media

MediaDecember 14, 2021

2021 media year in review: The news organisations strike back

media

It’s been a hell of a year for media – especially when it comes to its relationship with the tech platforms that control its destiny, writes Hal Crawford.

For the biggest big picture thinking on the state of tech, it’s hard to go past Benedict Evans. The former venture capitalist, now full-time newsletter writer and analyst, says we have just flipped over to the second 50 years of the digital revolution.

“Tech used to sell accounting tools to big companies. Now it’s part of our lives.”

This is the lens I want to use as I take 2021 apart: the world adjusting, tectonic plates shifting, the realisation, personally and as a society, that the (mostly American) tech industry that used to sell accounting tools now owns the world.

If you think I’m exaggerating, look at this graph:

That’s the entire global revenue of the recorded music industry and the film industry against the revenues of four individual US tech companies. The music and film industries used to be prime movers in creating culture. They are now small fry compared to the digital platforms.

All nations, including New Zealand, are struggling to come to terms with the new world order indicated by the graph above. Of particular importance is the fact that, unlike most old-school multinational companies that may have produced goods or provided services, the digital giants control and profit from the flow of information. Most of what is happening in media, down to the individual company movements in New Zealand, results from this big power shift.

Facebook as villain

The world’s social network has occupied my thoughts a great deal this year, and I’ve written for The Spinoff about it more than any other topic. What began in 2018 with a notorious algorithm change that hurt news publishers is now an established narrative: Facebook is almost exclusively seen as a malevolent force. I believe this narrative arises from both real problems with the social network and because news people now understand it’s a competitor.

The real problems are deep: Facebook wants all of the control and none of the responsibility, and that’s not going to wash any more. It’s got an army of moderators, it’s got an independent oversight board, and it can influence elections. In most jurisdictions, including New Zealand, the assumption has been that Facebook is no more responsible for platform content than a telecommunications carrier. That era is over, most recently evidenced with an Australian law – the poorly named “Anti-trolling Bill” – that will push legal responsibility for third-party post comments on to social networks themselves, rather than page owners.

There is now more-or-less open war between news media and Facebook, which changed its name to Meta in October without removing the target from its back. Ask almost any journalist, and you will hear the same story: Facebook and Google stole our content and our advertising money.

Here’s what Benedict Evans told me earlier this year about that (in relation to Google, but the logic also applies to Facebook):

“To look at this and say, ‘Well, we used to all have all this money and now Google has got it’, it’s just idiotic. It’s as though you’re an ocean liner company and you’re saying, ‘Boeing stole all our money’. That’s not really what happened.”

Of course, if the ocean liner company happens to still have an enormous foghorn, the complaints are not going to die away any time soon.

NZ news organisations have banded together to seek permission to collectively bargain with Facebook and Google (Illustration: Toby Morris)

Money changes hands in shady lanes

Another multinational company accustomed to controlling and profiting from the flow of information has become the main antagonist of the tech giants. News Corp’s campaign against the platforms bore fruit in Australia early in 2021 after a truly extraordinary passage of play that was as entertaining as it was globally influential. The News Media Bargaining Code (NMBC) passed into law in Canberra after a tumultuous few weeks that saw Facebook censor all news content in Australia, and Google do a complete flip from outright defiance to furious deal-making. As a commentator, I was wrong-footed so many times through the process that I should probably shut up now. What I had not anticipated, as I opined on the code’s flaws, was that it would never actually be used. Instead, it sat on a shelf (no platforms were “designated”) while Google and Facebook went to all the major media players and cut deals that equate in total to at least NZ$200m every year.

The problem with these deals, which have seen some new jobs created in Australian news media, is that they are secret and there’s no requirement to spend the money on journalism. As a global precedent, they stink.

That hasn’t stopped the New Zealand media from wanting a piece of the action: late in November, The Spinoff broke the news that it and most other NZ news organisations were seeking permission to collectively bargain with the digital giants. This ought to be granted by the Commerce Commission, but probably won’t make any difference: naked political pressure did the trick in Australia, rather than any amount of actual bargaining. The NZ media may find itself in the same boat as smaller Australian companies, which for lack of political clout can’t get a deal.

Funding the public interest

What has received less global attention than the Australian code but is having a far bigger influence on New Zealand news is the Public Interest Journalism Fund (PIJF). I have to declare a personal interest here: I have worked for NZ On Air on the PIJF from its inception and I’m a big believer. What you should know is that $55m is being spent over 2.5 years to support local journalism, which on my calculations puts it at about half the relative size of the code deals in Australia. The difference is that all the money spent as part of PIJF is cash – rather than in-kind deals – and it all transparently goes to making news. The Spinoff’s internet reporting project IRL and its te ao Māori podcast and series Nē? are both funded by the PIJF.

I have studied systems of funding news throughout the world, and I believe the PIJF is unprecedented in terms of spend per head of population and in how the funding is being distributed. This has only been possible in Aotearoa because of the history NZ On Air has in funding independent of government.

There has been some political criticism of the fund, and probably more significantly, some public consternation around payments from the government to news companies. The funding recipients have their own answers to this, and from my point of view the rebuttal is easy: newsrooms routinely reject editorial influence from advertisers and other funders. The key is to examine whether influence has in fact been exerted. There is no evidence for – and plenty of evidence against – the idea of media being paid off.

Image: Tina Tiller

Moving to the edges

What happens to local media markets as global digital platforms encroach? In New Zealand, there’s a trend for once-regional news players to go national in scope in order to maximise audiences. There has also been a move to paywalls and contributions. The first movement has put big NZ news media (NZME and Stuff) in direct competition where previously they dominated individual city markets, the second encourages a “mission” based approach to editorial coverage. I believe both factors combine to push news away from the political centre, something that can already be seen in an increased differentiation between Stuff and nzherald.co.nz.

That movement will be moderated by the Kiwi national character – tabloid journalism of the kind seen in Australia is regarded as a bit extreme – but potentially also by the creation of a national public media monolith in the merging of RNZ and TVNZ. That merger is on the cards after the government appointed a governance group in March to examine the cultural and economic case for a bigger NZ public media using its own assets. The governance group has returned its report and we are all waiting to see what happens next. If it doesn’t become too much of a political football, New Zealand may be able to create a lasting national institution in the public interest, and at the same time end the strange TVNZ ownership situation. The government owning a fully commercial broadcaster – with no charter – feels odd even when the thing is profitable. If TVNZ ever dived to sustained loss, government ownership would become even more problematic.

What you do is what we are

One thing it’s easy to forget when examining the big picture is that trends and changes rest on human behaviour. All the wonders of tech would come to nothing if people’s actions remained the same, so it’s important to keep track of what people are actually doing. A longitudinal survey series (the statistically valid Where Are The Audiences?) delivered its latest instalment earlier this year, showing that linear TV watching among under 40s in NZ has halved in just five years. Radio and TV are still big in NZ, but only because of older audiences. For media companies there is absolutely no respite from the pressure to find new revenue sources.

The big opportunity

Earlier in the year, I argued that a global rash of media consolidation pointed to an opportunity for New Zealand to develop a national video platform. While Netflix, Amazon, Disney and others fight it out to own streaming video, there’s still a big gap in the local market which is currently too difficult and small for the global giants to bother with: New Zealand video content. That may not always be the case, particularly if the same kind of network effects that have led to the rise of Google in search and Facebook in social arise in video. Using TVNZ OnDemand as a solid base, aggregating all publicly funded video content, and then inviting other commercial video content on board would provide a compelling service to New Zealand audiences. In fact, this kind of Platform NZ is what should sit at the heart of the TVNZ/RNZ public media proposition.

It would also be a cultural counterweight to the power of the global tech giants. This is the same graph as above, with one addition:

Whether you are horrified or pleasantly surprised by this comparison of NZ’s GDP to tech revenues may depend on individual psychology. On the one hand, there are the twin towers of Amazon and Apple towering over a nation-state of five million people. On the other, as big as big tech is, one small country is up there with the best of them.

As the platform giants become ever more influential and “software eats the world”, the role of nations in regulating and channelling technology is becoming more important. This is about more than media, but the flow of information is there at the heart of it. The first digital era is over – a real Wild West, complete with unhinged optimism and land grabs – and big tech is about to meet big regulation. Let’s hope for genius and courage on all sides.

Hal Crawford is a consultant with NZ On Air and sits on the Meta News Accelerator advisory board. Sign up to his media and tech newsletter here.


Follow Duncan Greive’s NZ media podcast The Fold on Apple Podcasts, Spotify or your favourite podcast provider.

Mad Chapman, Editor
The Spinoff has covered the news that matters in 2021, most recently the delta outbreak. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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