Happy Jan, not happy Jan

The Albanese government won early, broad support from the Australian publishing industry yesterday after announcing an overhaul of the globally recognised Morrison government era News Media Bargaining Code laws, designed to force platforms to contribute to the sustainability of journalism “and democracy”.

Underpinning both the Coalition and Labor taking on Big Tech is a decade of professional content media being outmuscled by the platform coders with lower cost user generated content and more pervasive tracking online of people, spinning off richer personal data for targeting that advertisers like. The social platforms, like sugar, alcohol, gambling and tobacco, are also massively popular with the people. 

But some, like Future Media’s Ricky Sutton, argue Canada has quickly displaced Australia’s global reputation as a market leader in its resolve and novel policy initiatives to contain the power of a few global tech players. A report from global media buying firm Magna this week said Google and Meta between them now control 60 per cent of the world's digital advertising supply outside of China. Sutton is also one who thinks the new policy will need Labor to be re-elected before it becomes law. “This isn’t a bank on it moment,” he said.  

Sutton isn’t alone. Other local publishers told Mi3 overnight the signals they were getting from Canberra was the legislation was unlikely to be passed before an election. “They’re putting through a raft of legislation, a lot of it not thought out,” one said. “There’s nothing different about this media bargaining incentive policy in that regard – there’s so much we don’t know. I’m not convinced they’re convinced they’ll get it through before the next election."

Probabilities and timelines aside, TikTok was an unsurprising addition in yesterday’s announcement by Labor that it had a new mechanism to force tech platforms to contribute to the professional content they carry from news publishers in Australia – the Morrison government era News Media Bargaining Code has been upgraded to what the Albanese government is calling a “Media Bargaining Incentive”, which uses the Australian Taxation Office as the enforcer for the platforms to pay up. 

In simplest terms – and there remains much ambiguity among publishers on this – platforms are likely to be set a dollar figure deemed due to local, eligible media companies which will be charged upfront by the ATO – what deals they then strike with publishers will be offset by a formula that incentivises them to strike these agreements or pay more via an ATO levy.  

“Digital platforms receive huge financial benefits from Australia, and they have a social and economic responsibility to contribute to Australians’ access to quality journalism,” Assistant Treasurer Stephen Jones told a media briefing yesterday. “This approach strengthens the existing code by addressing loopholes that could see platforms circumvent their responsibility to pay.”

Jones was referring in the first instance to Meta, which triggered Labor’s regulatory response yesterday after announcing earlier this year it would end its publisher payout obligations under the existing news media bargaining code by pulling news off its platform if it needed to. 

Publishers great and small

Digital Publishers Alliance chair Tim Duggan, who represents a collection of smaller, local publishing firms, said there were encouraging signals in yesterday’s planned platform crackdown that the previous bargaining code regime of payouts to publishers since 2021 – $600m to date, according to Labor – would be more evenly distributed beyond the large local news players. News Corp, Nine, Seven West Media and The Guardian Australia have taken most of the S200m in annual payouts.

“If this new policy can have its desired impact to bring large platforms back to the table to do a broad range of commercial deals with Australian publishers of all shapes and sizes, then that’s a great thing for the entire media industry,” Duggan said. “However, it’s now up to the digital platforms to play their part and negotiate in good faith with legacy and independent media, and for the government to ensure it happens in a timely fashion.”

At the opposite end, News Corp chairman Michael Miller was equally upbeat.

“This will provide a foundation for rebuilding the media industry after the loss of an estimated 1,000 jobs this year and ensuring Australian news media businesses will continue to deliver inquiring and professional journalism, which has never been more important to cohesive, democratic societies,” Miller said. 

"Following today's announcement I will be contacting Meta immediately to seek to restart the commercial relationship with News Corp Australia that it walked away from earlier this year. I will also be making contact with TikTok with the intention of reaching a commercial agreement with them as well."

News Corp’s negotiations with TikTok will be interesting – it has piled into TikTok with vertical video content. “I think we're doing 75 million views on videos in TikTok for news.com.au so we know our right to play,” Paul Blackburn, director of Commercial Data, Video and Product told Mi3

LinkedIn, Bing ping?

And it’s not just a knock on TikTok. Under Labor’s new policy, a $250m Australian revenue threshold for tech platforms carrying local publisher content looks set to draw in Microsoft-owned Bing and LinkedIn, taking the fight for the first time beyond Google and Meta. If Labor’s net does capture more offshore tech players, it’s will likely expand the revenue pool from more platforms to more publishers. 

LinkedIn’s ANZ Managing Director, Matt Tindale, a one-time sales director for local media companies including Southern Cross Austereo, is said to be across LinkedIn’s possible inclusion in the upgraded media bargaining laws but a LinkedIn spokesperson last night told Mi3 the company “was not in a position to respond right now”. 

Public policy and government affairs teams at LinkedIn and its parent Microsoft – which paid $26 billion for the professional social networking platform in 2016 – are understood to be active with Canberra. Some observers said the Labor government had its sights on Microsoft’s Bing and Linkedin although untangling the structure and numbers to substantiate the new $250m Australian revenue threshold was proving a challenge.

Although Google dominates the circa $5bn Australian search market, Gary Nissim, CEO of Nunn Media’s digital marketing agency The Alley Group, which spends $100m on paid search advertising annually for its client portfolio, estimated Microsoft’s Bing was likely generating upwards of $250m in search revenues here. “Bing has about 4-5 per cent of paid search here – that would put them in the frame for this $250m threshold,” he told Mi3. 

Nissim noted the rising share of search queries going to the AI engines like ChatGPT and a handful of others being backed by billions of dollars from bullish investors. It would mean Media Bargaining Incentive laws could ultimately extend to the cashed-up and rapidly emerging generative AI platforms. 

For Microsoft-owned LinkedIn, which has global revenues upwards of $16bn and an Australian user base of 16 million, the company is split into four key revenue units – multiple conversations yesterday with tech and advertising market operatives estimate Linkedin’s Australian revenues as follows:

• LinkedIn Marketing Solutions (LMS) $80-$100m
• LinkedIn Talent Solutions (LTS) $100-$130m-plus
• LinkedIn Sales Solutions (LSS) $20-30m
• Premium Subscriptions – $1bn revenue business globally but Australian figure unknown 

Canada the new brave Australia

Ricky Sutton, who advises publishers globally and is a vocal critic of Google and Meta’s “deliberate crushing” of publisher businesses around the world, said Canada had usurped Australia in regulatory innovation against tech platforms. 

“It's way ahead of Australia in enacting policies to bring Google and Meta into line with the historical norms of business, democracy and law,” he said. 

“Publishers there have banded together to sue Google (and Meta too if an appeal succeeds) in a class action seeking CAN$4 to $8 billion in damages for advertising losses over 10 years due to the platforms' anti-competitive practices,” he said. “In a fortnight, Google is due to handover CAN$100 million to compensate publishers for content it uses. Google agreed to the payout to kill a law based on Australia's bargaining code. Meta refused and has deleted news pages and banned news links ever since.”

And last week Sutton pointed to the Canadian competition bureau which has “jumped on Google's antitrust convictions in the US” demanding it sells its ad server and its AdX programmatic exchange for publishers, which it said hurt publishers when they used it “200 billion times a month”. It is seeking multi-billion-dollar damages or will fine Google 3 per cent of its global revenue” – equivalent to US$9.2 billion.

“Canada's publishers haven't been sleeping either,” Sutton said. They have joined forces to sue OpenAI for illegally crawling their content. Five major publishers, the newswire and the national broadcaster filed a joint 84-page suit demanding CAN$20,000 per article, and a share of OpenAI's profits, potentially worth another CAN$10 billion.

“We are weeks away from knowing Google's fate after it lost two antitrust cases in the US, and it's looking shaky on a third,” Sutton said. “The DoJ (US Department of Justice) has demanded an unprecedented break-up that would rewrite the economics of the web. Meta will find itself facing its own antitrust case next year.

“It's inexplicable to me why Australia would do this now with game changing events overseas still to play out. Unless of course this has nothing to do with publishing or justice but politics.”