Media closes in on tech giant cash

Media closes in on tech giant cash, illustration photo

Australia will become the first country to impose a legal regime including financial penalties for digital platforms that profit from content produced by news media. The federal government instructed the country’s competition watchdog to develop a mandatory code of conduct for digital giants to adhere to.

The move comes as the media industry reels from tumbling advertising revenue, which was already in decline before the coronavirus outbreak collapsed the market.

Last week, New Zealand’s media companies implored its government to redirect advertising from the likes of Facebook and Google to provide cash relief, while special tax status and different ownership models should be considered as longer-term solutions.

Tech firms have put journalism on edge for years. In Australia, the number of reporters and news sites since 2014 has dropped 20 per cent as digital advertising revenue was conquered by the titans.

Indeed, the global journalism industry has been suffering the same dilemma. In France, antitrust authorities have also ordered Google to negotiate with publishers to pay for the news content shown in search results. Thanks to using the contents of entertainment and news articles for years, Facebook and Google have earned billions of US dollars in annual advertising revenue globally.

With such a great extensive user network, the platforms have become the only effective promotion tools for content creators across the globe. Nevertheless, their earnings did not live up to expectations because major advertising revenue for the contents goes to the wallets of the tech titans.

Despite papers being largely responsible for the success of the platforms, Facebook and Google are still averse to sharing revenues to the press or other content creators, as proposed by the EU commission in 2016. It is nearly one year since the EU approved a new copyright law that required firms to cut licensing deals with creators so they are paid when people share their contents from 2021 onwards. However, the platforms have yet to show any signs of co-operation with the EU to actually carries out the law.

Indeed, previously in Germany, Axel Springer SE – the owner of German newspaper Die Welt and the tabloid Bild – requested that Google pay fees for quoting content from its newspapers. However, Google decided to simply stop quoting the newspapers. Similarly, Spain passed an intellectual property law outlining copyright fees payable to newspapers after sharing their articles. As a result, Google halted its news business in the country.

Under the pressure of the pandemic, damage to news agencies across the world is growing more serious. According to the newswire HuffPost, nearly 33,000 employees in the sector have lost their jobs or had wages cut in recent months. Small-scaled agencies were closed due to having no ability to survive during the health crisis. Even the New Media Alliance called on the US congress to approve a financial support package in order to avert mass dismissals.

Moreover, the UK-based research company Enders Analysis forecasts the downturn of 50 per cent in advertising revenue of presses in Britain this year. Total damage at newspaper offices will hit more than $810 million.

In Vietnam, hardships during the pandemic have hampered local papers. According to the Vietnam Journalists Association, many local news agencies saw a plunge of 40-50 per cent in earnings of distribution and adverts. On April 7, the association filed a document to the prime minister with the hopes of receiving support from the government.

As COVID-19 continues to cast a shadow across the globe, Google recently announced a journalism emergency relief fund aiming to partially ease some burdens for news agencies during the health crisis. Yet The Guardian compared the act to “throwing a few planks of wood to those in the middle of a tsunami”, especially as along with Facebook, Google has caused global journalism to remain stuck in the mud for years.

To help the sector overcome the challenges, many governments agree that tech firms have to work with press agencies to reach a common voice about payment for journalistic contents. Meanwhile in Vietnam, materialising this is a great burden for local policymakers, in addition to charging full taxes from the tech platforms.

Discussing the issue with VIR, Nguyen Thanh Ha, chairman of law firm SB Law, said that as the digital economy is gathering speed, local lawmakers are under increasing pressure to issue policies on supervising content on social networks. “Violations of the Law on Intellectual Property have been rampant on the internet and social media. The local regulations are not strict enough to deter violations,” Ha said.

Accordingly, social awareness on intellectual property for intangible products is still limited, resulting in local policymakers being some distance from developing regulations related to these kinds of goods. It is a big gap that tech platforms like Facebook and Google take advantage of to earn huge income in many countries, including Vietnam. As a result, their acts of using news contents to earn advertising revenue avoid local government punishment.