So Murdoch's empire gets propped up to the tune of over $300 million per year and needs nothing in exchange except keep sending traffic to his sites.
Bad news for Australia for starters, but don't think Murdoch will be content just with drinking our blood. He's coming for USA and UK too, and now he has a tested playbook for getting Facebook & Friends on the leash.
The fact it's bipartisan proves both sides sell you out every time, similar to Labor giving a full-throated endorsement to the encryption ban as well as metadata retention.
You divided $1 billion by 3 years to come up with $300 million per year?
This has been a political campaign featuring truck loads of bluff and bullshit from the very start. Google's threat to "ban search in Australia" was the highlight for me. So they were going to disable the "Hay Google, navigate to ..." feature of Android phones, since as we all know that that uses search. Yeah right, pull the other one, it plays jingle bells.
If I was Facebook I want want to take the "Facebook steals news" heat off me using the punchy'ist headline I can justify, using I'd be scrounging every dollar we pay every news organisation over the entire planet, including advertising.
He is coming for USA?? This is like 10 years old news. He is destroying American at least since the first Obama term. Just turn at any time see the hate they spew. You have to be blind or brainwashed by FN not to see these people agenda is to divide America from within.
I hear you, and I understand a lot of people in USA have had concerns about Murdoch for a long time. What I particularly have in mind though is that this whole Facebook thing seems like it was Murdoch trying out a new playbook for bringing big tech to heel.
And the first round of testing has been a resounding success from the Murdoch point of view.
I don't think the comment you're replying to was talking about a political agenda, but rather, replicating the financial rewards they received in Australia: "The announcement comes days after the tech giant struck a deal with Australian lawmakers to pay local publishers for their news content"
I had in mind that the political power and monetary kickbacks go hand-in-hand. Yes, it is probably widely acknowledged across USA that Murdoch wants more political power over there. But what we've seen here is what he does when he gets that power. It doesn't sit idle.
He has demonstrated that with his political power in Australia, he can make Facebook bend the knee within Australia. And once he has completed his control over USA politics, he'll make the big tech companies bend the knee over there too.
A billion dollars changing hand is just cosmetic to these guys. What has been displayed is a flex of power.
> But what we've seen here is what he does when he gets that power. It doesn't sit idle.
Of course not. He's malicious, not stupid. Unused power is pointless. He'd have to be an utter moron to waste enormous amounts of money and effort and then do nothing with the results. He wants a return on that investment. Of course he's going to try to get more money by using his power.
I don’t like Facebook, and I think the way it abuses its position is awful, but I don’t understand the position of the news industry or the judiciary supporting the industry.
If I were to stand on a corner and tell people what was on the menu and the daily special of a cafe down the block, I cannot think of a situation where that cafe would think they were owed money for my doing this.
I understand that Facebook and Google have a powerful market position, but I don’t see that as part of the argument.
There are a bunch of stores in your area that offer free samples. You open your own store where people can tell you what stores they like, you go and grab the free sample, and then give the sample out at your store for free in exchange for there person's email and phone number and filing out a survey on which samples they like. Then you tell them where the sample came from and also sell their name and number and preferences to advertisers, some of whom are the stores you're getting samples from. Really hungry people will go to the store and pay for more, everyone else will be happy with the samples you gave them and walk away, maybe telling their friends how good it was. Your store gets hugely popular and has way more visitors every day than any of the local stores.
Now the government comes in and tells you that you have to pay for your samples, but regular people can still go to those stores and get their free samples.
But see, this is why I think Facebook was right here. If the stores really didn't want you doing this, they could just not give you a free sample. I'm not sure why the government needs to step in here at all. If you're providing a benefit to the other stores (more foot traffic) than why should they get paid? And if the traffic you are providing isn't good, why should they let you get the free samples?
> But see, this is why I think Facebook was right here. If the stores really didn't want you doing this, they could just not give you a free sample. I'm not sure why the government needs to step in here at all. If you're providing a benefit to the other stores (more foot traffic) than why should they get paid? And if the traffic you are providing isn't good, why should they let you get the free samples
Because it's neither here nor there. The traffic that trickles down to news sites is minimal because for a lot of people the title, photo and description are enough, but it's still more than the nothing they'd get if they block Google/Facebook indexing, because most people use the latter for news.
This analogy doesn't work because information is not a limited commodity. Once you've "printed" the news, its value drops to 0. This isn't the old days where you had to physically print 1,000,000 papers if you wanted the message to get to 1,000,000 people. You can "print" the news once now, and EVERYONE can see it.
Collaborating with the free sample store gets them more business than if they don't and others do, but less than if no one did. So "If the stores really didn't want you doing this, they could just not give you a free sample" doesn't really work.
Maybe it is kind of like those people that hand out free samples at Costco, they are contracted by the product vendor, but some people think Costco should be paying for all those free samples because those samples draw traffic to their store.
I think there are 3 reasons I can think of why newspapers are demanding more from FB/Google:
1) Ad-spend has gone digital and especially local newspapers have had a hard time transitioning. FB/Google have captured the growth here over the past decade or so.
2) Changes in the FB news feed has large affects on their traffic, something which they have no control over.
3) They can't build a subscriber-only moat if they have to give away stories for people to click through on sites like FB.
I think number 3 can be worked around with summaries, or offering limited full story views/month, and number 2 is unfortunate, but better content will win out and help with number 3 as well.
Number 1 is where they have the strongest case to want a profit sharing agreement, and that's what FB/Google are basically doing. Whether this will help those organizations that actually need help is to be seen. I hope it does, especially local newspapers. If stories like these are true, then $1 billion is only 1/5th of the captured value: https://www.nytimes.com/2019/06/09/business/media/google-new...
Your analogy needs to be reworked a bit. Information about what’s in the menu doesn’t solve the hunger problem. Headlines or summaries can solve peoples information problem. Your analogy works slightly better for Yelp actually. Apparently the restaurant industry is upset about it but I’m not familiar enough with the issue to know why
... and mainstream news will never publish anything negative about Facebook ever again. In fact, they will encourage readers to catch their news "on Facebook posts."
So much for free press and the final check on power [1]. Let's have an eulogy, the Fourth Estate is now officially dead.
This is a very (bad) political strategy, well played by Murdoch. To get some insight, read Bob Iger's (Disney ex-CEO) book. He explains how Murdoch was worried about the rising tech-giants, how news is losing edge and his decision to sell to Disney.
The sale to Disney happened as a direct result of Murdoch seeing the threat (i.e people moving away from news).
Unfortunately for Australia, they cover over 50% of media, and can get the Government to do what they want.
To know more about the logical side, see the ex-Prime Minister's Senate hearing. This had the most amount of signatures in the history of Australia, yet, unfortunately, it'll not reach anywhere.
If it's 1B /3yr for just News in Australia this is going to set a bad precedent with other countries going to want to rush legislation through and come knocking for a share of FB's profit.
Although I can see why they've folded, starting to see a trend where my FB friends are posting more infrequently so FB needs to something to fill up content to keep people's feeds current and them a reason to return.
Would've thought it would be cheaper for them to fund their own "News organization" reporting news from outside of Australia, which if successful I'd expect to would dissuade other countries from following suit.
It's telling that the response to pulling all content from news sites wasn't "This is a fair outcome since we're accusing Facebook of profiting from our content in a one-sided fashion."
It's pretty obvious that the news publishers are desperately dependent of facebook traffic, so this move was a breathtaking act of chutzpah on their part. Facebook wasn't harmed in the slightest by losing news publishers content, but they were facing doom. It was amusing that this was painted as censorship, as if somehow facebook took them off the internet entirely.
I'm not even a fan of Facebook, but they were in a fight with even worse people so it was with a lot of reservations that I was rooting for them in this fight. I would've preferred to see Facebook route around the major publishers entirely and just give grants and promotion directly to smaller independent news publishers.
Companies are motivated by profit. Therefore it is in our best interest for news companies to have a business model such that they profit off of producing quality news coverage. The current market clearly is not doing a good job of rewarding news companies for quality coverage... but I'm worried this might make it worse. Has Facebook published any information indicating how they plan to distribute that $1B?
As an American I'm standing in a glass house when I ask this question but how does an Australian end up voting for these politicians? How do they get elected? There have been a couple of baffling laws that have passed and I'm wondering if Australians by and large are ok with them.
The party is elected, and then they can change the prime minister at will. The two major parties are almost exactly the same: they both vote to pass the worst laws like anything under the national security umbrella. There is no real constitution like USA has. The people are much less engaged with politics, will never do serious protests and care much less about their rights and freedoms.
Like USA, Australia's politics are dominated by two major parties most people feel compelled to vote for, and even if you do vote for some independent third party, our preferential voting system ends in your votes going towards one of the two major parties when the independent you actually voted for gets "knocked out" anyway. The two major parties nominate whoever they like to lead them, generally their candidates are whoever will obediently follow the party line and be a good patsy.
So similarly to the USA, every election cycle is a meaningless facade where we pretend we still live in a democracy and that we have any control at all over who our "elected" leaders are. I'm sure the majority of Americans don't want Biden as their leader, but they're stuck with him because ultimately the two major parties gave the voters two bad choices. Oh you wanted a national leader who wasn't an out-of-touch old white man beholden to the desires of his lobbyist benefactors? Well bad luck, because your only two choices are out-of-touch old white men beholden to the desires of their lobbyist benefactors.
In fairness to the USA, Biden was selected via the primary system. In fact voters very much did want 'out of touch old white men'. If the Democratic party had been able to simply pick the leader themselves it would be black women from here on out forever - see how Hillary ended up being nominated and losing to Trump for a taste of what the primary system usually manages to avoid.
Urgh, great. So Facebook presumably think this won't spread to other places, but now they folded it will.
So the news industry is going to fix the problem of falling trust and falling revenues by becoming subsidy junkies extracting wealth from tech firms. And this works because apparently politicians fear the press's ability to distort and manipulate the voter base so much that they can get whatever they want, which means that in practice both tech firms and politicians are controlled by the press, who are in turn accountable to nobody - not even anymore the market of their readers. The reputation of journalists will get much worse before it gets better (if it ever does).
Lots of news organizations voluntarily re-post their content on their Facebook news channel, so FB were hosting it as well, although it's currently been disabled due to this law.
So a failing industry gets propped up because governments want it to happen and media aggregator sites have to pay companies for making their content available and expanding their audience.
I thought Facebook's original argument was that they only provided links to news, but this deal makes me think that Facebook are hosting some content as well?
Nitpick: It would be more correct to say that FB collects GST for the Australian Tax Office. In an accounting sense only consumers actually pay GST.
Also worth pointing out that FB’s tax bill in Australia is pretty minimal (rightly or wrongly). The tax on these payments could easily end up being worth more than Facebook’s tax bill in Australia.
Actually if you think of these measures as a creative way around US strong arming on a digital services tax they make a lot more sense despite the legislation itself being a weird mess.
How much do you think a headline is actually worth? The vast majority of viewers didn't chose or even want to see it. It was automatically pushed on them and they would normally have paid $0 without facebook
The Australian Competition and Consumer Commission recommended that something be done in relation to the concentration of digital market power, and the impacts to Australia's news media:
"The 2019 University of Canberra Digital News Report found that that 33 per cent of Australian consumers report accessing news through social media, with 25 per cent using search engines to search for news brands and 20 per cent using search engines to search for particular news stories.
Google is a critical source of internet traffic (and therefore audiences) for news media businesses. A news media business risks losing a significant source of revenue if it prevents Google from providing links to its websites in search results. While Facebook contributes a significantly lower proportion of traffic to news media businesses, it remains a vital distribution channel for a number of media businesses, particularly those seeking to target a particular demographic group.
The content produced by news media businesses is also important to digital platforms. For example, between 8 and 14 per cent of Google search results trigger a “Top Stories” result, which typically includes reports from news media websites including niche publications or blogs.
While the digital platforms clearly value the news media content that they are able to display to their users, Google and Facebook each appear to be more important to the major news media businesses than any one news media business is to Google or Facebook. As set out above, this provides each of Google and Facebook with substantial bargaining power in relation to many news media businesses.
The reliance by news media businesses on traffic from Google and, to a lesser extent, on traffic from Facebook also means the digital platforms and their business models have a significant effect on news media businesses. Particular concerns raised during the course of the Inquiry include:
* the lack of warning provided by digital platforms to news media businesses of changes to key algorithms relating to the display of news content or news referral links
* the implementation of policies and formats that may have a significant and adverse impact on the ability of news media businesses to monetise their content and/or to build or sustain a brand and therefore an audience
* the impact of such policies on the incentives for news and journalistic content creation, particularly where significant effort is expended to research and produce original content.
A key concern relates to Google’s use of news media businesses’ content in snippets, the short summaries or extracts of text that accompany links to a news story and are displayed when a consumer searches for a news story. A similar concern exists in relation to the posts of news stories that appear in a user’s Facebook News Feed.
The ACCC recognises that news media businesses, digital platforms, and importantly, consumers benefit from the reproduction of news content in snippets.
Media businesses benefit because a snippet provides context and an indication to the user of the value of that content, increasing the likelihood of consumers clicking through than if no snippet were provided (although this may depend on the length of the snippet). Consumers value snippets for a related reason, as the context enables them to make an informed choice of which article to click on. While Google does not generally sell advertising opportunities next to search queries that are considered by Google as having a ‘news intent’, Google benefits because the inclusion of news stories and snippets in search results increases the attractiveness of the Google search engine.
This in turn increases the likelihood that consumers will use the search engine for other queries, which can be directly monetised. Facebook benefits because news stories appearing on a user’s news feed retain the user’s attention, enabling more advertisements to be displayed. However, the inability of news media businesses to individually negotiate terms over the use of their content by digital platforms is likely indicative of the imbalance in bargaining power. Individual news media businesses require Google and Facebook referrals more than each platform requires an individual media business’s content."
The ACCC recommended:
"Given the imbalance in the relationships between the leading digital platforms and Australian news media businesses, the ACCC recommends that designated digital platforms should each separately be required to provide a code of conduct to the Australian Communications and Media Authority (the ACMA) to govern their commercial relationships with news media businesses. The ACMA would be responsible for designating which digital platforms should be required to implement a code. The development of each code should be informed by a consultation process with news media businesses and contain a strong enforcement mechanism. The ACMA would closely consult with the ACCC in performing its role under this recommendation.
Breaches of the code would be dealt with by the ACMA, which should be vested with appropriate investigative and information gathering powers and the capacity to impose sufficiently large sanctions for breaches to act as an effective deterrent.
The ACCC considers that if a digital platform is unable to submit an acceptable code to the ACMA within nine months of designation, the ACMA should create a mandatory standard to apply to the designated digital platform"
As I understand it, none of the tech giants played ball, so the Government drafted legislation to force the issue.
It sure is a lot of money for their spin machines. Making it even easier to drown out the independents who, if I understood it when I looked into it earlier, aren't getting a cent [in Australia at least].
Adds another bar to independent startups.
Have to have revenue of minimum $150K before they can be considered as a news outlet.
Just more consolidation, disgrace.
So Facebook's revenues are approx $80b, and they're going to pay $1b over 3 years, for all of the real news content they rely on to drive traffic on their platform.
0.4% of revenue sounds way too cheap for that. If FB lost legitimate content, they'd have to make do with just their bubble-fuelling crackpot user-generated fake news, and that would surely drive away many of the less rabid FB users. They need legitimate news, badly.
Bad news for Australia for starters, but don't think Murdoch will be content just with drinking our blood. He's coming for USA and UK too, and now he has a tested playbook for getting Facebook & Friends on the leash.