AUSTRALIA

Facebook ate and then ignored the news industry. It's hard, but we should leave it be

ABC Science /
By technology reporter James Purtill
Posted Thu 7 Mar 2024


Meta CEO Mark Zuckerberg turned Facebook from a "digital town square" to a "digital lounge" with less news.(Getty Images: Alex Wong)

Facebook owner Meta's decision to stop paying Australian publishers for news marks a bitter end to a long and often toxic relationship with digital news publishers.

It was a hot-and-cold affair that defined over a decade of online publishing and the work experience of a generation of reporters, and has ultimately left the industry a shadow of its former self.

Although it may be tempting for lots of reasons, the Australian government should avoid putting the boot into Meta by enforcing the News Media Bargaining Code as it's threatened to do.

Doing so will only make a bad situation worse and won't solve the underlying problem of who will pay for the news.

Meta isn't stealing news content. It's ignoring it

Last week, the US social media giant announced it would not renew the commercial deals it (reluctantly) signed with some Australian digital news publishers in 2021.

The response since has generally been one of outrage and anger, plus calls to force Meta back to the bargaining table.

The government said Meta was "appropriating" the work done by Australian companies. By this argument, the tech giant is effectively stealing the content of struggling Australian publishers.

But that doesn't properly describe the problem facing the news industry.

The reality of the situation is far worse.

Having spent years getting news outlets to publish their content on its platforms, and then years making this content less visible, Meta has gone one step further.

It says it shouldn't pay for news content because it doesn't actually want news on Facebook.

And the worst part? It's telling the truth.

Facebook's hot-and-cold relationship with news publishers

How times have changed.

Ten years ago, in 2014, the Facebook news feed was prime real estate for digital news publishing

Reporters were drilled to "post on social". Shared articles went "viral". Armies of moderators blocked trolls in the comments.

Facebook itself (the company changed its name to Meta in 2021) encouraged this by making news content more visible, and producing tools to make it easier for publishers to share their content with its users.

Digital-only media outfits such as BuzzFeed and Vice rode a wave of growth, generating huge numbers of clicks that translated into ad revenue.

In 2023, BuzzFeed folded.

Its founding editor, Ben Smith, described this as "the end of the marriage between social media and news".

In 2024, just last month, Vice laid off reporters and closed its flagship website.

A few years earlier, it had been valued at $US5.7 billion.

What went wrong?


It can be argued that, from the 2016 US election onwards, Facebook tired of the responsibilities that came with hosting news content and weeding out misinformation.

Readers also grew weary of what news had become in the 2010s era of social media. Endless hot-takes. Clickbait headlines. A fast-spin news cycle. Content designed to polarise and inflame.

Whatever the reason, Facebook tweaked its algorithm so readers saw less news.

By 2021, when the Australian Parliament passed the News Media Bargaining Code legislation to make Facebook pay for news, Facebook had been incrementally quitting news for years.

It said at the time news made up less than 4 per cent of people's feeds.

Meta now says that figure is down to 3 per cent.

"Facebook encouraged news providers onto the platform in the ways it promoted content," Dan Angus, a professor of digital communications at QUT, said.


"Now it has the eyes of the world and doesn't need news any more."

Axel Bruns, also a professor of digital communications at QUT, agreed that Facebook seems done with news content.

"They're saying, 'Why should we be the ones paying for it?'

"I hate to admit it, but there is a certain amount of logic to Facebook's argument."
Why the code doesn't solve the underlying problem facing news

And so we come to the News Media Bargaining Code, which is designed to address (to varying degrees) three related problems:1.Google and Facebook hold a monopoly over online advertising in Australia
2.Big tech in general pays very little tax in Australia, including tax on all the revenue generated by that ad spending
3.Australian news outlets don't make enough money to pay for quality journalism, partly as a result of a long-term loss of advertising revenue.

Instead of breaking up that monopoly, or closing tax loopholes, the Code effectively takes money from a profitable industry (big tech) and distributes it to an unprofitable one (news).

It's estimated the confidential two-to-three-year deals negotiated by Meta and Google with news media businesses in 2021 amounted to around $200 million.

That's great for the news outlets, but is it fair?

Arguably not.

First, why should a general purpose communications service like Facebook have to prop up the news industry?


"It's a bit like taking mining royalties to fund kindergartens," Professor Bruns said.

"There is a good argument for using one to fund the other, but it doesn't usually involve making BHP pay money directly to childcare companies."

Second, it's impossible to accurately calculate the advertising revenue Facebook and others generate from news content.

Without going into too much detail, what advertisers pay to appear beside the content is determined by an automated bidding war as a user scrolls their feed or visits a site.

This price is determined as much by the user's profile as the content itself.

Calculating advertising revenue is much more complicated than in the heyday of magazines.

But even if you could accurately calculate revenue, and even if you gave digital news publishers every cent, it still wouldn't solve the problem of how to pay for quality journalism.

The reason for this was news organisations were never in the news business, Amanda Lotz, a professor of media studies at QUT, said.

"They were in the attention-attraction business.

"In another era, if you were an advertiser, a newspaper was a great place to be.

"But now there are just much better places to be."
The business model that sustained news for over a century is dead

The moment news moved online, and was "unbundled" from classifieds, sports results, movie listings, weather reports, celebrity gossip, and all the other reasons people bought newspapers or watched evening TV bulletins, the news business model was dead.

News by itself was never profitable, Professor Bruns said.

"Then advertising moved somewhere else.

"This was always going to happen via Facebook or other platforms."

This technological change has been generally costly for news outlets and very profitable for Facebook, but that's not Facebook's problem.

The News Media Bargaining Code is trying to restore a model for financing journalism that has gone the way of the fax machine, the fountain pen, and the pocket address book.

The real question is how to pay for a public good that's no longer being adequately privately funded, Professor Angus said.

"How do we pay for this thing that we know is pretty important in a functioning democracy?

"The thing that's annoyed me through the News Media Bargaining Code discussion is that it fundamentally misrepresents that challenge.


"This is not the regulatory solution that many think it is."

One widely proposed solution was more public funding of quality journalism, Professor Lotz said.

"We need to look at journalism the way we look at streets and hospitals.

"It's a thing that's good for all of us to have."

The value of journalism shouldn't be solely defined by readership figures and advertising revenue, she said.

"The idea that you have entities keeping an eye on things, that you have governments that are aware that if they're not following the rules, there's somebody paying attention to them ... that's the thing we've been losing.

"And so there is enormous public value in simply having journalism doing its role, whether or not it's being consumed by hundreds of thousands of people every day."
What happens next probably won't be good

With Meta's announcement last week, Australia is heading towards another Facebook news ban similar to 2021. This will be bad for everyone.

Here's a likely scenario for what will happen next.

The government will designate Meta under the Code, which means it will force it to negotiate with media companies to pay for content.

Assistant treasurer Stephen Jones recently told reporters, "we'll be taking all of the actions that are available to us under the code".

Meta will then ban news on its platforms in Australia.

It did this in Canada in July last year, in response to similar government regulation. Canada's news ban is still going.

As a result of this ban in Australia, fewer Australians will read the news.

A third of Australians use Facebook for "finding, reading, watching, sharing or discussing news" — more than any other social media platform.

Much of this news consumption on Facebook was "incidental and unwilling", Professor Bruns said.

That is, Facebook users didn't seek out news, but it popped up in their feeds. That won't happen any more

.
Facebook is still the main way Australians get their news on social media.

Misinformation will flourish, as has happened in Canada.

Digital publishers will see even less ad revenue, due to Facebook referring fewer readers to their sites.

"If I'm going to take a punt, I think the government will designate Meta," Professor Angus said.

"They will want to be seen to be tough on platforms and Facebook."

In trying to force a platform that doesn't want news to pay for news content, Australia may end up doing itself more harm.