Will the Australian Government kill small media outlets like Ausdroid?

Over the past few weeks Australia’s digitally inept Federal Leaders have engaged in their latest bout of boomerang rattling, namely in the form of the Mandatory Code of Conduct for digital platform and media companies. While we are used to our federal leaders being technologically illiterate, (eg somehow thinking the Laws of Australia could overrule the fundamental laws of mathematics?) to see the Australian Government publicly doing the bidding of large media organisations is a little discombobulating.

For those not familiar with the background the Australian Competition and Consumer Commission ACCC investigated the relationship between digital platforms, Google, Facebook, Twitter and even Apple News and content creators including large players like News Corp Australia and little operators like us. In the report, it was recommended that a voluntary code of practice be developed to govern the relationship between content creation and content discovery/ consumption on other platforms.

In a response to the sudden drop in advertising revenue that all advertising supported businesses were seeing post COVID-19, (remember that most large news outlets have their own ad sales business, they exist to sell their readers/ viewers to their advertisers, the same criticism they level at large digital platforms) the large Australia Media outlets were struggling financially. Enter the political allies of big business (and big media).

The Australian Federal Treasurer Josh Frydenberg and Communications Minister Paul Fletcher have ordered the ACCC to change the recommendations of the report and draw up mandatory guidelines that will likely see digital platforms have to “pay for snippets”. If this sounds familiar it’s because we’re not the first nation arrogant enough to try this, we’re just the latest.

Spain is the most famous example of all, which mandated a “link tax” as it was commonly known, where digital platforms would have to pay to list a media outlets content in search or their news aggregation products. Google instead pulled Google News out of the Spanish market and stopped showing snippets. The net effect on the news industry in Spain was negative.

The analysis of that event is complex, however, a report commissioned by the Spanish Association of Publishers of Periodicals showed that large media outlets, like the ones who advocated for the change, saw a net drop in traffic of about six percent, where small publishers (again like Ausdroid) who mainly fought against the legislation saw a fourteen percent drop in traffic.

That’s right, it hurt the smaller outlets who were against it more the the large players who pushed for it. Could that be the motivation? Could large media companies see an opportunity to clip the wings of their smaller competition?

The study revealed that the small reduction in potential revenue from people who will only read the snippet and move on is significantly outweighed by the new media consumers who are funneled to content creators by the large digital aggregation platforms. In short digital platforms were offering media outlets a free way of gaining new readership and increasing revenue, and the large media platforms wanted to be paid for that benefit.

So perhaps a system where a large and popular platform aggregates and centralises all internet knowledge and makes it easy to access, search and find might, in fact, benefit everybody? Those who create the content and those who make it find-able? That actually seems fair, no wonder the mega corporations are against it.

We are not necessarily against a code of conduct, specifically one that would stop the digital platforms charging for access to search results, or using their powers to somehow control or dominate the landscape. We would also be in favour of exploring how revenue sharing could be considered, that would make it easier to keep small media afloat.

However, the concerns of the large number of small independent news outlets are not what the Feds are advocating for. They seem to be advocating for their billionaire buddies who’s draconian business model has failed to keep up with the modern times and is now wanting someone else to pay for their lack of vision.

I know that sounds harsh, people work at these places, people with families (think of the children), but the people they should be angry at is their employers who have failed to remain relevant. Unless we all want to stand still technologically, disruption and changing of old powerhouses is just an inevitable part of the modern evolving world.

Yes, we may be biased, from every angle that we review this edit by the Federal Government Ausdroid will be worse off. The large platforms are more likely to just pull out then play along. Which we agree feels a little anti competitive, but while David may have defeated Goliath with a rock it’s well worth remembering that’s just an allegory, not an instruction manual.

We were looking forward to the discussion that a voluntary code of conduct could have brought, instead were now stuck with a mandatory direction intended to help the big incumbent media players and ignore the rest of us. Do you want to live in a world without snippets in search results? How about news aggregators like Google or Apple News not being available in Australia?