Yaron Galai (pictured), co-founder and global co-CEO of Outbrain, has said that the News Media Bargaining Code “boggles the mind” and hopes that similar laws are not passed in other places.
Galai, fresh off the plane from New York, was chatting to B&T ahead of a panel discussion he featured on at SXSW Sydney.
“I know Aussies really love it, especially our partners in publishing. To me, it boggles the mind a bit, maybe it’s my American point of view,” he said.
The Code came into force in March 2021 and gave the Australian treasury the power to require large tech companies to strike commercial deals with large Australian publishers in order to link to their content in news discovery services. As it stands, no tech company has been officially “designated” and required to sign deals. However, Meta and Google have voluntarily penned deals with a range of publishers.
Mark Zuckerberg’s firm has called the Code an “untidy short-term compromise”. There is also some discussion about expanding the Code to cover TikTok, YouTube, Instagram, Snapchat and Twitter (or X, if you’re that way inclined).
“To me, the only eventual outcome of it is the Facebooks of the world and Googles say, ‘We’re not going to link to news any more and you’re on your own’. To Me, it’s so obvious that they’re going to try taxing links,” Galai continued.
“If you have your owned and operated publishing operation, what you want is people linking to you and sending traffic. That’s what you want to pay people for. So trying to flip it through legislation, to me, is just very strange… I hope these laws aren’t passed in other places”.
Galai has a large stake in this game. Outbrain’s native advertising tools for publishers rely on traffic, visibility and clicks on publisher sites. However, as he told B&T, Galai loves journalism. His first job was working at a newspaper in his native Israel.
“I was in the design department, so I was taping the actual articles together and getting the bromides and all that. They were idiots – they paid me for the job and they didn’t understand that I would have paid to do the job! For me, it was like working in a candy store,” he said.
However, in his mind, the way to support quality news journalism is not through charging the tech platforms to link to content. Instead, the value exchange between governments, tech platforms and publishers needs to be reexamined.
“Long term, they’re [the Code and Canada’s Online News Act] not good for publishers. But I’m not a publisher. They’re smarter than me. But, if countries do care about publishing as an industry and they think Google is making too much money and they want to put more taxes on Google and use that taxpayer money to subsidise news, I think that’s fine.
“But going after the folks that are linking in a big way, I’d say give us as many links as we can get”.
This misidentification of the problem is something that Galai has been telling publishers for years.
“I’m a tech entrepreneur. To me, in general, publishers are slow adopters. We gather up a bunch of publishers every year, about 50 of them from around the world. The first time we did this, about 13 or 14 years ago, my whole presentation to them was the same,” he recounted.
“You think that all of yourselves are competing with each other – News Corp, Nine and Fairfax. But your real competitor is Facebook. They all collectively said, ‘What the hell are you talking about?'”
Galai explained that publishers had misidentified that the battle they were facing was for user attention between journalism and social content. The News Media Bargaining Code, in his mind, doesn’t solve the problem of declining publisher revenues, it relies on an outmoded view of the publishing market.
Galai, however, doesn’t consider Australia to be behind the times – even saying that the market is “quite forward thinking” compared to some others that Outbrain operates in.
“Some of the bigger markets are sometimes much more conservative and their size makes them move slower. I think [Australia] has a sweet spot of some big global publishers but also a smaller and more nimble market,” he said.
There’s plenty of scope for innovation in the publishing market, believes Galai – but it’s only possible if those publishers are willing to innovate themselves.
