News media hoping for a win against tech Goliaths

Allied Press, publisher of the ODT, has made a submission on the Fair Digital News Bargaining Bill.
Allied Press, publisher of the ODT, has made a submission on the Fair Digital News Bargaining Bill.
This week will be a momentous one for the news media in New Zealand.

That may seem an odd thing to say, given news is always dynamic and no week can ever be called "quiet". But in this case, a three-hour hearing in one of Parliament’s meeting rooms has the potential to change the game for our news companies.

On Thursday, the select committee for economic development, science and innovation will listen to submissions on a piece of legislation that has been carried over from the last government, the Fair Digital News Bargaining Bill.

In essence, if passed, this legislation would require big tech companies — such as Google, Meta (which runs Facebook and Instagram) and Microsoft — to sit down and negotiate with New Zealand’s media companies, to pay them for using their news content. At the moment, only Google has signed agreements with various media companies here, and they only last for up to five years.

One of the core arguments is whether news is of value to the likes of Google and Facebook. Let’s take Google as an example. Major stories bring people into the Google ecosystem. News is one of the five icons under the search bar. If you look at the top news stories for Google search in New Zealand in 2023, four of the top five were Cyclone Gabrielle, the national election, Census 2023 and Auckland Airport. The information on those topics will have largely been written by journalists employed by New Zealand media companies; Google has no journalists in New Zealand.

Our media companies know news is a core component of Google search, but there is nothing to compel Google, or any of the other big tech companies, to sit down and negotiate a fair payment for the use of that news.

Is New Zealand worth it to Google? Its business here reported revenue of $78 million in 2022, but it also paid its parent company in the United States a service fee of $870m, which is excluded from that revenue figure. A small country of 5million people delivers nearly $1billion of value to Google.

The same applies to the world of social media, dominated by Facebook, where users are encouraged to share news that draws or keeps more people in the platform, enabling Meta to generate advertising revenue.

Fundamentally, these digital platforms have free and unfettered access to New Zealand’s quality journalism, and use that to benefit their own businesses.

The development of artificial intelligence products, such as ChatGPT, will only accelerate this problem. This technology, when used to respond to search queries, can see complete answers provided with no link back to the source that produced the information in the first place — quite likely a newsroom. Again, there is nothing in New Zealand law that requires OpenAI, the tech company behind ChatGPT, to sit down and pay our media companies for the use of their intellectual property.

This isn’t a case of sour grapes. There is a distortion of the digital market worldwide, where some of the largest companies in history are able to dominate search and social media and, as a consequence, use news content to their benefit without paying for it.

In New Zealand, just 10 cents in every dollar spent on digital advertising goes to this country’s news companies. It is no wonder the number of journalists available to keep us informed, and challenge those in power, has declined dramatically in the past two decades.

This type of legislation is not new. There are now live examples in Australia and Canada, and other countries are considering the same.

In Australia, it is now estimated that Google and Meta are paying more than $AU200m a year to its media companies, equivalent to about 20% of the cost of Australian journalists’ salaries.

If New Zealand’s media companies were able to strike fair deals, as recompense for the news generated by their journalists, it would be a game-changer for every media company in New Zealand.

The payment for content would still only represent a fraction of the investment these companies make in journalism but it would mean those benefiting from its creation would be paying for what they use.

This is just a fair go for those who have invested in their local communities, employing local people and covering the towns they live in, only to find the content they create is stripped away and used by global platforms without payment.

For our small, locally owned publishers — think the Gisborne Herald,  the Wairarapa Times-Age,  Whakatane Beacon,  the Westport News, or the Ashburton Guardian — an additional 20% in revenue would be the difference between struggling to survive and being able to see beyond the next two years and invest more in providing news for their local communities.

New Zealand’s journalists are, after all, our first responders when it comes to news about major disasters, whether they be floods, volcanic eruptions or earthquakes. But they are also there for important day-to-day news such as local councils, courts, sports and events.

On Thursday, each speaker will only have 10 minutes with the select committee. Anyone can log into the livestream to hear what is said — check Parliament’s select committee page for a link. In the submission from Allied Press, the publisher of the Otago Daily Times, its chief executive officer Grant McKenzie, said it was a regionally based media organisation that does not have the economies of scale some of its competitors have, and it would be very concerned if the legislation was not passed.

The select committee will then forward a report to Communications Minister Melissa Lee, and it will be up to her whether the Bill needs amendments before going back to Parliament, or it goes no further.

For the sake of journalism in New Zealand, we certainly hope it’s the former.

 Andrew Holden is the director of public affairs for the News Publishers’ Association, which represents large and small publishers across New Zealand, including Allied Press, publisher of the Otago Daily Times.