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Media deals behind closed doors: public interest or private benefit?

Introduction by Croakey:  Much has been written about the infamous ‘defriending’ of Australia by Facebook on the eve of the Federal Government’s introduction of a media bargaining code between digital technology giants and Australian news outlets.

But much less is known or questioned about the mega deals that have now been put in place with media companies by Google and Facebook and what their value or costs are – to journalism and to democracy.

In this Public Interest Journalism Longread, Croakey journalist Linda Doherty draws on a history of public health battles with problematic industries to look at the issues arising for readers and voters from these private deals with Google and Facebook.


Linda Doherty writes:

The secret private deals struck in recent months by Google and Facebook with Australian media companies, estimated by the journalists’ union at up to $300 million a year, have been sealed behind closed doors with little or no transparency or accountability to readers and shareholders.

Even this figure of $300 million is mere speculation because neither the digital giants nor the people who bring us the news want the public to know.

Nine Entertainment outgoing chief executive Hugh Marks claimed the injection of funds from the digital giants “underpins the future of journalism” but there are serious concerns from journalists, unions, small publishers and health advocates about public interest journalism and the public’s right to information.

Alison Verhoeven, Chief Executive of the Australian Healthcare & Hospitals Association, said access to information is critical in a democratic society and has been particularly important in the past year – with bushfires and COVID-19 – “when we’ve all needed to be informed about the risks to our health and safety and our governments’ responses”.

“Yet at the same time, media companies and large digital corporations are entering into private unregulated deals about the way information is gathered and disseminated, how it will be paid for and controlled, with minimal intervention from governments and seemingly little consideration of public interest.”

Verhoeven and other public health leaders have long experience of how voices contrary to companies and lobby groups with significant market or political power can be ignored or silenced in the public domain and with governments.

“There are many examples, across tobacco, alcohol, and mining companies, to name a few,” she said.

The deals with the digital giants could also reduce media diversity by threatening the bottom line – and the online visibility of news content – of small national, regional and independent publishers who are not part of the secret deals.

Chris Warren, a former president of the Media, Entertainment and Arts Alliance (MEAA), said 90 percent of the cash will “line the pockets” of News Corp, Seven West Media and Nine.

“This free money will undermine media diversity by subsidising old media and by prioritising their content on the web,” he wrote in Crikey, also raising concerns about lack of transparency.

“Although old media have been happy to use their front pages to boost their campaign against the tech platforms, they’ve been surprisingly reticent about the final ‘commercial-in-confidence’ arrangements.”

What’s the big deal?

More than 70 Australian media titles and 500 worldwide have signed onto Google News Showcase, the licensing program the tech giant launched last month to curate and pay for news from media companies.

These include mastheads owned by News Corp, Nine, Seven, Australian Community Media and other titles like Guardian Australia, The Conversation, The Saturday Paper and Crikey.

Recent media reports suggest that Seven, Private Media and Solstice Media and Schwartz Media have brokered agreements with Facebook and others are expected to follow.

Croakey sought comment on the deals from Nine, Seven, News Corp, the ABC, The Guardian, The Conversation and Crikey. Only The Conversation, the ABC and Crikey responded.

ABC Head of Communications Nick Leys said the ABC was still negotiating with Google and Facebook but the corporation had said publicly that “any revenue generated from the code will be reinvested in rural and regional services”.

“Any deal will fall within the guidelines of our editorial policies and responsibilities as an independent broadcaster,” Leys told Croakey.

Misha Ketchell, Editor & Executive Director of the The Conversation in Australia and New Zealand, said his organisation had been as transparent as possible about its deal with Google within the constraints of the confidential agreement.

He told Croakey the three-year deal was enough to hire an additional journalist (with some on-costs) for The Conversation’s team of 25 full-time editors. The Conversation intends to expand its social media and audience team with the funding.

Crikey editor-in-chief Peter Fray said the deal with Google News Showcase is declared as a disclaimer on relevant articles in SmartCompany and Crikey, and a similar disclaimer will feature once the pending Facebook agreement is finalised.

The current disclaimer is: “The publisher of Crikey, Private Media, receives funds from Google’s News Showcase.”

“We intend to spend these extra funds on public interest journalism. This may include hiring more staff but also other ways to best serve subscribers and supporters,” Fray said.

Risks from the news bargaining code

Many of the deals with the media companies were struck before the Federal Government last year introduced the News Media and Digital Platforms Mandatory Bargaining Code Bill to force the digital giants to pay commercial compensation for the cost of media companies’ news content they host on their platforms.

Marcus Strom, MEAA president (media), said Facebook and Google earned more than $5 billion in digital advertising in Australia in 2018-2019 but paid just $117 million in tax.

“Meanwhile media companies have struggled to keep journalists employed and newsrooms open. In the past decade, almost 5,000 journalism jobs have disappeared in Australia,” he said in this statement.

“So not only have they grabbed the lion’s share of the digital advertising market, depriving media outlets of revenue to fund journalism, but they do not contribute to the costs of the news content that brings traffic to Facebook and Google in the first place.”

Strom said the media bargaining code was “no silver bullet” and the money “needs to be spent in newsrooms, not wasted in boardrooms”.

Facebook, in particular, has been singled out for its monopoly power arrogance when it unilaterally pulled all news content from its Australian pages – including important COVID-19 information from health authorities.

Strom noted Facebook was already under pressure for failing to stop the spread of misinformation – from former US president Donald Trump to COVID-19 conspiracy theorists – to its sites.

Dr Alex Wake, RMIT Journalism Programs Manager, said Facebook retaining the right to remove news articles at any time in the future was not just a problem for paid journalism.

“As we saw with the Facebook defriending, other groups were swept up in this, from groups with a clear health and safety mission (such as domestic violence support) to general community cohesion (neighbourhood and interest pages),” she told Croakey.

The new agreements also provide no brakes on Rupert Murdoch’s Sky News peddling conspiracy theories. Murdoch, according to international media expert Professor Jeff Jarvis, had spread his “Fox News-like poison to Australia with Sky News” and a recent Guardian analysis unravelled how Sky has made an art form of converting small audience numbers into a huge global reach via digital platforms like YouTube.

Transparency and accountability

The problem with the media bargaining “deals behind closed doors”, according to Dr Fiona Martin, Associate Professor in Convergent and Online Media at Sydney  University, is “we don’t actually know what the value of news is – publicly, we have no idea”.

“It’s important that the media companies declare the deals they’re doing with Google or Facebook, and that we are clear about the size of the return to the companies, because what we need to know is: are they spending it on journalism?” she said.

Transparency is the key to public trust, according to RMIT’s Alex Wake. “Organisations who have accepted funds from anyone – Facebook, Google, or even philanthropic organisations – should declare it. Even if it might seem benign, it should be declared.”

MEAA president Marcus Strom said the union was still waiting to see where all the deals land,“but we have made public statements calling for complete transparency”.

He said journalists at various outlets have started approaching management demanding to know the detail of the deals and how the money will be spent.

Strom said journalists at Nine, which includes former Fairfax mastheads The Sydney Morning Herald, The Age and The Australian Financial Review, last year agreed to a zero per cent pay rise in the first year of their enterprise agreement in recognition of the economic havoc posed by COVID-19.

Associate Professor Charles Livingstone from Monash University, a former MEAA president, said all arrangements with the tech giants should be transparent and fully disclosed, but he urged a different approach.

“The amounts charged of the new platforms should preferably be raised through a tax, administered by the Federal Government, and open to application from any media business that can make a good case against transparent guidelines,” he said.

“This should be independently administered and be primarily concerned with encouraging public interest journalism, not subsidising dividends or another season of I’m a Celebrity.”

Livingstone, now Head of Gambling and Social Determinants Unit in the School of Public Health and Preventive Medicine at Monash, has long seen the “opaque” relationships between the gambling industry and governments and regulators.

Very few details of commercial relationships are known, apart from “some modest detail about political donations”.

“In every such engagement, it appears that the gambling operator has the upper hand and is able to dictate terms to governments, as appears to have been the case with the ‘negotiations’ between Facebook, Google and the big media operators,” he said.

Jeff Jarvis, director of the Tow-Knight Center for Entrepreneurial Journalism at City University New York’s Graduate School of Journalism, an advocate of the Open Web and author of What Would Google Do?, is cynical the Australian deals will fund public interest journalism. He told Columbia Journalism Review:

It will not go to journalists. It will not improve news. It will go to the rapacious owners and hedge funds that control news companies.

In the end, regulation that tries to take power away from platforms inevitably gives them more. In Europe, under the Right to be Forgotten, Google decides what we may remember. In Germany, under NetzDG, Facebook decides what speech is illegal, outside a courtroom. Now in Australia, Google decides which news organizations should get money.”

Public health messages and campaigns are threatened by the further concentration of power in the media, according to Peter Miller, Professor of Violence Prevention and Addiction Studies at Deakin University.

“The big problem I have noticed with the media over the past five years has been the way in which they approach alcohol and the general reduction in reporting, critical thinking around alcohol industry agendas, and the lack of any sort of follow-up,” he said.

“At the same time there has been a huge increase in the proportion of alcohol advertising in the big commercial outlets. Increasingly, the only place to get stories run is in specialist media or the regional newspapers if you can make it a local issue.”

But these small publishers appear to be the big losers from the news bargaining code. “A further concentration of power in the media and reduction in smaller media and their ability to generate stories is of real concern,” Miller said.

Impact on small publishers

An important but under-reported issue is the power of the tech giants to control the visibility of online content on their platforms and the predicted dire impact on small publishers.

Journalism academic Fiona Martin said the media deals with Google Showcase favour large publishers and media groups over small, local and independent publishers and will force them to form consortia and “lawyer up” to negotiate settlements.

Martin is a founding member of Australian Community Managers, which looks after the interests of online communities, including community managers who run many Facebook groups.

“We are not entirely clear how these deals will affect the visibility of news content on these platforms. Will stories from Google News Showcase partners be ranked higher in search results than stories from small publishers?” Martin said.

Marcus Strom said the MEAA was pushing for a public policy redress from the Federal Government to put a proportion of the Google and Facebook payments into a public interest newsgathering fund – which already exists – where small publishers could apply to receive funding.

Conflict of interest

The ABC, which is used to “dealing with a hostile funding body” (the Federal Government), was the media organisation best placed, culturally, to deal with the inevitable conflict of interest issues that will arise, Strom said.

The former Fairfax titles in Nine are also well placed and, like the ABC, have a strong culture of independence.

“But definitely the conflict is there, because in three to five years’ time [the speculated length of the media deals] the media companies will be going back to Google and Facebook and saying, ‘Please can we have more?’” Strom says.

Outright editorial interference from owners or managers – to pull or go soft on news stories critical about the digital giants – can usually be dealt with under the journalists’ Code of Ethics but Strom said self-censorship is a “live and serious issue” because “knowing where your funding comes from can affect the way you report on issues if you don’t have a robust culture of independence”.

Public health researchers like Peter Miller already see this conflict of interest with advertisers of harmful products like alcohol, tobacco and fatty foods and media reporting.

“It’s often left to the media to actually report that conflict, and they ultimately get to put their own spin on,” Miller said.

Misha Ketchell said The Conversation already has checks and balances to ensure there is no conflict of interest, with its academic experts “free to write whatever they wish” and approve final versions of their articles.

“There is a guarantee of editorial independence and non-interference in our charter. We are very serious about this – any business relationships we may have will have no influence on our coverage,” he said.

Likewise, Peter Fray from Crikey said “we are mindful of conflicts of interest” and have a reporter dedicated to “exposing them in other fields”.

“Any conflicts will be managed by me, as editor-in-chief, and in consultation with other members of the management team,” Fray said.

How will these deals change the media landscape?

Most commentators say it’s too early to say how the digital giants’ deals with media companies will transform the Australian media landscape, mainly because the details of the agreements are shrouded by commercial in confidence restrictions.

But Jeff Jarvis looks to the US over the past four years and reflects on how the rise of the digital technology giants has seen a corresponding “fail” for journalism.

He cites the media lag in reporting on the #MeToo and #BlackLivesMatter movements, and said it must plead guilty to the fact “that the inequity in health in this country in the face of pandemic had not been known and dealt with”.

“I want to see us reinvent journalism around old needs and new opportunities,” he told Columbia Journalism Review.

“I want to see us collaborate with other fields and disciplines: anthropology to explain communities, neuroscience and psychology to explain cognition, ethics and philosophy to guide us, history and humanities to inform us.”

Disclaimer: Croakey Health Media has not been approached by Google or Facebook but plans to apply to be a registered news business under the News Media and Digital Platforms Mandatory Bargaining Code. See our relevant submissions.

Croakey acknowledges and thanks donors to our public interest journalism funding pool for supporting this article.

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