News publishers’ response to Meta’s decision to pull out of the News Media Bargaining Code has been labelled as “very predictable” and the “easy way out.”
Constantine Frantzeskos, chief growth and innovation officer at GrowthOps, told Mediaweek that it was “astonishing” that despite being a massive driver in traffic to news sites, Meta was being compelled to subsidy these outlets.
“It has largely been the failure of media publishers to effectively monetise their businesses and build robust business models.”
Frantzeskos called out media publishers for the negative response to Meta’s decision, slamming the companies that “run to Canberra for a solution rather than innovating themselves.”
“This idea that they would seek intervention over innovation is, I think, a real shame,” the digital expert said.
Constantine Frantzeskos
This outcome was predictable after Meta, then known as Facebook, reluctantly negotiated media deals three years ago in line with the News Media Bargaining Code. Sine then, however, media publishers have failed to monetise their content. Frantzeskos said the tech giant no longer sees the value in having to pay and subsidise the publishers for content on its platform.
“Meta and Google want all the content of the internet. They want everything there. They want to be on the front page of the internet. But they don’t create or produce that news and content. They simply act as a platform to facilitate and distribute content,” he said.
Frantzeskos noted that the news platforms and news publishers are relying on their channels, websites, apps, subscriptions, and advertising rather than seeing themselves as content creators and monetising that through their channels, third-party channels, or platforms such as YouTube and Instagram.
“I think that’s something that is really short-sighted on behalf of the news publishers.”
He noted that news publishers can innovate their models, in addition to subscriptions and advertising, through news wallets like Apple News, an Export Lens where an article is translated into another language and monetised in another country, content monetisation depending on the topic, content format monetisation.
“These monetisation frameworks are very common in other industries, and yet the news publishers seem to be not innovating at all in how they might make money.”
Frantzeskos said that while the government can force Meta to the table, it would not be the “sensible” thing to do.
“Meta is largely a source of readership. Meta has a wonderful interface, apps, and platforms and lots of people spend time on them.”
“The idea that they should somehow be forced to publish news is absurd. They can do what they like; people can share what they like. That’s the nature of those platforms.”
Frantzeskos noted that the irony is if a link is published on Facebook and someone clicks on it, the media publisher will benefit from it because that link will lead to the publisher and that story. He said not monetising that link “is the publisher’s problem, not Meta’s.”
Major news publishers across Australia, such as Nine, Seven and News Corp Australia, have touted their investment in their people, newsrooms, and systems.
While Frantzeskos noted that quality journalism is “essential for a healthy democracy and society”, a “robust business model to support quality journalism” is just as important.
“I’m not saying that they’re failures or that they’re bleeding money or anything else. But there is an inevitability about their approach, which is if they don’t build the monetisation framework, build a better business model, and find better ways to monetise, then it’s going be very hard to maintain and increase that investment in quality journalism,” he said.
Meta cancelled the Facebook News tab in the UK, France, Germany, and Canada earlier this year.
With the world watching Australia for the next moves, Frantzeskos said he couldn’t see Meta backing down from its stance but noted that he believes a resolution could be had.
“I believe there’ll be some sort of compromise. But I think the compromise will be that Meta says to the news publishers, we will keep sending news your way if you stop asking us for money to help your business, and I think it’s as simple as that,” Frantzeskos added.
“I believe there’ll be some sort of compromise. But I think the compromise will be that Meta says to the news publishers, we will keep sending news consumers your way if you stop asking us for money to help your business, and I think it’s as simple as that,” Frantzeskos added.
News Corp: “Australian media companies have kept their part of the bargain. Meta needs to keep theirs too.”
This comes after News Corp Australia’s executive chairman, Michael Miller, said the move by Meta shows “the company’s brazen indifference to regulations and the content creators that feed their platform.”
In an opinion piece published in the Australian Financial Review, Miller said the way the government responds to Meta refusing to sign future Media Code deals is becoming “a vital moment in the global battle to force this trillion-dollar company to play by the same rules of commerce and fair trading that other businesses live by.”
The federal government’s immediate response, branding Meta’s decision as “a dereliction of its commitment to the sustainability of Australian news media” is to be welcomed, he wrote.
Miller said Meta’s decision to not pay for news: “represents yet another demonstration of the imbalance of bargaining power which the code was designed to restore.
“Australian media companies have kept their part of the bargain. Meta needs to keep theirs too. Parliament built a cannon. The time has come to fire it,” he added.
Last week, the ACCC said they would be providing assistance to the government regarding its response to Meta’s decision to axe its news tab and not renegotiate payment deals with publishers.
The News Media Bargaining Code was legislated back in 2021 and under the code, the relevant minister was given the power to ‘designate’ a digital platform.
This means the platform is obliged to enter negotiations with news publishers over remuneration for news featured on the platform.
In a statement, a spokesperson said: “The ACCC remains of the view that access to public interest journalism is essential for Australians, and it is concerning this information will no longer be available on this service.
“The ACCC is providing assistance to the Assistant Treasurer and to Treasury.
“At the direction of Government, the ACCC has conducted a significant body of work on the consumer and competition harms associated with digital platforms, including through contributing to the development of the news media bargaining code in 2020 and 2021.
“The ACCC has proposed a series of further reforms to address competition harms. These proposed measures have been agreed to in principle by the Government.”
On Friday, Meta confirmed it will stop paying publishers for news content and not re-negotiate new Media Code deals once the current deals expire.
The digital giant’s decision follows months of speculation as Meta had expressed concerns with the deals and questioned the value to its business.
Meanwhile, tech rival Google maintains committed to working with Australian publishers and continuing its news content deals.
The tech giant recently confirmed its stance with recent comments from Lucinda Longcroft, the director of government affairs & public policy at Google Australia and New Zealand, highlighting the company’s attitude toward the Australian news industry.
See also: Government and ACCC “considering options” after Meta’s decision to ditch news media deals
See also: Meta pulls the pin on news media deals with publishers and axes news tab
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Top image: Constantine Frantzeskos