Illustration: Toby Morris

OPINIONMediaMay 31, 2022

How Australia’s news media bargaining code levelled the playing field

Guest writer

Illustration: Toby Morris

The architect of a law passed last year to address the massive imbalance in bargaining power between Australia’s news media businesses and tech platforms like Google and Facebook explains why it was so successful.

The Tinbergen Rule, named after one of the first two Nobel laureates in economics, says in effect that each policy instrument must be targeted at achieving one policy objective. It can have side benefits, but to be effective each policy instrument needs to stay true to the single objective for which it was designed. All policymakers should be aware of and adhere to this rule.

The news media bargaining code (NMBC), passed by the Australian parliament in February 2021, despite threats to remove Google Search from Australia and to take all news and more off Facebook, is a great example of this.

The NMBC’s objective was to address the massive imbalance in bargaining power between Australia’s news media businesses and the platforms. Google and Facebook need to have news on their platform to maximise user attention and so enhance the advertising revenue on which they depend, but they do not need the content of any particular news business. On the other hand, each media business needs to be on each of the platforms.

This imbalance, or market failure, means commercial deals cannot be done to achieve fair payment for the benefit the platforms gain from news media content on their platforms. The outcome is that less journalism can be afforded. Journalism benefits society in many ways, even for those who do not access it, as it holds the powerful to account, provides a journal of record and is a forum for ideas. While not all market failures need to be addressed, this one needed to be and was with the NMBC.

Prior to the Australian NMBC being passed, the news media businesses were unable to negotiate with the platforms for any payment for their content; with it they could require the platforms to negotiate and trigger arbitration if those negotiations did not yield an appropriate result. The threat of arbitration evens up the bargaining power as all parties wish to avoid having an arbitrator determine commercial arrangements; it is much better to have this rather than a take-it-or-leave-it offer from a monopoly, but even better to settle a commercial arrangement.

Australia’s NMBC has been extremely successful in achieving its stated objective. From not being able to engage with the platforms, the Australian news media businesses that have deals under the NMBC are comfortable with them, and these deals are yielding over A$200m per annum to the news businesses. Further, the platforms have likely done deals with media businesses employing well over 95% of Australian journalists.

The NMBC has, however, been criticised for the fact the deals reached were not transparent; that it favours the incumbents and so has not promoted media diversity; and that no platform has been designated under the NMBC and there have been no arbitrated outcomes.

Transparency was not an objective of Australia’s NMBC. Not only would the commercial deals not be transparent if the bargaining power had been equal in the first place, but any arbitrated outcomes under the NMBC were required under the legislation to be kept confidential. The reason for this was that making the commercial or arbitrated deals transparent may see different deals done or achieved to the detriment of the news businesses.

In relation to diversity, the objective of the NMBC was to allow commercial negotiations for payment for existing content; how could the platforms be required to pay for content not yet created? The NMBC was only one of nine recommendations from the Australian Competition and Consumer Commission’s 2019 digital platform inquiry affecting media. Others, such as government grants to support media and allowing tax deductibility for donations to the media, would benefit media diversity.

Designation and arbitrated outcomes were not the objective of the NMBC. The hope was that the threat of arbitration would see commercial deals achieved. These were, however, achieved with the threat of designation.

There are, however, two issues that need to be addressed. First, Google has done deals with virtually all media companies but has drawn the line at a very small number that it argues should not qualify under the NMBC because they do not produce public interest journalism. Those media businesses without a deal strongly object to being left out. The Australian treasurer has recently launched a review of the NMBC as required under its legislation, and the issue of whether the criteria dealing with which media businesses should be eligible will be addressed in this. The Australian treasury will assess whether all that should have got a deal did in fact get one and, if not, why not.

More concerning is that Facebook has done many fewer deals than Google, including not having done deals with the SBS, Australia’s multicultural media business, or The Conversation, which allows collaboration between Australian academics and journalists to publish research-based news. Both would qualify under any NMBC criteria.

A key question, then, now or following the treasury review, is whether Facebook should be designated under the NMBC. Unless Facebook does more deals, then this would appear appropriate.

Rod Sims was chair of the Australian Competition and Consumer Commission until March 2022.

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Image: Archi Banal

MediaMay 31, 2022

‘A slap in the face’: RNZ’s new theme music made in Australia

Alex Casey

Senior writer

Image: Archi Banal

In the final week of New Zealand Music Month, RNZ has debuted a new theme for its news programmes – produced by a studio in Sydney. Alex Casey speaks to local music industry members angered by the move.

RNZ’s recent “sonic refresh” has provoked outrage from the local music industry in Aotearoa, with critics calling the move “tone deaf” and “a slap in the face” from the publicly-funded broadcaster. Beginning last week on May 28, during the final week of New Zealand Music Month, RNZ’s flagship news programmes Morning Report, Midday Report and Checkpoint launched new theme music, the first update in years. The outrage? It was created by a Sydney sound design studio called Song Zu.

“Everyone is quite shocked by it,” says Polly McKinnon, co-chair of the Screen Music and Sound Guild of New Zealand. Established in 2020, SMSG represents composers and designers who work for film and television in Aotearoa, as well as other media projects. “This is the perfect example of why we needed an organisation that can advocate for us,” she says. “We have this incredible talent pool here in Aotearoa, and there just seems to be this lack of confidence in our local talent, sometimes from our filmmakers and obviously now from our public broadcaster.”

The Sydney-based design company that made the theme worked in collaboration with New Zealand composer Jim Hall, but McKinnon says there was no need to take the production to Australia. “It was the right call for them to utilise a New Zealand composer but, that being said, it was the wrong call to have gone offshore to a studio in Sydney in the first place – we have everything we need here to produce world-class work.”

Prior to the update, the Morning Report theme had remained the same since 2014, composed by Wellington-based company Plan 9. David Donaldson of Plan 9 was equally shocked to hear that they had chosen to make the new music offshore. “I switched the radio on and heard they were doing an update, and then I heard them say it had gone to this Australian ad studio,” he says. “I was just kind of dumbstruck. You’ve got to be joking.”

Sydney-based Song Zu also created the music for Australian Public Broadcaster SBS, with RNZ head of news Richard Sutherland saying last week that they wanted the new brand to be comparable to BBC’s new bulletin theme. This, Donaldson says, was a mistake. “Why do we want to sound like the BBC or the ABC or some generic news thing? Instead of thinking outside the box they climbed into a bunch of smaller and smaller boxes.”

Although he believes that Plan 9’s theme was probably due a refresh, Donaldson says RNZ’s decision was “a lost opportunity” to promote local musicians. “There’s a lot of good musicians and composers and studios, and it’s not as if we are all really busy,” he laughs. “We’ve all just come out of Covid so it’s not like they tried ringing and everyone went ‘no, we’re too busy’. They could have had a really interesting collaboration.”

RNZ said in a statement that both local and international options were considered for the new theme. “This project required specific experience and in the end preference was given to sound designers who had completed recent original contemporary work with a public broadcaster.” It said Song Zu were chosen “because of their impressive original sound portfolio” and that the studio worked closely with Jim Hall, “an outstanding local composer and a specialist in the use of Māori instrumentation in his original works.”

Hall, who has been in the industry more than 40 years after emigrating to Christchurch from England as a child, used Māori elements including taonga pūoro and porotiti in the final piece.

The poor choice of timing also sends a deflating message to local musicians during New Zealand Music Month, says McKinnon. “It’s a slap in the face for our local composers and sound designers,” she says. “It’s so tone deaf – the month is all about celebrating the talented and skilled bunch of people that we have here.” Donaldson agrees. “They can sit there and have Music 101 and promote New Zealand Music Month and speak te reo, but it still says that New Zealanders aren’t good enough to prepare the music for our national radio broadcaster.”

The Spinoff understands that SMSG sent a letter to RNZ on the day the news was announced, and is now in conversation with head of news Richard Sutherland.

In response to the criticism, RNZ says that it “has always been, a strong supporter of musicians and the music industry in Aotearoa New Zealand.” RNZ Music broadcasts performances from up to five local acts a week, and 30% of the RNZ playlist is New Zealand music – with higher numbers expected from May. “This of course excludes specialist content, documentaries, podcasts, and interviews with New Zealand musicians and industry personalities,” the statement reads. “RNZ is proud to support the music of Aotearoa New Zealand.”

McKinnon says that she could name “literally hundreds” of local musicians who would have been capable of revamping RNZ’s music. Although she says “the ship has sailed” on this particular theme, she would welcome reflection from RNZ management. “They need to think about if they are going to champion our talented people right here at home, or still stick with this cultural cringe thinking that you have to go overseas to get quality work.”