Finally…someone gets tough on Facebook

TUESDAY COMMENTARY

Prime Minister Jacinda Ardern is rightly being praised for her handling of the Covid-19 pandemic but she needs to get over her Millennial attitude to social media and join Australia in making them pay their way.

Canberra has announced a tough mandatory code to make Facebook, Google and others pay for the news content that have been pillaging from news media’s digital platforms. New Zealand should do the same, preferably adopting the same code for a trans-Tasman approach to regulating companies that thought they were beyond the reach of mere governments. So far, our government has gone no further that saying ‘we’re looking at it’ but characterising it as ‘a longer-term measure’.

Australian Treasurer Josh Frydenberg wants a code developed by July and, if the tech giants do not negotiate payment rates in good faith, rates will be imposed. There will be heavy financial penalties for non-compliance. Expect the code to be in place before the end of the year.

Frydenberg is reflecting the frustration that the Australian Competition and Consumer Commission expressed in trying – and failing – to implement a voluntary payment system. The ACCC was tasked with facilitating a voluntary regime last year after the federal government’s social platform enquiry found Facebook and Google were using an unregulated space to cannibalise and profit from content produced by the news media. Google and Facebook only paid lip service to negotiations with the media companies. Now they have no choice but to come to the table or face the consequences. And it’s about time.

Internationally, the social media giants contrive to avoid both tax and regulation, to say nothing of providing platforms for the spread of disinformation – most recently about Covid-19.

Jacinda Ardern talked tough after the live streaming of the Christchurch mosque shootings and made some headway in encouraging the large social media platforms to more closely monitor such content. However, they agreed only to act in ways that had the least impact on themselves. Otherwise, it was business as usual.

And that business is doing harm – perhaps terminal harm – to New Zealand’s mainstream media companies now reeling from the vertical drop in advertising revenue during the Covid-19 lockdown. Foreign social media companies are siphoning off a minimum of three-quarters – some say 90 per cent ­– of the $1.26 billion spent on digital advertising in this country.

Yet the Prime Minister’s reaction to calls – mine included – to redirect to local media the Government money spent advertising on Google and Facebook was a flat rejection: “We need to be present where people are”.

Of course the government needs to reach people, especially in perilous times. It does not need Facebook and Google to do that.

Oh, it might need Facebook, Twitter, Instagram, Snapchat, WeChat and TikTok to ‘talk’ directly to supporters and potential supporters. The president of the United States does so every day on his medium of choice – Twitter.

Such use, however, has less to do with ‘reach’ and more to do with the fact that the platforms can be used to deliver political messages without the irksome intervention of journalists who might ask awkward questions.

When it comes to advertising the functions of government, and messages associated with them, local media can provide all the ‘reach’ the government needs.

The fact that all news media report unprecedented demand during the Covid-19 pandemic did not seem to impress the Prime Minister, doubtless seduced by the belief that 18-54 year olds don’t access traditional media. However, if the ‘target audience’ do not pick up a newspaper and watch or listen to news bulletins, they are certainly exposed to traditional news content through digital media.

In the week the lockdown was announced, the five largest traditional media organisations – Stuff, NZME, TVNZ, MediaWorks and Radio New Zealand –  together reached 32 million unique browsers on their own websites. To that can be added the same content shared on social media and, of course, through their traditional forms of delivery.

There is no reason why government advertising cannot be embedded in those news stories and carried wherever they may go – but the money stays with the organisation that created the content. As it stands, the amount the government spends on sites like stuff.co.nz and nzherald.co.nz (the two largest news sites) is a pittance.

And, if we go back before the pandemic, was the money spent on Facebook in search of 18-54 year olds well-spent anyway? A recent New York Times article (on Facebook’s Covid-19 resurgence) described its pre-pandemic status in these terms: “Facebook could feel at times like the virtual equivalent of a sleepy bingo parlour — an outmoded gathering place populated mainly by retirees looking for conversation and cheap fun”. In other words, it wasn’t the audience everyone was paying for. That’s a good reason for re-directing of government spending into our own news organisations.

Re-direction, and forward spending on government advertising were two suggestions for immediate aid to a vital industry that is sinking to its knees in the lockdown.

The Australian initiative on payment for content use is a longer term and potentially more rewarding measure. It should embrace public and well as private sector media as both pay to generate content that is appropriated by social media. And, on the face of it, the social media platforms will have no choice to comply. The threatened financial penalties for non-compliance are likely to be onerous (even for them).

There is, however, one worrying dimension to the tech giants’ behaviour that could yet thwart Josh Frydenberg’s entirely equitable plan: Their ability to use every trick in the book to avoid compliance.

And the trick they have up their sleeve is encryption. In 2014 Facebook acquired the end-to-end encrypted messaging service WhatsApp for $US19 billion. That service now has more than two billion users globally and monitoring of its content is well-nigh impossible. It has become a prime mechanism for spreading disinformation, in spite of moves to limit the number of direct contacts. Network connections allow for exponential growth from small beginnings.

Facebook has signalled its desire to widen its use of encryption which, it says “is helping to protect you from hackers and criminals”. Could it also protect Facebook from the effects of a mandatory payment code? US Attorney General William Barr has voiced concerns about encrypted messaging being used by criminals and terrorists, but this may not stop a move to encrypt it. There are no certainties over policy in the Trump Administration. A perception that an American company was being picked on by ‘foreign powers’ might lead, for example, to turning a blind eye to its attempts to avoid ‘being picked on’. The Administration might justify such an attitude by pointing out that the Dark Web, not mom-and-apple-pie social media platforms, is already the preferred delivery system for terrorists and criminals.

If Facebook did become an encrypted service (no doubt on the pretext of user security) it should mark the parent organisation as an outlaw – someone beyond the law – because that is where, effectively, it would be. And the only business a government has with outlaws is to call them to account.

Volte-face in changed times

In  a submission to the Epidemic Response Select Committee last week, I called for the fast-tracking of processes that could allow NZME and Stuff to merge. I was acutely aware at the time that this was a contradiction of the stand I had taken in a submission to the Commerce Commission opposing the original merger application.

The main grounds on which I had opposed the merger were that nothing stopped a subsequent takeover (perhaps by inappropriate interests), and that there were no safe-guards to prevent single control of the editorial policies  of all of the publications in the merged organisation. The latter, I said, was an unacceptable aggregation of power.

After my select committee video appearance, a correspondent quite rightly called on me to account for my change of heart. I explained that, although the principles were still valid (and caveats could be imposed on the merger), circumstances had changed. It was possible that, in the fallout from the Covid-19 pandemic, the Australian owner of Stuff would decide to cut its losses in New Zealand and simply walk away. Bauer has already pulled the plug on its iconic New Zealand magazine titles. I figured it would be better to have the DominionPost, The Press and their stablemates under the NZME banner than not to have them at all.

And I added: “There is no point in sticking to your principles if there nothing left to be principled about.”

Stuff’s appeal to readers

In that select committee submission I made no bones about the strife facing our news media. I called in an existential crisis. I also looked more optimistically to the future and a time when new ownership and funding models could emerge.

Yesterday, we saw a precursor to such changes with Stuff going to its readers for direct financial support. That support is in the form of $10/month, $100/year or “$ you choose” through the PressPatron platform.

Stuff’s chief executive, Sinead Boucher, said: “We need to rely more directly on the support of readers. Kiwis have supported us in many ways over the years, through advertising, reading and subscribing to our content, and we have always been grateful for that patronage. Contributions from readers is simply a new way Kiwis who value what we do can choose to support us and the journalism our newsrooms around the country produce…We’ve seen the reader contributions model at work in many respected international and local media companies. We hope people who choose to support us will do so because they value the role of journalism in our society and want it to continue.”

I am a firm believer that people should pay for the news they consume. I have signed up.

 

 

5 thoughts on “Finally…someone gets tough on Facebook

  1. HEAR HEAR!!! And please keep saying this – the social media giants are rorting the world – to the benefit of the ir mainly US shareholders

  2. To what extend has poor decisions making prior to this pandemic expedited the demise of NZ media?, The quality of NZ Journalism is debatable as so many publishers copy and paste from aggregated new sources, how will law differentiate as to what is vanilla content and regurgitated? and lastly to my mind the ownership model is flawed and cannot sustained even with intervention, independent newspapers are doing well as they do not have the corporate overheads, i am very interested in your feedback to my points raised

    1. James you make some valid points. Can I suggest you look at the submission I made to the Epidemic Response Select Committee (it is here on the website). You will see that I acknowledge much of what you say and see the payment for content as an interim step. Ultimately I envisage a complete resetting of the media landscape and the replacement of outmoded structures and ownership models. Leaving aside the frailties I’d present media, I think there is an enduring principle at stake: If you benefit commercially from a product, you should contribute to the cost of its creation.

  3. What is the real endgame here? Traditional media wants social out, so they can feed the masses with their opinions and control the narrative. Or it is perhaps that the government can better control the narrative? Younger generations just aren’t interested in curated news like their parents and grandparents, I don’t think I’ve ever bought a newspaper, I no longer watch free to air tv because the ads are just annoying and irrelevant, I will read an online article by NZ Herald (less so stuff, spinoff is just woke nonsense), but I would never pay for it (not even the $2.50 or $5 being asked, not a week, month or year). I would much rather go without media agencies trying to fill my head with the latest BS.

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