News Corp, Nine want at least 10% of Facebook and Google’s local ad revenue

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 15 May 2020

Australia’s biggest news publishers have asked for at least 10% of Google and Facebook’s advertising revenue in Australia. 

Earlier this week, Nine chairman Peter Costello told The Australian Financial Review, owned by Nine, that Google and Facebook should pay news media businesses $600 million, or 10% of the $6 billion they make a year in local advertising revenue.

The figure is based on his estimates of how much Google and Facebook benefit from news content and searches.

“We think that Google and Facebook are driving advertising revenue of about $6 billion in Australia, and roughly 10% of that is as a result of news content,” Costello told the AFR.

“So, if you apply those figures, Google and Facebook are taking about $600 million of advertising revenue out … which otherwise could have, or should have, been going to media.”

News Corp Australiasia executive chair Michael Miller says the figure could be as high as $1 billion.

“While Mr Costello estimates that the platforms should pay Australian media companies around $600m per annum there are different approaches to negotiating with them,” Miller told The Australian.

“Our modelling suggests the figure is much higher than $600m and former senator Nick Xenophon, whose advocacy sparked the ACCC inquiry into the platforms, has nominated $1bn.”

Miller added that the ACCC’s mandatory code of conduct should also cover data sharing and algorithms to address the platforms’ “monopolistic” behaviour. The watchdog was instructed to create a code of conduct after the government said no meaningful progress was being made between news media companies and the tech giants on a voluntary code.

The comments from Costello and Miller come after Google outlined why it doesn’t pay media companies for their news content in search results, saying news-related searches make up a “very small” proportion of all searches and very rarely return ads.

Google also argued that it acts as newspaper posters that draw in readers for publishers at a newsagent.

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