Independent digital publishers that have benefitted very little – if at all – from the News Media Bargaining Code say their business models would be severely impacted if the Meta pulled news content from its platform in Australia.
The Daily Aus (TDA), a news service for Gen Z that spawned from Instagram, said that it has already lost $450,000 worth of commercial advertising agreements with clients due to Meta’s previous threat it could ban the distribution of news on its platform.
The Daily Aus has an audience of 3 million with 2.2 million aged between 18 to 35 years old. In a submission to the Joint Select Committee on Social Media and Australian Society, The Daily Aus noted that two-thirds of Gen Z rely on social media as their primary source of news, with Instagram the most popular channel, and a quarter of the population use social media as their main source of news.
“Polls indicate a significant portion of TDA’s audience would cease consuming news if it were not accessible on social media, underscoring the critical role of platforms like Instagram for news dissemination,” the submission stated.
“Meta’s designation will likely lead to the removal of all news pages, including TDA, from its platform. This will severely harm TDA, which did not benefit financially from NMBC deals but will face significant consequences from a news ban. This outcome will cause job losses for young journalists, the disappearance of vital Australian stories, and disengagement from democratic processes among TDA’s audience of over 3 million Australians, primarily aged 18-35.”
The Daily Aus has taken steps to diversify how it engages with audiences by growing a daily newsletter, which now has 200,000 subscribers, a podcast (120,000 listeners per month), website, game, TikTok and YouTube channel.
In spite of these efforts, Instagram accounts the lion share of its audience, the publication claims 70 per cent of Aussies aged 18-35 read a post by The Daily Aus on that platform.
Meta shutting off the news tap could have a detrimental impact on the publication.
“The potential ban on news content on Meta’s platforms would have severe commercial implications for TDA. Its business model relies on monetising our social media audience through meaningful commercial partnerships, which directly funds our journalism,” the submission said.
“A 50% revenue cut as a result of TDA’s removal from Meta would necessitate staff redundancies, limit our ability to provide free news, and stifle future growth and technological innovation. This operational setback would be a major blow to diversity in the Australian media, reducing the variety of voices and perspectives available to the public.”
Indies will be hit hardest
Entertainment, food and drink and lifestyle website Broadsheet reported a similarly bleak outlook if Meta blocked news from its platforms.
“This will result in devastating consequences for Broadsheet’s business and publishing businesses like ours. We estimate that Broadsheet would lose up to 52% of its revenue, which would make it nearly impossible for the business to survive,” Broadsheet said in its submission.
“In addition to the impact on independent publishing businesses, Australian audiences, consumers and small businesses will be significantly affected. Millions of Australians visit Meta’s platforms daily for content and news. Publications like ours offer professionally reported, trusted, and credible content on various topics, from hard news to community culture.”
Man of Many is another publisher that will take a hit if Met bans news on its platforms. About 20 per cent of its revenue is driven by referrals from Facebook and Instagram. Although the anticipated reduction in referral traffic could decrease site visits by only 2-4 per cent, the publication estimates it could shed around 6.7 million social interactions per month, which it argues could hinder its ability to foster community engagement and maintain brand visibility.
In its submission, Man of Many stated: “As a direct consequence of the Code, and similar legislation being proposed overseas, the resultant algorithmic changes, implemented by the social media platforms, often implemented without advance notification, have further disadvantaged smaller publishers like us and adversely impacted news publishers in general. These changes have drastically reduced our content’s visibility, making it harder for us to reach and engage our audience. This lack of transparency and unequal access to critical information perpetuates the imbalance in the media landscape. It hampers our ability to compete on a level playing field and undermines the principle of media diversity, which is essential for a healthy and vibrant democratic society.”
Man of Many, and other digital publishers, propose another alternative to get Big Tech companies to fund journalism – a tax on digital advertising revenue.
“To ensure large social platforms contribute fairly to the media landscape, we recommend taxing digital advertising revenues from major platforms like Meta and Google, via a flat tax on digital advertising revenues and not profits. These funds should be redistributed to support public interest journalism and diverse independent publishers,” Man of Many said in its submission.
Whether taxing multinational companies that typically siphon most of the revenues they book in Australia into subsidiaries in lower tax regimes abroad proves effective remains to be seen, but the impact of Meta pulling news is all too real for the indie cohort.
The Digital Publishers Alliance, which represents both publications and dozens more independent publishers, said that the independent publishing sector would suffer the most if the Government pressed ahead with designating Meta, and that 18 per cent of its members’ traffic come from Facebook referrals with some titles up to 50 per cent.
“Eighty per cent of publishers said that if Meta were to remove news from Instagram and Facebook it would have a significant, or extremely significant, impact on their business,” the DPA’s submission said.
“Referral traffic from social media platforms is just one way of measuring the importance of them to digital platforms. Many digital publishers have been encouraged and courted to use social media platforms like Instagram and Facebook to amplify advertising and sponsorship partnerships.
“The impact of a Meta news ban would be devastating for many smaller and independent publishers. It would cut off access overnight to millions of Australians who have followed, liked, commented and interacted with digital publishers on Instagram and Facebook. It would result in immediate job losses for small and independent publishers and affect the long-term viability of many businesses.”
Meta’s position unchanged
Meta doubled down on its decision to walk away from commercial news content deals with publishers when current deals expire between May and December this year.
In its submission, Meta said that the number of daily active users of Facebook News in Australia dropped over 80 per cent in 2023, with a similar drop off in the US.
“The amount of referral traffic to Australian news publishers from Facebook Feed has declined over time. We have at various points reported figures publicly which show this. For example, we have reported that there were approximately 5.1 billion organic referrals or clicks in 2020 from Facebook Feed to Australian news publishers, which declined to more than 3.5 billion in the 12 months to March 2022, which declined again to more than 2.3 billion in 2023 due to the continuing shift in user preferences.”
Meta has argued that only 3 per cent of content consumed on its platforms are news and that news content deals are no longer a priority for the social media giant.
Australian publishers have disputed these claims with News Corp Australia chair Michael Miller labelling them “preposterous”.
A US study by the Pew Research Center also challenges the 3 per cent figure. It found that 37 per cent of users on Facebook and 33 per cent on Instagram believe getting news on these platforms is the reason why they use the platforms; the figure was 65 per cent for users of X (Twitter) – see charts above.
However, of these only 7 percent on Facebook and 8 per cent on Instagram cited this as a ‘major’ reason while 30 per cent on Facebook and 25 per cent on Instagram said that news gathering was a ‘minor’ reason.
The loss of income from news media bargaining code deals – said to be worth $70 million each year for 13 Australian publishers – is already having an impact on the larger legacy publishers
Nine, Seven West Media and News Corp Australia have begun making dozens of roles, including editorial staff, redundant, citing Meta’s decision to walk away from content deals as one reason. Nine has also cut several titles, including Vice, Refinery29 and Gizmodo, from its portfolio.