Toby Manhire is a Wellington-bred, Auckland-based journalist.

Toby Manhire: Media shivering in Facebook's shadow

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The internet has shaken just about everything: commerce, politics, entertainment. Photo / AP
The internet has shaken just about everything: commerce, politics, entertainment. Photo / AP

Bleak reading for the New Zealand media in yesterday's Herald Business pages.

"Ad revenue puts pressure on TVNZ," went one headline. "Fairfax NZ's revenue falls," sighed another.

The preview of the Commerce Commission decision on a Vodafone-Sky merger noted that the satellite TV service "posted a 32 per cent drop in first-half profit as content costs increased, and revenue and subscriber numbers fell".

The common denominator across these rain clouds is, of course, the internet. It is probably safe by now to conclude that scientist Clifford Stoll's 1995 assurance that the internet was a passing fad, an invention doomed to failure, was flawed.

The thing has shaken just about everything: commerce, politics, entertainment - in the media it is fast turning newsprint and set-top boxes into adorable antiques.

It is the great online upheaval that propelled Sky and Vodafone's attempt to tie the knot, which ComCom declined yesterday. It is similarly at the heart of the NZME-Fairfax bid to bind, which the regulator seems similarly disinclined to consent.

The most powerful media company of them all, meanwhile, apparently transcends almost all regulation.

For Facebook, the 21st century could hardly be sunnier: almost two billion users worldwide and a staggering balance sheet. In the last quarter of 2016, it brought in US$8.81 billion ($12.2b) in revenue.

Increasingly, Facebook is the internet, or rather the internet is Facebook. It strives to relieve you of any need to leave its dominion at all.

You can read media articles there, exchange messages, watch or post videos and livestreams, buy and sell stuff; it's working on ticketing functionality and intra-office chat.

Just this week Facebook expanded its money transfer service. A cynic might wonder if the platform that began as an Ivy League photo album is now contending for the title Rolling Stone writer Matt Taibbi bequeathed Goldman Sachs: "a great vampire squid wrapped around the face of humanity".

Hell no, I can hear Mark Zuckerberg holler. The Facebook founder and honcho-in-chief addressed the thorny issue of humanity on the weekend in a post that serves in part as a poignant reminder of a time when column-inch limits disincentivised copious, 5000-word-plus online think-pieces.

It is undeniably fascinating, however, in pondering "are we building the world we all want?"

The task for Facebook and others, he writes, should be "building the long-term social infrastructure to bring humanity together".

A major portion of the tract addresses media matters. He may not go so far as to explicitly repudiate the repeated insistence that Facebook is not a publisher - the "we are a technology company" line is almost as absurd as Uber's assertion that it is not a transportation company but a tech provider.

But Zuckerberg does acknowledge "mistakes", and he does accept his company's critical role, as laid bare especially around Brexit and the US election. "The two most discussed concerns this past year were about diversity of viewpoints we see (filter bubbles) and accuracy of information (fake news)," he wrote.

"I worry about these and we have studied them extensively, but I also worry there are even more powerful effects ... around sensationalism and polarisation leading to a loss of common understanding."

Facebook and Google announced earlier this month that they were taking steps to root out fake news in France and Germany in the lead-up to their respective elections this year.

Good. But at the same time it underscores the muscle these internet behemoths yield. Who's to say the people in charge next time, or the time after that, might not have less virtuous motivations?

Fake news is bad, but algorithmically and invisibly configuring news diets to privilege one side or the other smells kind of sinister, too.

But back to the article.

A strong news industry is critical to building an informed community. There is more we must do to support the news industry to make sure this vital social function is sustainable.
Mark Zuckerberg

Well, Mark, no disrespect and that, but you could start by paying a reasonable whack of tax. Facebook reportedly coughed up $43,000 tax in NZ last year - comfortably less than, say, Bill English via PAYE.

Whether or not you think that is morally defensible, it is hard to square with the very real impact of Facebook, alongside Google, in hoovering up the lion's share of domestic digital advertising spend.

In their merger application to the Commerce Commission, NZME and Fairfax offered a breakdown of the digital advertising market. Between them, they said, the two companies took just less than 12 per cent of the revenue, in the year to the end of February 2016.

Google and Facebook pocketed 53 per cent.

The same pattern repeats around the world. The money that used to go, thanks perhaps to a happy accident, into funding journalism, now goes to the colossi of Silicon Valley.

At the same time, media outfits everywhere have become beholden to the blue empire. The Facebook "news feed" has for many replaced the newspaper front page. And so publishers, believe it or not, pay money to Facebook to bump their content up those pages. Even the national broadcaster, RNZ, does it.

Fair enough, too, that's a sensible strategic decision, but it's nonetheless remarkable that public money for public-interest journalism is going into Facebook's piggy bank.

The muscle of Facebook is such that an algorithm tweak gave publishers a collective aneurism recently. When it decided that users wanted to see more friends and family content - babies, pets, drunken reunions - a fiddle of a knob prompted online media to report sudden drops in traffic.

And, hey, it's Facebook's algorithm, it can tweak as it pleases, but it seems reasonable to require a little transparency about the magic formula, which is currently almost entirely cloaked in secrecy.

When it was reported this month, meanwhile, that Facebook had for two years overestimated the time its users were spending watching videos on their site by as much as 80 per cent, publishers and advertisers were rightly aghast.

This was not some mere academic cock-up - online news operations had laid off hundreds of writers, replacing them with videographers, because the common wisdom, fuelled by Facebook's exuberant data, was that video was surging, that's what everyone wanted.

As Martin Sorrell said afterwards: "We have been calling for a long time for media owners like Facebook and Google not to mark their own homework."

It's great that Zuckerberg communicates openly with readers using his own platform, but it would be nice if there were a similar openness about the hallowed algorithm.

And when Zuckerberg concedes that there is "more we must do to support the news industry", I can only assume that he's sending a message to governments, emboldening them to start filling the regulatory holes that have been left by the online media revolution, and redistributing a sliver of the gargantuan profits to the journalism he purports to value so highly.

- NZ Herald

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Toby Manhire is a Wellington-bred, Auckland-based journalist.

Toby Manhire is a Wellington bred, Auckland based journalist. He writes a weekly column for the NZ Herald, the NZ Listener's Internaut column, blogs for listener.co.nz, and contributes to the Guardian. From 2000 to 2010 he worked at the Guardian in London, and edited the 2012 book The Arab Spring: Rebellion, Revolution and a New World Order.

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