Google Is Worth More In Australia Than Major News Outlets. Here's How It Could Better Fund Journalism

(MENAFN- The Conversation) The Global media Internet Concentration Project examines the concentration of the communications and media in countries around the world.

The latest data for Australia have recently been released, and they show just how big google is here.

Alphabet (Google's parent company) had 2022 revenue in Australia of A$7.9 billion.

That revenue is only exceeded by Telstra, and is bigger than Optus and NBN Co. It's also bigger than the revenues of News Corporation and Nine Entertainment combined.

The Network media Economy includes telecoms and internet infrastructure, digital and traditional publishing and internet-based companies. The 2022 revenue of this economy in Australia was $69 billion. The revenue of the top four telecommunications operators accounted for half of that.

The major internet advertising players were, unsurprisingly, Google and Meta. Together, they had revenue in excess of $10 billion.

While this sector is clearly a major part of the Australian economy, there are significant problems yet to be solved. Namely, how do we fund public-interest journalism in a sector that's concentrated to a few major players? The report has some insights to help guide the path forward.

Australia has traditionally had the most concentrated media sectors in the OECD. The report shows this hasn't changed.

News Corporation, the commercial television networks and Southern Cross Media are the major players across television, newspapers and radio. Concentration in commercial radio increased significantly over the 2019–22 period.

Australia's media concentration is among the highest in the Western world.

One new feature is the importance of classified advertising players in their own right.

For example, Seek and the Car Group are in the top 20 businesses by revenue. An examination of the News Corp revenue shows that REA (realestate), which is majority-owned by News Corp, provides about 25% of News Corp's total revenue. This figure is 70% of the company's newspaper revenue.

Nine Media owns 60% of Domain. While in 2023–24 Domain represents less than 10% of Nine's revenue, it is a more significant (about 25%) contributor to free cash flow.

One of the more interesting sectors is online video services. The availability of revenue information for this sector is patchy as many of its largest operators are either global media players (Netflix, Disney+) or part of complex digital businesses (Amazon Prime, Apple TV).

It's a sector where there is evidence of both disruption of traditional media oligopolies in broadcast TV and the entry of traditional media players into streaming. Nine Entertainment has Stan, News Corporation has Binge and Kayo, and Network 10 has Paramount+ in partnership with Paramount.

One challenge facing the federal government is whether online video services can be obligated to meet Australian content requirements, as commercial broadcasters currently are.

An issue that flows from this report is the prospect of an alternative to the News Media Bargaining Code .

Under the code, tech companies and news organisations could negotiate to pay for content and have it included on digital platforms. Until now, it hasn't been used by Meta because it had commercial arrangements directly with media companies, but those have since expired and won't be renewed .

Read more: Facebook won't keep paying Australian media outlets for their content. Are we about to get another news ban?

The government and media alike are still grappling with how to fund public interest journalism. There's also appetite to adequately regulate huge tech companies to better reflect their size in the Australian market.

One option is a digital services tax. However, this would be problematic in the context of Australia's obligations under the World Trade Organisation and the free trade agreement with the United States.

Digital services taxes have also formed part of OECD discussions on“Pillar 1” of a Global Tax Agreement . France and the United Kingdom have revised their positions on such taxes and have committed to withdraw them.

An alternative approach would be a public interest journalism levy in a similar form to the Telecommunications Infrastructure Levy .

Under the Telecommunications Act, service providers are either carriage service providers or content service providers. Both forms are class licensed.

Broadly, carriage service providers that operate specified infrastructure must hold a carrier licence. Holders of a carrier licence with revenue greater than $25 million per year must contribute to the levy.

A simple mechanism would be to introduce a new form of content licence. There would then be a requirement that content service providers which operate specified infrastructure must hold a content licence.

Holders of a content licence with revenue greater than $25 million per year would be required to contribute to the public interest journalism levy.

The contribution to the levy could be made proportionate to the returns received through digital advertising.

On current figures, Alphabet and Meta would contribute about 70% of the levy. Handily, the scheme would have the benefit of not requiring the federal government to designate particular companies (like it does under the bargaining code).

The levy also wouldn't be contingent on the value of news to the overall platform. If Meta decides they don't care for platforming news, for example, the levy wouldn't change.

The rate of the levy would depend on the level of funding required. However, using the revenues in the report, it would be lower than 2% of content service revenue. This would make for a funding pool about the same size as it currently available to news organisation under the bargaining code.

Read more: How well is the federal government regulating social media in Australia?

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