Local news media, including the NZ Herald, Stuff, The Spinoff and the Otago Daily Times, is seeking Commerce Commission approval to collectively bargain with Facebook and Google. The Spinoff founder Duncan Greive explains why.
Over the past two decades, technology has transformed the global economy and our lives, bringing huge changes that have both profoundly positive and highly destabilising impacts.
We can communicate with friends and whānau around the world instantly, set up and promote businesses and causes easily and have access to an enormous amount of information and culture, all at very low cost – often for free.
At the same time we've seen divided communities, online environments that have produced unspeakable hate crimes and had the rollout of a life-saving vaccine badly stymied by misinformation.
At the centre of all this are two businesses unlike any the world has ever known: Google and Facebook. Together they own and rule vast chunks of the internet, with a large majority of us using their services every day. Every part of our government wrestles with them, as do almost all our businesses. They operate as near monopolies, and, while wildly profitable, pay very little tax in New Zealand.
How do they make all that money? They sell ads. Their free services are powered by highly sophisticated data-scraping that allows them to target ads to search engine and social media users. But they create almost no content themselves. Instead they rely on content created by users, without effectively ensuring that content is accurate or not causing harm.
They also benefit from the quality, researched and fact-checked journalism created by New Zealand's news media organisations. Because they own the data and the users, search and social media – which Google and Facebook dominate – accounted for over 70 per cent of digital advertising revenue in the first half of 2021, according to the IAB. The same survey put the news media's display advertising share at just over 11 per cent.
This disparity has seen New Zealand's media shrink markedly, with less than half as many journalists employed here as there were just 15 years ago. While some audience members have come on as subscribers or members of our organisations, the income is nowhere near commensurate to that lost to the digital giants. The impact of successive lockdowns has only exacerbated this long-term trend, while further enriching Google and Facebook, each of which has more than doubled in value since the pandemic began.
This disparity has now started to impact your tax dollars, as the government has allocated over $100m to schemes including the Public Interest Journalism Fund to support local journalism and media. This shows that news brands you watch, listen to and read every day are existentially threatened by the challenge these firms represent – and now everyday New Zealanders are having to subsidise media through their taxes.
We believe there is a better and fairer way.
Australia has shown a different path
All over the world, media and governments are grappling with how to deal with the relationship between the tech giants and the news media. There is vital work being done in France and in Canada, but also in Australia.
Over the Tasman, their competition authority has recognised the power imbalance that exists between the tech giants and the local media. The Australian government introduced a bargaining code that led to meaningful deals between the tech giants and the media, from small organisations to the likes of the Guardian and Sydney Morning Herald. These hold the promise of a sustainable media that does not rely on government subsidies for news.
This is why a group of local media has this week sought permission from the Commerce Commission to collectively bargain with the tech giants to achieve the same result here.
New Zealand is a small country, and our media companies are smaller still – but together we believe we can sit across the table and work out fair deals that work for us and the tech giants, and ultimately create sustainable journalism that better serves our collective audiences.
We want to do it together, so that whatever deal we strike benefits all organisations equally, to assist each of us to separately and vibrantly compete in what is – unlike search and social – a very competitive local media market.
Crucially, we also are committing to seeking equal terms for any news media organisation that fits a particular set of terms to join the collective, or to benefit from any deal struck. This is about a sustainable and fair deal for our independent news media as a whole.
We believe there is huge public interest in this deal. Aotearoa sits at a turning point right now, with delta in our communities, a huge vaccination drive under way and the challenging spectre of our reopening to the world looming. As we have throughout the pandemic, and indeed for decades before, our organisations have collectively sought to bring timely, accurate and independent journalism to a population that needs it more than ever before.
This job, already vital, has become considerably more difficult in recent years. Just as the number of journalists employed has halved, an increasing proportion of our coverage goes directly to combatting rumours, misinformation and disinformation sourced from social media, messaging apps and YouTube. In recent weeks this has led to credible threats against journalists, as we saw in the recent march on parliament. This is an unfunded additional burden on top of our other reporting rounds, for which natural justice suggests those tech giants profiting from that information's spread should bear the cost.
Fundamentally we know that the success of these platforms is aided by the supply of high-quality journalistic content around which they sell some of their ads – and that it's time the tech giants start to pay a fair price for its role in their businesses.
This is a global problem, and recent weeks have seen the international community start to take serious steps toward addressing the harms to competition and society done by these firms. While that process will necessarily be slow and trans-national, Australia has shown that direct negotiations between publishers and the tech giants can yield fast and fair deals that make a meaningful contribution to the production of trusted public interest journalism for myriad different audiences. And that such deals do not impact either the innovation or the profitability of the tech giants.
All we are seeking is the right to band together to more fairly negotiate with the most powerful and profitable firms the world has ever known. It will have no impact on the tech giants' services, but will help protect and sustain the local media brands you consume every day.
We hope the commission will recognise the power imbalance and grant us this right.
Duncan Greive is the founder and publisher of The Spinoff
The NPA has filed the Commerce Commission application on behalf of its members – news organisations like The Dominion Post, The Press, Otago Daily Times and NZ Herald. The Spinoff has elected to join the application, and the collective invites any interested New Zealand-owned and independent media organisations to register their interest by emailing email@example.com