Google, Australia hit deal; Facebook walks
CANBERRA, Australia — Google is striking deals in Australia to pay for journalism but Facebook is vowing to restrict news sharing as Australian lawmakers consider forcing digital giants into payment agreements.
Rupert Murdoch’s News Corp. announced a wideranging deal with Google Wednesday. Major Australian media organization Seven West Media reached a deal earlier, its rival Nine Entertainment is reportedly close to its own pact and Australian Broadcasting Corp. is in negotiations.
But Facebook said it “will restrict publishers and people in Australia from sharing or viewing Australian and international news content.”
The dominant social network blamed Australia’s proposed law for its decision, and said the law “fundamentally misunderstands the relationship between our platform and publishers who use it.”
Google is rushing to negotiate generous deals with big and small Australian media companies.
News Corp. said it would receive “significant payments” from Google in the three-year agreement, which includes heavyweight news organizations throughout the English-speaking world, such as The Wall Street Journal and New York Post in the U.S., the Times and the Sun in the United Kingdom, and the Australian and Sky News in Australia. The deal spans audio and video and News Corp. will also get an ad revenue share from Google.
News Corp. Chief Executive Officer Robert Thomson thanked Australian officials in a statement, saying they “have stood firm for their country and for journalism.”
Australia’s Treasurer Josh Frydenberg confirmed earlier Wednesday that stateowned Australian Broadcasting Corp. is also in negotiations and plans to spend any Google revenue on regional journalism.
“There are negotiations going on with all the major players and the minor players at the moment,” Frydenberg said. “This will help sustain public interest journalism in this country for years to come.”
Frydenberg said “none of these deals would be happening” if not for proposed legislation to create a socalled News Media Bargaining Code.
Lawmakers were debating amended legislation to create the code in the House of Representatives on Wednesday.
The code would create an arbitration panel to set a binding price for news in cases where Google and Facebook fail to reach deals with media companies whose original journalism they link to.
“Everything that I have heard from parties, both in the news media business and in terms of digital platforms, is that these are generous deals,” Frydenberg said.
“These are fair deals. These are good deals. These are good deals for the Australian media businesses,” he added.
Google and Facebook, which take a combined 81% of online advertising in Australia, have condemned the code as unworkable.
Frydenberg said after weekend talks with Facebook CEO Mark Zuckerberg and Sundar Pichai, chief executive of Alphabet Inc. and its subsidiary Google, that he was convinced the platforms “do want to enter into these commercial arrangements.”
Frydenberg denied he had given ground to Zuckerberg and Pichai by agreeing to amend the legislation.
“We have held the line and held it strongly,” Frydenberg said. “And the digital giants have been left in no doubt about the … government’s resolve.”
Google did not provide the terms of its News Corp. deal Wednesday.
The Australian deals with Google are being negotiated under Google’s own model, News Showcase. The company has reached pay deals with more than 450 publications globally since it launched News Showcase in October.
Investment bank JPMorgan estimated that Seven West Media could receive between $30.6 million and $53.6 million a year from its content deal with Google based on an analysis of similar deals in France.
Nine signed a letter of intent with Google for a deal worth more than $23 million a year for five years, The Sydney Morning Herald, which is owned by Nine, reported.
The newspaper cited anonymous industry sources familiar with the negotiations who could not speak publicly because of confidentiality agreements.