In this guest post, Media-Wize’s Anthony Caruana (pictured below) probes the ACCC’s ongoing fight with the tech giants and says it might just be a case of too little and too late…
The ACCC has answered the rallying cry of major Australian media companies. Faced with plummeting advertising revenues, having spent most of the last 15 years standing like King Canute against the rising tide of online behemoths such as Google and Facebook, Big Media and the ACCC are now trying to regulate their way into some revenue.
The battle that should be fought is for the Australian Government to change the tax law so the profits made by global online advertising conglomerates can’t be easily siphoned offshore.
Those taxes could be used for the benefit of all Australians – perhaps they could even be used to help return the ABC and SBS budgets to a more reasonable level. Or maybe provide start-up funding to local publishing entrepreneurs who can create new platforms for us to read, watch and listen to news, current affairs, human interest and other features.
Traditional media businesses made the wrong decision two decades ago to ignore the disruption of the internet. Trying to regulate and claw back their advertising revenue from stronger, faster and more agile competitors is the equivalent of making all car makers provide compensation to blacksmiths for lost horseshoe revenue.
While large online powerhouses like Google and Facebook may not be the greatest corporate citizens, the use of regulation to compensate Big Media doesn’t make any sense. And our tax dollars could be put to far better use.
Publishers have always needed money. Up until the start of the millennium, that money came from two key sources; subscriptions and counter sales, and advertising. But about 20 years ago the internet entered the mainstream as a potential news source and publishers saw this as another advertising channel.
At the time, most media organisations did two things. They made access to news and other content free and they ‘threw in’ the online ads as a sweetener to the so called “rivers of gold” thinking that the revenue from their print ads would continue to come. But, in parallel, Google worked out a way to do algorithmic advertising that made advertising really cheap.
Add the ease with which new online publications could launch and traditional media organisations faced a massive assault. Content was being created and published on a previously unimagined scale and advertising space online was being sold in massive volumes at low cost.
Fast forward to 2020. Traditional media organisations want protection (saving?) because they made the asset that drew readers/watchers in free. The result of that was retraining the market to think content is not valuable. Hence the relatively low uptake of paywalls.
Throw in the arrogance/ignorance of media owners in the 1990s and early 2000s who never believed their advertising revenues could be touched and we are where we are.
While Google has been at the frontline of this debate, Facebook waded in over the weekend saying “Over the first five months of 2020 we sent 2.3 billion clicks from Facebook’s News Feed back to Australian news websites at no charge”. Add in Google’s search traffic and we are seeing the real crux of the problem.
Traditional media organisations have been beaten at their own game. Someone has found a way to sell ads more effectively and more profitably.
The Australian Government is now very late to the table in trying to support Australian media by attempting to regulate them towards survival. But, don’t overlook the fact that any money paid by Google, Facebook and others won’t be going to the ABC or SBS.
Instead of trying to regulate Google, Facebook and others into supporting existing media companies, the Government should be directing its efforts to closing tax system rules and loopholes that allow all businesses, and not just Google and Facebook, to siphon funds offshore into tax-free and low-tax havens. That’s the real problem that needs to be fixed.
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