Parliament’s Economic Development, Science and Innovation select committee today heard from a range of New Zealand’s news media companies about how the changing media environment and the dominance of tech giants are killing them.
The committee has been listening to submissions on a bill that seeks a more level playing field in the digital market that our media industry operates in. They argue that the tech giants whose digital platforms host news content that the media outlets produce are able to generate great revenue from this but share almost none of it with the outlets who do all the work.
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Economic Development, Science and Innovation select committee chair Parmjeet Parmar (left) and Willie Jackson listen to submissions on the Fair Digital News Bargaining Bill. Photo:
This imbalance is something affecting all New Zealand media companies, from the big outlets like RNZ, Stuff or the NZ Herald, to small town newspapers such as the Ashburton Guardian newspaper, whose co-owner and managing editor Daryl Holden was among those submitting to the committee this morning.
“Simply those digital internet companies such as Google, Meta (which runs Facebook and Instagram) and Microsoft are creaming it at the expense of every New Zealand media company who in many ways are slowly but surely bleeding to death. That's because those internet giants are using and sharing news produced by New Zealand media organisations on their mega digital platforms at zero costs to themselves. They are reaping unimaginable wealth and power building their businesses almost entirely off content created by others,” Holden said.
The Fair Digital News Bargaining Bill seeks to create a bargaining system between New Zealand news media entities and operators of digital platforms to support commercial arrangements for news content. It was introduced by the previous Labour government and passed its first reading last August.
Small step
The difficulties facing the Ashburton Guardian, which employs seventeen local people and is considering going digital-only, are not uncommon for media outlets in this country. Holden welcomed the bill as a small step that can be taken to bring tech giants to the negotiating table.
“It's been reported that Google's revenue in New Zealand was 78 million dollars in 2022 but it also paid its parent company in the US a separate service fee of 870 million that year. A small country of 5 million delivers nearly one billion dollars of value to Google. What do New Zealand media companies get out of it? Bugger all,” he explained.
“To be fair, Google has signed agreements with some New Zealand media companies including the Ashburton Guardian, but those last only up to five years. As far as the Guardian is concerned we accepted the deal from the position of no strength. Tthe money we are paid by Google annually is a pittance. I'm almost embarrassed to say how much we get because it would not be enough to hire one graduate journalist.”
This type of legislation was introduced in Australia a couple of years ago. After initial pushback from the likes of Meta and Google, which was also echoed in Canada, Australia’s move has helped to address the imbalance and resulted in a boost to the resourcing of journalism.
Digital realities
Media executives submitting to the committee today were unanimous in their support of the Bill. Sinead Boucher who spoke to the committee both in her capacity as Executive Chair and Publisher of Stuff, and as President of the News Publishers’ Association (NPA), said media entities all understood the need to operate in the digital world if they were to survive. However their operations and journalism in general face a range of threats from powerful tech forces, including the growth of generative AI systems which harvest the work of news media.
“Every single one of the members of the NPA has worked tirelessly to try and adapt their business to meet the new needs of audiences and consumers across digital platforms and other formats. But it is a losing battle when the value that you're creating from your content is flowing in its majority to the digital global tech giants who have no people on the ground doing no work here, yet have somehow also trapped publishers within their ecosystem,” Boucher explained.
“I don't think it's generally well understood how much they control the entire digital ecosystem. They control access to the internet, access to your audience, they harness your customer data and build products off it, they control the advertising technology and are able to set pricing and the sort of digital advertising world there. The tendrils are everywhere.”
RNZ CE Paul Thompson gives evidence before the Economic Development Select Committee in February 2024. Photo: VNP / Phil Smith
Speaking on the Bill, RNZ’s Chief Executive Paul Thompson emphasised the importance of being able to sustain a viable, trusted media sector in order to keep the country’s democracy safe and strong.
“It’s not a given that we'll be able to do that as a sector without some change, and the Bill is one step that we can take as a country to build that sustainability in the future. A robust media system is not a 'nice to have', it's absolutely essential for us as a sovereign nation, it's essential to a cohesive informed democracy and it's the bedrock of our sovereignty as a nation. If we don't tell our stories and own our stories, someone else will come in and do it for us from off shore,” he said.
Meta speak
One of the tech giants to have made a written submission on the Bill was Meta which said “the Bill will not solve the longstanding digital transformation challenges facing the news industry. It actually undermines - rather than supports - New Zealand’s public policy goals of fostering a sustainable and pluralistic news media sector”.
“Contrary to some public rhetoric the Bill does not provide a framework to ensure fair dealings between digital platforms and news publishers in negotiations. Instead, it will compel Meta to enter into commercial agreements that ultimately ignores the realities of how our platforms work, their voluntary nature, the preferences of the people who come to Meta for content, and the free value we provide news publishers. No company in any industry should be expected to invest in partnerships with no expectation of a return”.
Thompson told the committee that media outlets were not looking for a handout but rather for a level playing field.
“It's a level playing field that allows us to enter into good faith negotiations and extract fair value from those discussions. If they were going to happen to a satisfactory level they would have happened by now. So this legislation is not a silver bullet for our industry. I think it's quite a modest, practical step that we can take as a country,” he said adding that there are a number of different challenges facing the industry in the coming years, particularly gaps in journalism.
Broadcasting Standards Authority Chief Executive, Stacey Wood gives evidence at Parliament. Photo: VNP / Phil Smith
Regulator
The Bill provides for the Broadcasting Standards Authority to become the independent regulator to oversee the bargaining environment established by the Bill and monitor parties’ compliance with the duties and responsibility established by the Bill.
The BSA’s chief executive Stacey Wood told the committee that one thing missing from the Bill is an Official Information Act override clause to protect against the release of confidential and commercially sensitive information.
“We and many of the media we’ve engaged with do wonder if information-gathering powers in the Bill are slightly too broad as currently drafted. The regulator does need a clear mandate to be able to gather the information it needs to do its job, but there are some understandable reservations about giving more information than is necessary particularly where its commercially sensitive.
“The industry has been facing financial headwinds and existential challenges for years, and this bill won’t solve all of the sector’s problems but it will help. Other measures will still be needed to resolve issues like the rise of disinformation and other online harms. This doesn't get in the way or prevent any of those other measures. We see it as a targeted, right touch approach to help achieve fair outcomes between commercial parties.”
Jonathan Ayling of the Free Speech Union submits to Parliament's Economic Development, Science and Innovation select committee regarding the Fair Digital News Bargaining Bill, 15 February 2024. Photo: VNP / Phil Smith
One of the submitting groups who oppose the Bill in its current form - the Free Speech Union - was concerned that the Bill demanded participating media organisations to abide by professional media standards if they were to enter bargaining, which the FSU suggested would undermine editorial independence.
Considering that the National and Act parties voted against it in August, it remains to be seen whether the coalition government will support this Bill, or how much they may want to change it.