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Payday: How Australia tamed the Google gorilla

The code had always contemplated that the digital platforms and the individual media companies would attempt to nut out a revenue/payment/compensation solution without recourse to arbitration – which would operate as a resolution of last resort.

Given that over the past week Seven West Media has already inked a draft agreement, and Nine is reported to have done the same, the likelihood of the other major media groups following soon has increased.

Platforms like Google and Facebook broke the advertising model on which incumbent media companies had relied for their income. These deals provide for a modicum of payback.

Seven announced its agreement this week, but hasn’t yet publicly released the terms. It’s speculated to be worth north of $30 million per year – which appears like an amazing deal for a company with a strong presence in television, but whose print assets consist of The West Australian metropolitan newspaper and some regional titles.

Yet people familiar with that agreement firmly contend that this doesn’t mean Google is about to write a $30 million cheque. They say the deal is more nuanced and there is an expectation that conditions will be attached and that the deal will be grounded in agreements concerning the curation of content.

Regardless of whether it’s a cash or cash-equivalent deal for Seven, it’s a shot in the revenue and profit line that it wouldn’t otherwise have.

Given this amount of money would be material for Seven West, when the agreement is cemented in 30 days, it may need to notify the ASX.

Meanwhile its controlling shareholder, Kerry Stokes, is understandably delighted and duly lavish in his praise for Scott Morrison, Josh Frydenberg and Rod Sims.

Google has decided that if it manages to negotiate deals with individual media companies, it won’t get stung by arbitration.

Google has decided that if it manages to negotiate deals with individual media companies, it won’t get stung by arbitration.Credit:Alex Ellinghausen

We know even less about what Nine (the publisher of The Sydney Morning Herald and The Age) has negotiated with Google. There is a suggestion that Nine’s is a cleaner agreement and one that doesn’t include content carried on YouTube. It is also said to be worth more than $30 million a year.

Those familiar with both agreements warn against headline numerical comparisons, saying it’s apples and oranges.

Australian media organisations that are down in the weeds and busy talking up their comparative Google negotiating skills however are missing the point.

If the numbers being bandied about are even close, then thanks to Scott, Rod and Josh, media companies are set to receive at least some meaningful compensation for the costs of providing content that Google has so successfully monetised for itself over the past decade.

Platforms like Google and Facebook broke the advertising model on which incumbent media companies had relied for their income.

These deals provide for a modicum of payback.

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The reality is that Australian media has trounced media companies in other countries in terms of negotiating financial outcomes with Google.

By way of example, France’s major publisher Le Monde will receive €4 million ($6.2 million) a year from Google as part of a wider deal negotiated by 121 french news organisations. France negotiated a copyright-based agreement on the back of recently enacted European Union legislation seeking to ensure compensation by digital platforms’ use of publishing content.

Critics of the French deal say the formula struck to determine the payments was opaque – and the same could be said of the agreements now being nutted out by Australian broadcast and print media companies.

It’s ironic that deals being struck between digital platform giant Google and Australia’s major media companies designed to enhance information distribution are so shrouded in mystery and misinformation.

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