{"id":24005,"date":"2021-01-30T06:43:15","date_gmt":"2021-01-30T06:43:15","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=24005"},"modified":"2021-01-31T14:56:08","modified_gmt":"2021-01-31T14:56:08","slug":"the-old-news-business-model-is-broken-making-google-and-facebook-pay-wont-save-journalism","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/the-old-news-business-model-is-broken-making-google-and-facebook-pay-wont-save-journalism\/","title":{"rendered":"The old news business model is broken: making Google and Facebook pay won’t save journalism"},"content":{"rendered":"

Amanda Lotz<\/a>, Queensland University of Technology<\/a><\/em><\/p>\n

The federal government is talking tough about making Google and Facebook pay Australian news businesses for linking to, or featuring, these publishers\u2019 content.<\/p>\n

The digital platforms have been talking equally tough. Facebook is threatening to remove Australian news stories<\/a> and Google says it will shut off search to Australia<\/a> if the government pushes ahead with its \u201cmandatory bargaining code<\/a>\u201d.<\/p>\n

The code is meant to help alleviate the revenue crisis facing news publishers. Over the past two decades they have made deep cuts to newsrooms. Scores of local print papers have become \u201cdigital only\u201d or been shut down completely.<\/p>\n

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\nRead more:
\nDigital-only local newspapers will struggle to serve the communities that need them most<\/a>
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If legislated, the code will require the platforms to negotiate payments to news publishers, as well as disclose changes in algorithms affecting traffic to news sites.<\/p>\n

But the code is unlikely to do much to fix the crisis faced by journalism in the internet age. It isn\u2019t even a band-aid on the problem.<\/p>\n

The traditional commercial news business model is broken beyond repair. If the government wants to save the social benefit of public-interest journalism, it must look elsewhere.<\/p>\n

Newspapers didn\u2019t sell news, but readers<\/h2>\n

To understand why the commercial news model is so broken, we first need to recognise what the primary business of commercial news media has been: attracting an audience that can be sold to advertisers.<\/p>\n

Newspapers attracted readers with news and feature journalism that provided public value, but also information of interest such as weather forecasts, sports scores, stock prices, TV and radio guides and comics. Readers even sought out papers for their advertisements \u2013 in particular the \u201cclassifieds\u201d for jobs, cars and real estate.<\/p>\n

Before the internet the newspaper was the only place to access much of this information. This broad bundle of content attracted a wide range of readers, which the economics of newspapers \u2013 particularly the cost of producing the journalism \u2013 required.<\/p>\n

Why the business model is broken<\/h2>\n

Internet technologies introduced two changes that have dismantled the newspaper business model.<\/p>\n

They offered new and better ways to connect buyers and sellers, pulling advertiser spending away from newspapers. More than 70% of revenue<\/a> for a typical daily newspaper came from advertising. Before 2000 print media attracted nearly 60% of Australian advertiser dollars, according to an analysis for the Australian Competition and Consumer Commission\u2019s Digital Platforms Inquiry<\/a>. By 2017 it was just 12%.<\/p>\n

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Australian advertising expenditure by media format and digital platform<\/strong><\/p>\n

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Internet technologies also provided better ways to access the non-journalism information that had made the bundled paper valuable to a mass of readers.<\/p>\n

Readers also now access news in many other places, through news apps, aggregators and social media feeds such as Twitter, Reddit, Apple News, Flipboard and many others, including Facebook and Google. Research by the University of Canberra\u2019s News and Media Research Centre published in 2019<\/a> found just 30% of Australian news consumers accessed online news directly from news publishers\u2019 websites.<\/p>\n

The bargaining code doesn\u2019t solve the main problem<\/h2>\n

If Google and Facebook are \u201cto blame\u201d for news publishers\u2019 malaise, it is not in the way the bargaining code suggests. Separate from their linking to, or featuring, these publishers\u2019 content, the digital platforms are just more effective vehicles for advertisers seeking to buy consumers\u2019 attention. They serve ads based on consumer interests or in relation to a specific search.<\/p>\n

The simple fact is news publishers\u2019 core content is not that important to the platforms\u2019 profitability.<\/p>\n

Research by the Reuters Institute for the Study of Journalism during the 2019 UK general election<\/a> \u2013 tracking 1,711 people aged 18-65 across mobile and desktop devices for six weeks \u2013 found news took up just 3% of their time online (about 16 minutes and 22 visits to news sites a week).<\/p>\n

So if stories from Australian news outlets disappeared from Facebook or Google search results, it would barely make a scratch on their appeal to advertisers.<\/p>\n

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\n
\nRead more:
\nIt’s not ‘fair’ and it won’t work: an argument against the ACCC forcing Google and Facebook to pay for news<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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Save journalism, not commercial publishers<\/h2>\n

The Australian Competition and Consumer Commission\u2019s Digital Platforms Inquiry has rightly noted the revenue crisis has crippled commercial provision of public-interest journalism<\/a> \u201cthat performs a critical role in the effective functioning of democracy at all levels of government\u201d.<\/p>\n

But the core of the problem is that funding such journalism through advertising is no longer viable. Other solutions are needed \u2013 locally and nationally \u2013 to ensure its survival.<\/p>\n

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\n
\nRead more:
\nWeb’s inventor says news media bargaining code could break the internet. He’s right \u2014 but there’s a fix<\/a>
\n<\/strong>
\n<\/em><\/p>\n

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Commercial news organisations no longer offer value to advertisers. Instead of searching for ways to make an obsolete business solvent, efforts should focus on alternative ways to fund public-interest journalism.<\/p>\n

More funding for independent public broadcasters is one solution, and incentives for philanthropic funding and non-profit journalism organisations are proving successful in other countries.<\/p>\n

It\u2019s a global problem. To solve the crisis in Australia will require focusing on the core problem and thinking bigger than a bargaining code.<\/p>\n

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For transparency, please note The Conversation has also made a submission to the Senate inquiry<\/a> regarding the News Media and Digital Platforms Mandatory Bargaining Code.<\/em>\"The<\/p>\n

Amanda Lotz<\/a>, Professor of Media Studies, Queensland University of Technology<\/a><\/em><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Amanda Lotz, Queensland University of Technology The federal government is talking tough about making Google and Facebook pay Australian news businesses for linking to, or featuring, these publishers\u2019 content. The digital platforms have been talking equally tough. Facebook is threatening to remove Australian news stories and Google says it will shut off search to Australia […]<\/p>\n","protected":false},"author":44,"featured_media":24006,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[9388,483,619,9389,1764,1998,9387],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/24005"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=24005"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/24005\/revisions"}],"predecessor-version":[{"id":24016,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/24005\/revisions\/24016"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/24006"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=24005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=24005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=24005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}