This week’s lesson for Google: Hire journalists
Call me a free marketeer, but the belly-aching from traditional media publishers about the loss of advertising dollars to Google and Facebook always struck me as a both self-serving and ironic.
Self-serving because private news publishers are competing, commercial entities whose lunch has been eaten by new technologies whose emergence has outstripped the capacity of existing domestic law and international regulation to deal with their sudden dominance.
In mopping up markets previously held by other players, they are doing nothing illegal, although they must surely be heading for global regulation to break their power in the same way as the United States government broke the power of the oil families – the so-called ‘‘robber barons’’ – a century ago.
And ironic because the revenue losses are self-inflicted. The owners of news businesses all around the world collectively made the huge strategic error of giving news content away for free early on in the life of the online explosion.
Those of us still in the news industry are struggling with the ‘‘creative destruction’’ created by that massive own-goal.
Back when that decision was being made, the presumption was that advertising revenue would follow traditional news publishers into the digital world.
Instead, once people no longer had to pay to read the news, they didn’t, while new digital platforms – search, social media and streaming television – began to monetise traditional audiences in new ways. The result has been the hollowing out of journalism over the past decade and the prospect of further major changes to the ownership and range of media titles in the year ahead.
However, there are signs emerging all around the world that the unbridled domination exerted by stateless digital giants like Google and Facebook will also face enormous challenges.
In France, the government has grown tired of waiting for the European Union to devise a digital tax aimed at these serial non-taxpayers and will impose a levy on transnational digital businesses from January.
In the United Kingdom, a select committee inquiry is getting to the bottom of the extent to which Facebook’s promises to protect data was subverted by internal actions that put a ‘‘for sale’’ sign on the babblings of cat-loving political argument-starters who revealed their shoe, car and holiday preferences in the process.
In the US, the role of digital firms in the subversion of the electoral system is becoming clearer. Trust in digital platforms is plummeting and the ‘‘fake news’’ phenomenon is helping restore some of the trust that has leached away from ‘‘experts’’ in recent years.
New Zealand has had a bit part this week in exposing the hubris of digital giants that have come to see themselves as above the laws of nation states.
Google’s response to breaching a name suppression order in New Zealand had to be the piss-take of the year. Essentially, it argued the courts needed to get their act together, otherwise how would Google know if it was breaking the law?
The answer to that is simple: Hire journalists and, like news organisations do, hire lawyers.
After all, one reason Google and Facebook are so profitable is that they pay nothing for the content they thrive on and which, if they couldn’t access, would kill them stone dead.
That, along with their cavalier attitude to privacy and paying tax, needs to change.
Whether they can be part of that process or will have it done to them will be an interesting exercise in whether the spawn of digital nimbleness have become, like many a multinational enterprise, too big to respond in their own long-term self-interest. –BusinessDesk