The Government has been hoping the social media giants will come to the table and start paying local media for news content without the threat of a law change. But progress is excruciatingly slow.

Has the Government just been outplayed by Google’s hardball?

The year started with the Broadcasting and Media Minister saying he had received assurances from Google that the big tech giant is seeking commercial deals with local news outlets to pay for the news content it hoovers up.

A softly-softly approach was embraced by the Government to avoid an acrimonious stoush with the big social media companies like that seen in Australia.  Kris Faafoi is fully aware that local journalism needs additional revenue, but he has hesitated to pull out the big stick.

What do you think? Click here to comment.

Yet those commercial deals haven’t eventuated. And events in other countries are beginning to suggest Google is simply stalling.

Google is a content aggregator. Simply put, it gets to use content produced by New Zealand news outlets for free when it aggregates the material on its search engine and Google News.

Around the globe, many governments have tried to get Google to pay local media businesses for content use.  They want their own domestic media to survive the imbalance of the global social media giants suctioning clicks, eyeballs and revenue while local news outlets bear the cost of news gathering.

“Google’s negotiations with press publishers and agencies cannot be regarded as having been conducted in good faith.”
– Isabelle de Silva, Autorité de la Concurrence

There’s a lesson to be learnt in France. In recent weeks the French government fined Google 500 million Euro for not making payments to French news outlets for content used.

France was the first European country to roll out a law designed to get payment for French produced news content accessed through Google search engines.

And, the whopping fine comes after what appears to have been a path of most resistance by Google in the face of deadlines to comply with the regulation, and a subsequent legal injunctions by the French authorities.

Isabelle de Silva, president of France’s Autorité de la Concurrence, said Google’s negotiations with publishers and press agencies “cannot be regarded as having been conducted in good faith”.

The regulator also said Google’s negotiation strategy had appeared to be “aimed at avoiding or limiting as much as possible payment of remuneration to publishers”.

It also criticised Google for forcing discussions to be imposed within the framework of its publisher-curated news partnership, which includes its Google News Showcase service.

Google announced it would pay $1 billion to news publishers around the world over the next three years to package their content in panels under the Google News Showcase, which has been rolled out in about a dozen countries around the world, and recently in NZ.

So it’s easy to be suspicious the approach being adopted by Google in New Zealand is an echo of the same tactic elsewhere.  

“I reiterated to the social media platforms we would like some speed in those conversations about getting commercial arrangements that they may come to…. with some idea on how long it would take before they would be able to assist our local media companies.”
– Kris Faafoi

New Zealand media companies are left wondering if our government and its policymakers are naïve or overly timid.

Broadcasting and Media Minister Kris Faafoi met with Google and Facebook executives, as early as February of this year.

“I reiterated to the social media platforms we would like some speed in those conversations about getting commercial arrangements that they may come to…. with some idea on how long it would take before they would be able to assist our local media companies,” said Faafoi at the time.

Six months later and there’s no evidence of speed wobbles.

It’s not like there’s a shortage of cash for the internet giants.

According to the latest quarterly results, total Google advertising revenue increased to $50.44 billion, up 69 percent from the same quarter a year ago.

Google also owns YouTube and its revenue came in over $7b, up 83 percent from last year, drawing close to rival Netflix’s quarterly revenue, which was $7.34b.

In New Zealand the way we get our news and other content is undergoing a generational change. We are currently on the crossroad of where the online platforms overtake our traditional media platforms for audience.  YouTube has now surpassed TVNZ 1 as the most viewed channel. Google is the most clicked search engine.

Newspaper advertising has plummeted. Half of New Zealand’s advertising spend of $2.4b in 2020 was on digital media. And Google and Facebook soak up most of the digital advertising in New Zealand. 

So while the digital revolution offers an overwhelming amount of content, the economics of producing news and current affairs in New Zealand remain precarious.

The government is circling its wagons around public media by planning to creating a new, combined TVNZ and RNZ entity, and is pumping $55 million into commercial media to fund public interest journalism.

But a big elephant remains in the room – called Google.

Stephen Parker is a former political editor for TV3. More recently he was the Chief Media Adviser at MFAT, and also worked in the Foreign Minister's office of both National and Labour-led governments.

Leave a comment