The Government will follow Australia and Canada in proposing a law that will require internet giants Google and Meta to pay for the local news they use, with estimates of about $30 million to $50m flowing to New Zealand media.
The intervention is designed to throw a lifeline to media organisations that have seen their advertising revenues eroded as their audiences have moved online and been captured instead by internet search and social media companies.
Broadcasting Minister Willie Jackson confirmed on Sunday that the Government will introduce legislation to act as a “backstop” when big internet platforms did not voluntarily strike deals with media outlets.
He said it was likely they would be given three to six months before the mandatory mediation process began.
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“We’ve probably lost 50% of journalists in the last 10 years. We’ve got to give hope to the small players out there. I’m proud to bring forward this legislation to support them,” he told media.
“It’s not fair that the big digital platforms like Google and Meta get to host and share local news for free. It costs to produce the news and it’s only fair they pay,” Jackson said.
”The reality is we are talking about $30m to $50m coming back into the local market.”
The legislation would be based on that used in Canada and Australia.
He said it was likely the big players would want to do a deal to avoid the mandated process. “In Canada, deals are being done everywhere. They’ve just done 150 deals because they don’t want to go legislation.”
Stuff chief executive Sinead Boucher said she was pleased the Government had recognised the “significant power imbalance” between publishers and the platforms.
Stuff is part of a collective of New Zealand media seeking to bargain with Google and Meta but Boucher said the process had not yet turned up anything near a fair offer. Fair deals had only been struck in countries where there was legislation or the threat of it, she said.
Canadian MP Peter Julian quizzes Google Canada’s Colin McKay during a hearing on Canada’s media-funding bill.
Boucher said it was a strong move to support the local media industry.
“For too long the platforms have been able to use journalism made and paid for by publishers to help build businesses of near unimaginable scale and power. Off the back of content invested in and created by others, they have been able to capture the vast majority of the digital advertising market, undermining the sustainability of local publishers and local journalism,” she said.
“We want a deal for the whole industry – publishers large and small – that represents a fair exchange for the value the platforms get out of using our content to allow us to keep investing and developing high quality New Zealand journalism.We look forward to seeing the shape of the legislation when it is introduced [in the New Year],” she said.
NZME, which publishes the NZ Herald among other mastheads, reached its own agreement with Google and Facebook earlier this year.
It said in a statement it would review the proposed legislation to determine what impact it would have on that agreement.
“We are supportive of the government legislating as it ensures the future sustainability of our local news media and contributes to a healthy media ecosystem. We look forward to continuing our constructive engagement on the matter,” said Michael Boggs, NZME chief executive.
Canada’s Online News Act, which is currently in front of the Canadian equivalent of a select committee, would require “digital news intermediaries”, intended to include Google and Meta, strike funding deals with news organisations if they facilitate access to their content in any way.
Google’s head of public policy in Canada, Colin McKay, told the Standing Committee on Canadian Heritage in October that the Australian regime, which Google had initially opposed, was “a workable solution”.
But he said it had serious concerns with the Canadian approach.
That was in part because it defined news businesses that would be eligible for the support extremely broadly and did not require they adhere to “basic journalistic standards”, he said.
That could mean Canada’s media funding law led to the proliferation of misinformation and clickbait and that Canadians could “be served foreign propaganda outlets alongside reporting from Le Devoir or The Globe and Mail,” he said.
Meta’s global policy director Kevin Chan objected to such laws more generally, saying the presumption that Meta unfairly benefited from its relationship with publishers was untrue and that it was instead providing them with “free marketing”.
“A policy that unfairly subsidises legacy media companies now struggling to adapt to the online environment is an approach that will harm competition, reduce trust in media and make the transition to digital models even more difficult,” Chan said.
He went on to say that Facebook could be “forced to consider whether we continue to allow the sharing of news content on Facebook in Canada”.
Google and Facebook-owner Meta fought a rear-guard battle against a similar law change in Australia before a compromise was struck.
Australia’s News Media Bargaining Code effectively forced Google and Meta to negotiate deals with the media under threat of having them imposed by an arbitrator appointed by the Australian Media Communications Authority.
Rod Sims, a former chairperson of the Australian Competition and Consumer Commission, has said that law resulted in Google and Meta agreeing payments worth more than A$200m (NZ$212m) a year to the media there, though neither company has confirmed that figure.
Google announced in 2020 that it had budgeted US$1 billion (NZ$1.6b) over three years to licence content from publishers around the world in a step that was widely viewed as an attempt to stave off regulation globally.
In August, as part of that initiative, it struck deals with New Zealand Herald owner NZME and RNZ to purchase the right to use content supplied by them in its Google News Showcase app.
The two agreements, believed to be worth a total of a few million dollars a year, lets Google users freely browse a selection of news stories, including some paywalled NZME content, provided and curated by the publishers.
But the launch of Google News Showcase in New Zealand left other major media firms including TV3 owner Warner Bros Discovery, Stuff and TVNZ in the cold.
Jackson had signalled in August that Google’s deals with NZME and RNZ provided insufficient support to the media and that he was running out of patience, saying “we need as many agreements as possible and they need to be quality agreements”.
Earlier this month, the Commerce Commission gave other independent, locally-owned media outlets, including Stuff and Allied Press, permission to negotiate with Google and Meta as a block.
But to date, no further deals are believed to have been concluded.