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The ABC's Awful Meta/Facebook Dilemma

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7 May 2024


The ABC now faces an awful dilemma.

If, as now seems certain, it loses the media bargaining code revenue it has been receiving from Facebook, now Meta, it will have to sack many of the 60 journalists and support staff it has recruited since entering into commercial contracts in 2021.

The ABC is legally obligated not to reveal the quantum of the revenue it receives from either Meta or Google. But it can fairly be speculated that a workforce payroll of 60 with associated capital costs - offices, broadcast and telecommunications tech and production resources - would cost up to $30m in operational expenses per annum.

We guess that Google pays more to the ABC than Meta so exactly what the impact of the loss of Meta revenue will be on jobs and services will not be known until the dollars stop dropping into the ABC’s BSB.

These global tech platforms reluctantly negotiated payment arrangements with mainstream Australian media outlets including the ABC (but not SBS or The Conversation) rather than face being “designated” by the federal Treasurer under what was called “world-first” legislation passed with bi-partisan parliamentary support after an investigation by the Australian Competition and Consumer Commission, then headed by Rod Sims. Sims and the ACCC had found there was a competitive imbalance which enabled Facebook and Google to exploit for free the original content created by local media outlets at their own great expense. The legislation lays out heavy financial sanctions after “designation” following the Treasurer’s review of applications by news media outlets claiming commercial and market disadvantage.

Before the mandatory media bargaining code law was passed such was the marketplace impact of the “competitive imbalance” that both metropolitan, but particularly regional media outlets, had their businesses destructively disrupted. An estimated 3,000 newspaper journalists were terminated in restructures and downsizings, obliterating traditional career paths and leaving many regional communities without any local coverage as dozens of newspapers closed down.

By 2021 Google and Meta, with their algorithmic strategies devised from data mining, had achieved great precision in targeting advertising right down to individual users from analysing their search, browsing and consumption patterns. The platforms were now “hoovering up” advertising revenues which had sustained the traditional news media business model for decades. Advertisers could see in real time the effectiveness and incoming dollar impact of their tech platform ad spends in a rapidly evolving digital economy. Meta’s 2023 gross revenues from Australian advertisers were reported to be $A1.34billion. By April 2023 there were 21,904,700 Meta/Facebook users in Australia - 81.2% of our entire population, 53.2% women.

Australians took to Facebook’s free subscriptions with gusto posting their engaging photo, video and audio content to family and friends and the wider world. All Australian media outlets started their own Facebook pages. New businesses were started on Facebook alone, soon expanding to Instagram, Pinterest, TikTok, where potentially vast local and global audiences could be accessed for free with audience reach enhanced by your own paid advertising. Yet more revenue for the platforms.

With Rupert and Lachlan Murdoch’s News Corporation and the now merged Nine and Fairfax newspapers lobbying heavily, then Treasurer Josh Frydenberg accepted Sims’ ACCC recommendations and introduced the media bargaining code.

Originally the ABC was not to be included in the revenue sharing but the Morrison government, profoundly hostile to the ABC, changed tack when it became clear it needed the Senate cross bench numbers to get the laws through the parliament.

ABC managing director David Anderson negotiated the Meta and Google deals in November 2021 on the mutually agreed proviso that the money would be spent “supporting regional and rural public interest journalism”.

With the Meta/Google money, Guardian Australia greatly expanded its reporting staff and state-based services.

The ABC received 580 applications, mostly from qualified locals, for new reporting roles in every state and the Northern Territory. The ABC opened its first bureau in Charleville added to ten new locations: Batemans Bay, Warragul, Carnarvon, Hervey Bay, Gladstone, Whyalla, Northam, Swan Hill and Victor Harbour. The ABC also applied the new money to boost reporting numbers in nine existing bureaux in Horsham, Burnie, Dubbo, Wagga Wagga, Katherine, Esperance, Karratha, Longreach and Toowoomba.

“It will mean more stories, better coverage and specialist reporting on the issues that matter to people living in the regions and important insights into regional and rural Australia for people residing in Australia’s capital cities”, Anderson said.

Now all that is in jeopardy with Meta’s Mark Zuckerberg announcing that the platform would not be extending existing news media contracts in Australia beyond their current terms this year.

It did not need or want Meta users to post any articles or news video or audio. A Meta spokesman was quoted by Nine outlets in March saying its subscribers did not use the platform for news in any event. “It doesn’t make sense to invest in areas that don’t align with consumer preferences.” Australian publishers could continue to use its free services if they wished.

NewsCorporation Australasia reportedly sent its yearly $100million from the tech platform revenues to its head office in the USA and now, through consultants, plans a downsizing restructure to be blamed in large part on the expected loss of Meta revenues this year. Instead of using the money to enhance its own local coverage this conduct seemed cynical and may in fact have provoked Zuckerberg to perceive and judge the Australian bargaining code legislation as a Murdoch “shakedown” delivered via captured political friends.

This became more evident when Meta refused to negotiate a revenue arrangement with both SBS and The Conversation. The ACCC was reportedly furious, but it was not able to force “designation”.

An acerbic industry insider has told me : “The deal was really designed for News, Nine and Stokes. At that moment Facebook knew that the government would cave”.

Nine Entertainment chairman Peter Costello recently and publicly denounced the Zuckerberg decision to opt out of the bargaining code contracts as “an existential moment” for Australia’s news media.

Guardian Australia reported on May 5 UTS/RMIT analysis that Meta appeared to have calculatedly adjusted its algorithms to reprioritise news posts which over time had resulted in a marked decline in traffic from Meta/Facebook to news websites. Guardian Australia reported it had now updated this analysis which showed that “engagement with posts from Australian media is now at an all-time low”.

For the ABC, the issue is not just the revenue and its use for local and regional coverage. The tragedy is that if it loses the money there will be no coverage in areas that commercial media have already deserted. The current federal government is likely to be asked by the ABC to fill the coming hole in regional coverage but the problem seems to go much further.

It is to do with audience reach via now all-consuming digital devices as broadcast radio and television audiences decline. With more people only accessing ABC content via the digital platforms, the ABC is at risk of losing audiences forever. With over 80% of Australians regularly using Meta/Facebook the platform commands crucial online traffic flow to the ABC’s free and branded content. Lose that access to eyeballs and ears and the ABC fails its Charter obligation to enhance Australian identity and democracy through information, education and entertainment.

At the moment there is no alternative to Meta as a user-friendly platform at critical mass. The ABC does not have the means or the political support to start its own version of Facebook for non-commercial purposes. Although the Albanese government has recently rolled what was “tied” money for “enhanced news gathering” in regional Australia into recurrent quinquennial (five year) operational base funding, there will be nothing in the kitty to replace the lost Meta money and the essential services to which that money has been put.

The ABC has not yet indicated if it wants the Albanese Government to use its power under the bargaining code to bring the issue of competitive imbalance to a head by “designating” Meta. Meta is declaring it is vacating the news content user feed completely so the code does not and should not apply to its services. It seems prepared to fight this out in the Australian courts if necessary. Designation by the federal Treasurer could in fact kill the goose that for three years has been laying the golden revenue egg for Australian news media.

Mark Zuckerberg seems to want to take all he can get from Australian advertisers and consumers and give nothing back.

Last month Nine’s communications correspondent Calum Jaspan reported that of the $1.34 billion Meta Australian gross revenue in 2023, $1.14billion was repatriated offshore through a “purchase of services” agreement for ad space. Meta paid Australian tax on profit from only the remaining declared revenue.

For Google the pesky Australian bargaining code may require a more considered response. As far as news media is concerned Google is essentially a search engine which certainly exploits all content creators even if only via links to paywalled content to news media websites. As the ABC’s content is already free the only leverage the ABC retains is that its content is supposedly protected by the Copyright Act and use by third parties requires negotiation and payment for that usage.

Meta has already withdrawn from carrying news media content from its Canadian users’ pages after the Trudeau government tried to follow Australia’s lead with its own media bargaining code.

Canada has yet to announce any counter measures to support its own local news media.

We await our own federal government’s counter measures. The ACCC is currently auditing Meta’s use of news content to check the accuracy of its statements before making recommendations.

Treasurer Jim Chalmers has recused himself from this dispute declaring a conflict of interest as his spouse is a News Corporation employee. Any “designation” of Meta or other counter measure would be at the ministerial discretion of assistant treasurer Stephen Jones.

It is pertinent to note here that the newly appointed chairman of the ABC, Kim Williams, is a former chairman of the statutory Copyright Agency which collects licence fees for the reuse of text and images and distributes these as copyright royalty payments to registered “creator members”. The agency issues licences to commercial businesses across all sectors of the Australian economy and collects fees for distribution.

In a 2020 webinar Williams was critical of the Frydenberg/Sims application of competition law to address the destruction of Australia’s news media industry by the engorged tech platforms, preferring the collective agency model.

Over to you Mr Jones.

It’s now Meta versus Australia.


Quentin Dempster, a journalist and author, is a director of ABC Alumni Ltd.

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