The regulator has suggested that designated digital platforms develop a code of conduct that govern the relationship between digital platforms and media businesses. This would see the digital platforms not impede news media businesses opportunities to monetise content appropriately and for them to negotiate fairly with us where they receive value from our content.
So why has it come to this? The core business models of Facebook and Google (particularly display advertising) are based on low-cost automated buying of commoditised advertising inventory, which fails to appropriately value high quality content, such as that produced by Nine.
However, if you are one of the lucky ones that manage to capture your cat doing something funny and it goes viral then you can make some nice additional money. But if you are in the business of making high quality Australian and journalistic content, then the revenue they share and the terms on which they place advertisements is not enough to sustain the cost of producing this content.
Nine wants to meaningfully engage with the digital platforms to find a model that shares the revenue fairly through placing advertisements in and around the content to pay for it. In the case of Facebook, if we were to submit to their “take-it or leave-it” terms we would be driving down the value of our content to unstainable levels. But because we have to be there to engage with our audiences we do it for free.
Furthermore Nine cannot turn on the ability to monetise our content for clips under three minutes on Facebook. This is a challenge when a typical Nine TV news story is anywhere from 60-90 seconds. Even if we were able to achieve the three-minute threshold, Facebook prohibits us from putting an advertising banner in our content or before our content in their news feed.
Advertisements before the news, during the news, and at the end of the news on TV are what pay for the production of it. It is their low advertising rates and rigid rules which are stopping us earning valuable revenue and getting premium news, drama, sport and entertainment to more Australians.
We are confident there is a sustainable business model that will produce benefits for both premium content providers and digital platforms. However, the digital platforms need to embrace this path forward as a priority over their current focus of unstainable grants programs and training initiatives which are trying to force Australian media businesses into their low-cost content business models.
The federal government has an opportunity to move decisively on the recommendations of the digital platforms inquiry. There is a burning platform for many of their recommendations to be implemented to ensure we retain the value of journalistic content and Australian programs for Australian society.
Clare Gill is group director regulatory affairs at Nine.