Multi Channel Network CEO Anthony Fitzgerald says the government needs to level the playing field between Facebook and Google, and the rest of the media to avoid Silicon Valley systemic destruction in a column for the Australian Financial Review.
Fitzgerald argues the digital duopoly should be treated the same as local media players but are in a “privileged position” of being untouched by regulation and local production costs while controlling the two largest online ecosystems for advertisers.
He wants regulation applied consistently to all media players, whether that involves deregulation for traditional media companies or applying media rules to tech platforms.
“If Australians and Australian policymakers are comfortable with the local creative and professional content economy being systematically destroyed by Silicon Valley, then let's be honest about the reality and regulate accordingly,” Fitzgerald wrote in the AFR.
“That is, apply the same regulation to all or have no regulation whatsoever, which at present is a privileged position occupied only by the duopoly and its tech-media peers.”
Publishers have little choice but to engage with Google as it controls search and sets the rules for page rankings while Facebook is increasingly used as an aggregator of news and information.
Fitzgerald says publishers using these platforms' “much acclaimed reach” to grow online audiences and ad impressions have failed to fund journalism. The risk of this approach is that readers become used to using newsfeeds rather than media sites to find and consume content.
The digital giants are also able to offer CPMs at a much lower price than premium newsbrands and TV networks due to the low cost of user-generated content.
This has helped Google and Facebook rapidly grow Australian ad sales to about $4 billion in their most recent fiscal year, according to industry estimates.
Without some form of market intervention, Fitzgerald believes the “content economics” will not be able to support journalism with “the same dark storm clouds” looming over TV and film.
“The clever trick the duopoly has played for years with local media companies and content originators is to poach that content for their platforms, pay nothing for it and charge advertising rates based on user-generated content costs, which for Google and Facebook is all but nothing.”
“It means local media companies investing in content and looking to sustainably reinvest back into local content are facing impossible economics.”
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