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Image: Tina Tiller
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MediaFebruary 15, 2024

A vital and perilous day for the news media in New Zealand

Image: Tina Tiller
Image: Tina Tiller

A contentious bill aiming to create ‘fair bargaining’ between tech giants and the news media reaches select committee today. Here’s what it’s all about.

What is the ‘Fair Digital News Bargaining Bill’?

It’s a piece of legislation designed to encourage some of the super-scale technology companies which dominate the internet to make deals with our domestic news media. The underlying idea is that platforms such as Google, Facebook, Instagram, TikTok and LinkedIn all benefit from hosting different kinds of news content, yet do not share revenue with news organisations which bear the cost of producing it.

Introduced under the previous Labour government by then-broadcasting minister Willie Jackson (during a particularly chaotic Q+A interview), the bill was positioned in part as a sustainable long-term replacement for the contentious Public Interest Journalism Fund, which some news organisations and news consumers felt brought the state too close to journalism for comfort. The bill is strongly supported by news organisations, and by others like Creative NZ and Better Public Media – but not everyone is a believer. Along with tech companies, The Taxpayers’ Union is against it, as is business think tank the NZ Initiative, whose chief economist Eric Crampton described it as a “disgraceful shakedown”.

Why is it considered necessary?

Historically, the production of news was largely funded by advertising. As all forms of journalism have moved from legacy channels like print, television and radio into various forms of digital distribution, that model has been seriously challenged. The strong, stable advertising revenue which once covered both the production and distribution of news has now largely moved to the distribution side of the equation – the money sits with social and search providers, not those who make content. 

The data associated with logged in users of social media and search is part of what makes companies like Meta (owners of Facebook, Instagram and WhatsApp) and Alphabet (owners of Google and YouTube) both incredibly profitable and extremely fast-growing, despite creating no content of their own. Advocates for news organisations point to the fast-evolving nature of the tech companies products which directly feed off their work. 

For example Google’s “snippets” which answer up to 65% of search strings without a click, are often drawn from news sites, while the megatrend of users recapping news reporting on TikTok and Instagram points to the way technology companies benefit from and have better products in part through journalism.

Meanwhile, New Zealand’s news media has endured decades of job losses as the costs associated with news gathering and creation are not close to being met by advertising revenue. While some news consumers support the creation of journalism through programmes like The Spinoff Members (please do contribute if you can), there remains a stubborn gap between the costs of newsgathering and revenues to support it.

The Newspaper Publisher Association’s Andrew Holden quotes data which suggests just 10% of digital advertising revenue goes to news organisations, despite the likes of Stuff and the NZ Herald being amongst New Zealanders’ most highly visited sites. He also notes the looming threat of generative AI like ChatGPT, heavily trained on news organisations’ work, as adding real urgency to the discussion. The bill attempts to solve that by pushing tech companies to make deals with local news organisations. 

What are the international precedents?

This all began in Australia. In 2021, the right-leaning Scott Morrison government responded to a landmark paper from its competition authority with a similar bill to ours, which asked big tech to make deals with Australian news organisations, or submit to binding arbitration. There was significant angst from tech companies, including Google threatening to withdraw its services, while Facebook really did briefly (and disastrously) shut news off on its platforms overnight. 

Ultimately after the brinkmanship, both companies ended up making deals with most significant Australian publishers, which are thought to generate AU$200m per year – enough to fund 20% of the country’s costs of journalism production. Locally, there have been some moves in this direction. Many local news organisations, including The Spinoff, have signed deals with Google – but these are thought to collectively add up to only a tiny fraction of those signed in Australia, even after adjusting for our relative population scale.

The Australian process was replicated in Canada, in a battle which also became deeply contentious, and ultimately led Facebook to make good on its threat to withdraw from news, albeit in a more controlled way. Still, Australia’s former competition chair Rod Sims says that its legislation has been successful in “achieving the single objective set for it: to address the imbalance in bargaining power between the country’s news media businesses and the digital platforms of Big Tech”. 

Image: Archi Banal

What is the current coalition’s position on the bill?

Mixed – at best. In opposition, Melissa Lee was strongly against it, calling it a tax. Now that she’s in power as the minister overseeing the bill, she’s softened slightly, agreeing to allow it to progress to select committee – but there is no commitment to go further. Act went even further, with self-described “anarcho-capitalist” MP Damien Smith saying “it’s not going to surprise you that I’ve convinced our party to oppose this bill.”

However a spokesperson for Act indicated to The Spinoff that its stance has also been subtly toned down, noting that the party “opposed the bill at first reading and will now hear from submitters at select committee.” Of the governing trio, only NZ First is strongly in favour of the bill. It campaigned with a policy of requiring “major global tech platforms like Google and Meta to support NZ journalism by paying a fair price for NZ published content”. 

The tension between the three parties toward this legislation ultimately exists because both National (rhetorically) and Act (philosophically) are opposed to intervening in business, making a big deal about letting commercial markets sort all this out. This is complicated by the fact the state is a huge player in media, owning or funding TVNZ, RNZ, Whakaata Māori and more, while also financing some media – including journalism and documentary –through NZ on Air, the Film Commission and various gaming and film rebates. 

There’s also the appearances side of it. Were a major news operation to fold, the government could face the awkward spectre of ending up the sole supplier of TV news or with a major city lacking a scale news organisation. This is the kind of situation more commonly associated with autocracies – not something any government would view as desirable.

What does the news industry make of it?

It’s predictably very supportive. The reaction is typified by NZME, parent company to the NZ Herald, BusinessDesk and Newstalk ZB. “NZME strongly supports the objective of the Bill… to support the viability of news media organisations in the digital marketplace.” Stuff’s Sinead Boucher told The Spinoff that “there is no plan B”.

Boucher went on to say that “the environment controlled by these monopolies is inherently stacked in their favour and no one else’s… They are making vast powerful businesses off the back of our work, our investment, our day-to-day commitment to showing up to report and produce excellent, trustworthy journalism, but yet, where is the value of that work flowing?”

Of the main players, TVNZ is the most circumspect, expressing general support for the bill’s intentions, but noting apprehension about the potential of Meta in particular to withdraw from news distribution. It suggests a potential solve involving “must carry” or “non-retaliation” provisions. These would essentially force Meta to run news, potentially opening up an intriguing new bind for the social media giant.

Sinead Boucher, Stuff owner and CEO (Photo: RNZ/Supplied)

What about the tech platforms?

Just as predictably, the two largest are firmly against it. Meta’s submission says that the “Bill ignores basic economic and commercial realities, does not give weight to the true nature of the value exchange between publishers and platforms, the different operating models between search and social media entities, the shifting customer preferences or the need for a new and rapid digitisation of the news media sector.” Google meanwhile says that the bill is “fundamentally misconceived”.

Intriguingly, two other tech behemoths failed to submit at all. Microsoft (through LinkedIn and its relationship with OpenAI’s ChatGPT) and Apple (through Apple news and its app ecosystem) both have smaller but still vital roles in news distribution, yet have stayed away from the discussion. This could be in part because they see an opportunistic advantage in any potential sabre-rattling from Google and Meta – in Australia, for example, Microsoft affirmed its willingness to step up with Bing should Google withdraw products like search from circulation.

Another interesting sub-plot: Snap, the parent company of Snapchat – an app still beloved by teens and with over 400m daily users, took a notably more nuanced position than Google and Facebook. “Snapchat does not have a feed of unvetted or unmoderated content that is algorithmically pushed to a large audience,” it wrote. “We work closely with media partners from around the world to deliver personalised and relevant content on our platform, giving them an opportunity to reach new, and typically younger, audiences.” 

As with Microsoft, it seems to suggest that were Facebook to withdraw from news or New Zealand, it would be willing to replace them (while wanting to be understood as a different type of business, and ideally not subject to the bill at all).

Where to from here? And what are the stakes?

Today all those written submissions will be joined by oral submissions from most of the major interested organisations. Expect wildly differing perspectives and a potential clue as to how various parties’ stances are evolving through any questions asked. From here the big decision lands on Minister Lee’s desk – whether to progress the bill and stare down Silicon Valley’s giants of technology, or let the local news media face the same carnage which is already happening in the US. The New Yorker memorably described it this week as an “extinction level event”. 

No pressure, then.

Keep going!