the end of this month.

Stuff’s owner – Nine Entertainment in Australia – abandoned its negotiations with NZME after getting another offer from a prospective buyer, the judgment from Justice Sarah Katz revealed this week.

But the identity of the prospective owner is still under wraps.

READ MORE: A NZ without journalists: The implications of the combustion of our biggest news groups – James Hollings

NZME went to court last week seeking an injunction to prevent Nine Entertainment bargaining with any other buyer. It argued Stuff’s owner had breached the 14-day exclusive negotiation agreement it entered into with NZME on April 23.

Earlier it had announced it wanted to buy Stuff for $1 and asked the government to pass legislation expediting the deal, allowing it to skirt the need for Commerce Commission approval.

Nine Entertainment insisted no such deal had been agreed and negotiations with NZME were already over.

In court, Nine Entertainment’s lawyer accused NZME of damaging Stuff with its actions.

Commerce Commission permission not needed
Nine Entertainment said the alternative offer wouldn’t require permission from the Commerce Commission. It is now planning to complete the sale with the prospective third-party buyer on May 31.

So far NBR owner Todd Scott – who recently completed a buyout of the publication which began in 2012 – is the only person to publicly express interest in buying the business.

“We are very serious about taking over the liabilities of Stuff NZ,” he said in an online post earlier this month.

He said the Commerce Commission, the Minister of Broadcasting and the opposition Broadcasting spokesperson had been informed of his plan.

On Wedesday, he described Nine’s move as “logical” on Twitter and shared a link to an under-construction website combining the names of two Stuff newspapers – DominionPress.co.nz

Scott has named Australian private equity firm Anacacia Capital as a backer. Last week the firm refused to confirm to RNZ if it had an interest in a deal for Stuff.

In the judgment outlining her reason for declining NZME’s application for an injunction against Nine Entertainment, Justice Sarah Katz said on the face of it, there was a legitimate argument that Nine Entertainment breached the conditions of its exclusive negotiations period with NZME.

Unlikely Nine would accept NZME offer
But she concluded that the potential cost to Nine Entertainment of forcing it back into exclusive negotiations outweighed the price NZME would have to pay if she refused an injunction.

It was unlikely Nine Entertainment would accept NZME’s offer even if she forced it back to the bargaining table, because it didn’t want to accept a deal that would require Commerce Commission approval. Katz pointed to the fact that the government had already signaled it wouldn’t pass special legislation to allow the NZME-Stuff merger.

Meanwhile, Nine Entertainment’s separate deal with a third party might fall through if it had to resume negotiations with NZME, the decision said. Justice Katz noted that would also essentially force Nine to open its books to a competitor, despite having no intention of selling Stuff to that business.

• This article is republished by the Pacific Media Centre under a partnership agreement with RNZ.
• If you have symptoms of the coronavirus, call the NZ Covid-19 Healthline on 0800 358 5453 (+64 9 358 5453 for international SIMs) or call your GP – don’t show up at a medical centre.
• Follow RNZ’s coronavirus newsfeed
• The new DominionPress newspaper website “under construction