Tony:
Alright, take two since we didn’t push record the first time.
Tony:
Alright, so everyone on Linkedin, at barbeques, is reaching out to me and asking me about this whole - ‘What’s this Google stuff going on?’ and Facebook obviously, when we recorded the last session I think Facebook had just made their move.
Andrew:
Yeah I think it was, was it last Thursday or last Friday?
Tony:
Yeah.
Andrew:
Late last week.
Tony:
Late last week. So we’re going to record this again cause we didn’t do a good job the last time and we’re just gonna talk about this whole thing from our point of view and hopefully shed some light on things. Um, I guess like what is this whole purpose? Like, why has it been brought out do you think?
Andrew:
Well, yeah I mean it’s a, like it’s a very contentious topic.
Tony:
(laughs)
Andrew:
Like there’s a ton of different ways you can look at it, I think from our perspective, we’ve been in the industry for like collectively we have about twenty plus years of experience between all of us in search marketing and when you look at why this legislation has been brought out there’s probably three core things that would probably be good for it to achieve and it doesn’t achieve any of those.
Andrew:
So, and this was actually written in the Sydney Morning Herald which is FairFax, which is actually one of the companies that are benefiting from this and even they’re writing pieces about it scathing it.
Andrew:
But, this news media bargaining code doesn’t do anything for making big tech pay any more tax.
Tony:
Nah.
Andrew:
It’s not paying any more tax on the money they make here, it doesn’t help end users with their privacy, it doesn’t help disguise or mask your online activities from people that stand to make money from it. And it definitely doesn’t add to diversity of media in Australia and that’s probably the main point that the government keeps pushing on us is that, y’know - ‘We want journalists to be paid for the content that they’re creating.’
Andrew:
And I think this narrative that journalists need to be paid and the reason that journalists aren’t being paid is because big tech has come in and stolen all of the revenue that old media was generating up until the last decade or so where there’s been a massive decline. So, the narrative that we’re kind of being sold is that newspapers and journalists are making less money.
Tony:
Because of Google and Facebook.
Andrew:
Because of Google and Facebook.
Tony:
Yeah.
Andrew:
And I don’t think - I think fundamentally, that is incorrect. Obviously Google has one side of the story, Facebook has another side of the story, there’s multiple sides to the story but, what Google says in this case is actually that the decline in revenue through newspapers etc. is not really due to Google and Facebook, it’s due to the loss of y’know, online classifieds and that sort of thing. I’m not gonna say that it’s a hundred percent correct but it’s definitely, there’s definitely a large element of truth to that.
Tony:
Well what was the news - Okay, let’s go back. What was a newspaper full of? It had news, obviously, but how did they actually make money? So like, you’d pay y’know a couple bucks for a paper - or maybe that’s what it is now, maybe it used to be ten cents or, or a shilling or whatever if we go back far enough.
Tony:
But um, they made some money from the revenue of selling the newspaper.
Andrew:
Yep.
Tony:
But there’s lots of newspapers that actually you just stick ‘em in your mailbox even when you don’t want to. Like the local ones that I think are all gone now, but when they were around no one paid for them, so how did they make money? And this is how a lot of newspapers made money was the, y’know they had classifieds, they had real estate ads, they had car ads like for dealerships and then there’s general advertising in the paper as well.
Tony:
So, when everything went online - So it’s not necessarily Google and Facebook but everything is online in general. Like you’ve got classifieds online, okay, so you’ve got like eBay came out as well as Gumtree and all these other things that are relevant. You also have online advertising as well, so advertising also moved there which is why we don’t have Yellow Pages anymore. Y’know you don’t see Yellow Pages trying to sue Google.
Andrew:
Yep.
Tony:
To try and get their business back because they’ve been replaced. I guess the thing that I want to stress is that the one point that I agree with is that we do need news, news is important. But the problem is this plan doesn’t get them money in an actual fair way, it’s not - it doesn’t make any sense.
Tony:
My biggest issue is, y’know they’re making - in the Google side it’s paying for being what I’d be calling an impression, basically just for existing, okay. And I think Facebook is probably the same, I know a little bit less about that, but like this is why Facebook just took down their pages cause they’re saying, ‘We want to be paid for the page to exist.’
Tony:
And both those big tech giants stress a pretty important note which is, you’re not paying to be there, in fact, like, in Facebook’s case you’ve actually created that page and you actively post to it. So they’re both arguing that you get free advertising to your site, so this brings up the bigger case of how do journalists keep making money?
Andrew:
Mhm.
Tony:
Now the issue is, Fairfax, News Corp, I don’t know which ones. They owned Domain, which was property and news.com.au - Not news, realestate.com.au
Andrew:
Fairfax is Domain, realestate.com.au is News Corp.
Tony:
Thank you, my fact checker.
(laughter)
Tony:
And we have, we also have the other one, carsales.com.au - that was owned by one of them as well, and still is as far as I’m aware.
Andrew:
Yeah I think it may be.
Tony:
But, upper. So obviously the journalists don’t get any cut of like - the Sydney Morning Herald journalist doesn’t get any money that comes from that.
Andrew:
Yeah they’re all separate, they’re all, they’ve segmented all of their businesses.
Tony:
Yeah, they’ve all y’know done that. So, this is why the only money you can make from a newspaper is any idiot that still spends money for newspaper ads, okay, and the subscriptions.
Andrew:
Yeah.
Tony:
And, I think that’s the bigger issue that they have to figure out how to make people want to pay for it. Now, Google’s got this idea, which we’ll see how it works which is what they’re actually making progress, y’know, you can see how much grown up Google is versus Facebook with how they’ve handled it.
Andrew:
Google News Showcase is what they’ve come up with.
Tony:
Google News Showcase - which is not new, it wasn’t brought out because of all this drama. It’s been out - or in a plan for over a year or something like that.
Andrew:
It was expedited because of the drama, but it was planned anyway.
Tony:
Yep and that’s a way for journalists to get some money for Google to show news and etc. So it would be good for I guess Facebook to create something like that too, to I guess make it simpler for if you literally just want to go get news online from multiple sources - Which is what we want now, this is why digital is better. I don’t want to, like, we all know that media is very biased, right? But you can tune your opinion to the bias, so you can go well I wouldn’t mind reading this article here, because I know that they’re biased for it and these guys are biased against it, so I can sort of figure out this medium.
Andrew:
Yeah and I don’t think - Y’know realistically, a lot of people don’t understand that and think like that.
Tony:
Aw, maybe.
(laughter)
Andrew:
I think there’s a lot of - Y’know I think there’s two sort of opposing views and two opposing forces here.
Andrew:
The argument that the government is making News Corp and Fairfax and - On that side, on the government side, the argument they’re making is that Google and Facebook show news, or snippets of news, and they create a good experience for the user because they’re able to see and find news on their platform and therefore the user spends more time on their platform and then they use that information to serve ads to them based on their interests, based on what they’re currently reading about, what they’re currently looking for, they’ll serve different ads to them based on their online sort of persona.
Andrew:
Google and Facebook in this case like, mainly they’ll share the headline and a snippet, but they won’t share the full article. But, I guess the argument in this case is that because Google and Facebook have that news on their platform that they’re getting sort of user engagement to some extent and there might also be people that sort of skim read and don’t actually click through to that content, like that’s a possibility.
Andrew:
But, when you look at the argument of who needs who more and who adds value to who more, it’s undoubtedly true that Google and Facebook probably do get some extent, some extent of benefit from having news on their platform, you can’t deny that. But what you’d need to look at is, what is - who benefits who more and if you are driving, yknow, thousands of people a day to particular articles and there’s a paywall on that article and people are signing up to that paywall, you’ve got to think that the news corporations themselves are actually benefiting more from the traffic that they’re getting from Facebook and Google.
Andrew:
There’s some things that y’know Google does where it takes snippets of articles and sort of discourages people from clicking through to the actual content.
Tony:
Yeah.
Andrew:
That’s a bit of a different story.
Tony:
And that’s my argument like, just cause we work with Google, doesn’t mean we actually are fanboys and agree with everything they do. Like, structured snippets in the organic listings is something I have a love / hate relationship with, and we’ll talk about it more in another chat.
Tony:
But like, my perfect analogy is if you had a weather website that was full of ads you would have been making so much money from people searching Melbourne weather. If you were number one organically for Melbourne weather, you would be getting - especially in Melbourne cause it changes every ten seconds - so much traffic everyday. You would have been getting so much revenue from ads, and now they’ve got their structured snippets, which pulls that data and spits it out on there so you don’t even have to - unless you want to go and look at the full forecast - but even sometimes it’s got that. So that’s where I’m like, that’s Google actually crippling someone’s ad revenue.
Andrew:
Yeah.
Tony:
And that’s also some people are like, ‘Oh they’re doing this in Sweden’ or something like that, where the government brought in a law to make them pay for it, that was a structured snippet because that’s where you’re showing an article or at least a large chunk of it without that click to the website.
Andrew:
Yeah, and I think so - So obviously yeah there’s the view that the government has which is, y’know Facebook and Google are benefitting massively from this so they need to pay their share. There’s the view that I guess Google and Facebook have which is, y’know we’re actually benefiting you quite a lot, and then there’s other forces at play. Mainly being sort of the emergence of new media. Y’know things like Youtube channels, vloggers, that a lot of people are starting to turn to, to actually find current events and they’re starting, y’know they do deep dives on particular topics.
Andrew:
And so there’s new media versus old media. Old media undoubtedly, as you can tell because of the name, is in massive decline and the revenue that they’re, that they get is also in massive decline. And a lot of that is actually due to businesses that y’know Fairfax and News Corp have sold off and are still under the banner of Fairfax and News Corp.
Tony:
It’s also the diversification of where we get our news like you said, so I’m not gonna read an article about what the new iPhone is in The Herald Sun, cause it’s like y’know I can get a much more quality review of that, probably sooner, from media on Youtube. Someone that just does tech.
Andrew:
Yeah, and you’ve got y’know - I know myself personally, if I’m looking for an unbiased opinion on something I’ll take whatever search I’m making and add in y’know Whirlpool or Reddit after a search so I can go and look at forums that individuals themselves have written and individuals themselves now have a platform even though they’re not necessarily monetised and that's so different to fifteen or twenty years ago.
Andrew:
When, if something was published on the web fifteen or twenty years ago, it was normally because they had some sort of merit or they were some sort of journalist or they had some sort of money behind them because it wasn’t exactly all that cheap.
Tony:
What I don’t get is how are the journalists not making money? And I’d like to look into it more because like - You look at a Youtube reviewer, right, you’ve got one that just does Apple stuff, you’ve got one that just does I don’t know, drone stuff, and then you’ve got one that just does tech and blah blah blah, like there’s all these people that niche to one brand and like they’re making, y’know, they’ve got millions of subscribers.
Andrew:
Yeah, yeah.
Tony:
They get, like you look at the amount of views they’re getting and that sort of stuff so why - Is it just that we, is the whole model broken and does that need to be re-evaluated?
Andrew:
I think so. Like as you said, when you read the newspaper thirty years ago, you physically went and bought the newspaper. So, I mean I don’t know how much the average person would've spent on a newspaper but a lot of people would’ve had subscriptions and they would’ve come and thrown the paper on the lawn and that was just a recurring revenue model. But now we have access to so much more information at our fingertips.
Andrew:
You’ve got to look at as well the, I guess, the demographics of the readership of either Fairfax or News Corp. A lot of Gen X and Gen Y are not going to start taking up subscriptions for Fairfax and News Corp. A) There’s a lot of sort of negative bias towards those companies y’know in that sort of, those generations and B) Y’know they’ve just grown up watching Youtube and Facebook and consuming new media and so, it’s a demographic I think that is - Or it’s sort of a concept that’s just in decline.
Tony:
It’s a natural evolution and asking and getting - Like obviously news is on the decline with where they’re making money especially directly from, um, even with having sold off their other assets of digital forms. You can’t then just pull your buddy in the government to try and create a law to get you some money for doing nothing.
Andrew:
Well you shouldn’t be able to.
Tony:
(laughs)
Andrew:
But in this case, they have.
Tony:
But that’s at the end of the day, what they’re asking for isn’t actually beneficial. So, this is what I want. I want government to stop trying to help out his rich billionaire buddy who does newspapers that are not news anymore and maybe help us out by figuring out - Well, if Google is earning billions of dollars in Australia and only paying this much because the law allows them to, then fix it. The same way you guys brought out the law they had that any dollars *had to do GST. Well now, do more than GST. Do rev- y’know income and that would then do everyone.
Tony:
Every big tech company is doing it, let alone all the other ones that have other locations, like that helps them. It doesn’t help with the control they have - Or try and build something that can compete, y’know, it just seems like everything the government puts their hands on is worse than private enterprise.
Andrew:
Digitally, yeah.
Tony:
Well no everything! Like, our internet y’know, if it was all done by one private company it would’ve been done really well.
Andrew:
Yeah.
Tony:
But, then you’ve got a monopoly which you’re not allowed to have.
Andrew:
I think look, without getting too political, having sort of interests and sort of these networks which are just sort of implanted within the political structure of Australia are definitely part of what has caused this. But I agree, I mean one of the big things we should be doing is taxing large multinational tech corporations more.
Tony:
Just the same percent that we all get charged.
Andrew:
Yeah and they, look and technically-
Tony:
Cause they’re not evil for dodging it, I would if I could too.
Andrew:
Yeah I mean technically they do pay company tax rates on their profits, the problem is that they’ll send-
Tony:
Money wherever.
Andrew:
A billion dollars offshore, to Singapore or Ireland to pay down a loan or something there and there’s nothing to stop them sending money offshore to tax agents and that’s just the way it is. Um, and we also need to be fostering a more diverse media environment in this country and this law, most importantly, this is the thing that annoys me. This is the thing that annoys me most-
Tony:
Hold on hold on, that’s my alarm
(laughter)
Andrew:
Oh, this is the thing that annoys me most about this law is, this law-
Tony:
Helps no one.
Andrew:
Actually does the opposite when it comes to driving a diverse media landscape. There’s - Within the legislation or the proposed legislation, the news media bargaining code. A company has to be turning over more than 150k a year in order for it to be eligible to bargain with either Facebook or Google and get payments from them directly, so who do you think those people are? They’re small independent publishers that aren't going to be swayed by the interests that the people that are paying them would have, like Fairfax and News Corp who are biased towards promoting the interests of the people that own them.
Tony:
Yeah it gets all political then.
Andrew:
So, y’know you have to look at it and say well, what is this gonna do? Well, it’s going to instantly sort of pull the rug out from underneath the small independent publishers who are out there and it’s going to prop up the large monopoly media corporations which already dominate the landscape in Australia. So it’s going to actually squash media diversity much more than has ever happened in the last ten or twenty years. But they’ve disguised it under this neat little package of actually paying journalists what they’re worth and media is an important part of every function of democracy.
Tony:
Yeah, yeah.
Andrew:
Well, it is! But this law y’know whether it’s by design or whether it’s just incompetence I think does the complete opposite of fostering media diversity.
Tony:
It has to be incompetent because like, to pay for an impression is not, it’s not how Google works nd if you allow the media then anyone’s gonna jump on it, I should go, ‘Hey Google, you need to pay me cause you indexed my site.’ It’s funny because everyone out there is chasing their tail trying to figure out how to get their site indexed like Google.
Andrew:
Yeah.
Tony:
So, you can’t say, ‘Oh Google’s taking it.’ It’s like no, no, every media outlet is either paying someone or hiring someone, doing whatever they can to make sure they show up in Google as high as possible. So, everyone’s happy to play the game until they figured, oh maybe we can find a way to get money.
Andrew:
Yeah, maybe we can cheat.
Tony:
So, I guess at the end of the day it is broken. Looks like Google’s actually started negotiations with a lot of the media so that’s probably gonna fizzle out on their side.
Andrew:
Yeah.
Tony:
Facebook did what we wanted Google to do to be honest, everyone’s like, ‘Well why doesn’t Google just get rid of it’ and it’s like well that would be a PR disaster and we can see Facebook’s copping it with a lot of sob stories from people. The ironic thing is no one gets to see those sob stories cause no news is on Facebook, which is where everyone gets their news.
Andrew:
Yeah that’s right it’s now just comedian news channels on Facebook.
Tony:
But what’s good is I’ve still been seeing important things because I don’t follow news for important things. I follow, like if I want to know about y’know what’s going on with Coronavirus and all of that, follow the government. They’ve got like three or four different department things and I’m sure others are doing the same but like, y’know you don’t need to follow 7 News to know what’s going on, you can follow for certain things anyway.
Andrew:
Yeah.
Tony:
What needs to be sorted out is this whole thing, so that we don't lose kind of those y’know people that figure stuff out that wasn’t black and white. Like, news on like what’s going on with Coronavirus like you can’t not find that, the government can give that out. What we need is a bunch of people asking questions and investigating, not just recycling the same stuff we already know. So, hopefully Facebook figures something out cause what they’ve done isn’t a long term solution and it’s just not a good look.
Andrew:
Look yeah, it’s not a good look on Facebook as well. And I mean, you look at Facebook and Google and undoubtedly having a monopoly in any market is incredibly bad for that market. I think Facebook and Google, both of those companies have done incredibly evil things and both of them are massive, massive companies and whether they are systematically evil or not, they are just very, very, very big.
Tony:
They just got too big, where eventually you’re doing harm to some percent of the public.
Andrew:
And so, in this case I don’t think either side is necessarily inherently good and one side is inherently bad but, there needs to be more competition.
Tony:
I’m just stuck at this crossroads where I keep the analogy in my head that, I’m sure blacksmiths were all pissed off with Ford when cars became normal, right? So, like, but we still need new, so that’s what I’m saying like, there’s something that needs to be figured out and is it just that you can't have big ‘news’, will it just become that you’ve got a bunch of small ones.
Tony:
Like what’s happened with TV. I haven’t had an antenna on my TV for nearly a decade. Y’know?
Andrew:
Yeah, y’know you’re right it’s a disruption of an industry with a product offering that is better - Well not necessarily better, but a different product offering that’s coming in. I don’t think media in a traditional sense or Fairfax or News Corp newspapers need to die necessarily, they just need to adapt.
Tony:
Yeah, well we need news cause they do a lot of things that need to be done.
Andrew:
And in this case I’m not actually against Google or Facebook paying any money for having that content on their platform and I think Google News Showcase-
Tony:
Especially in that premium situation where you’re going there and you get to look at all of it in one spot, like it’s the Netflix of news.
Andrew:
Yeah, but I think the big issues with it is that, y’know, Facebook and Google - Google is now basically paying protection money to the Australian government because they basically want to prop up these old media organisations which typically write nice things about them, and in this case it just doesn’t do anything for actually creating a diverse media landscape.
Tony:
No.
Andrew:
You need to be able to fund and create new independent sources of media, and what - In a sense what the government has said is absolutely correct, but the meaning behind it and the way that they’ve done it isn’t. So, a diverse media landscape is incredibly important, but it’s also important to have a diverse competition landscape, y’know with Facebook and Google.
Andrew:
So, y’know typically I guess this side of the government is all about sort of free market, we’ll let the market decide, we’re not gonna sort of intervene and that sort of stuff,
Tony:
Until we decide we’re going to.
Andrew:
Until the market becomes too free and then they sort of intervene and y’know in this case, I wouldn’t be pissed off if it was actually supporting - I’m not against Facebook or Google paying money to news publishers, what I am against is Facebook and Google not paying money to small independent news publishers because that’s just incredibly biased. That’s what is incredibly annoying in this case.
Tony:
And I’m pretty sure this News Showcase, there’s no revenue limit on what they earn, it’s literally just reaching out to Google to get on that program and provide your news and then go to some sort of auction or whatever.
Andrew:
Yeah, well I mean as far as I know you can negotiate with Google regardless of how big your company is, there’s no limit.
Tony:
Yeah, you could be a small micro news group with like three journalists that decided to run their own thing.
Andrew:
And whether that is by design or not I don’t know.
Tony:
No.
Andrew:
But it needs to be - There’s nothing wrong with having I guess opinions on one side of the political spectrum, that’s fine that’s democracy. But, y’know preventing any - Or giving a major advantage to the big monopolistic existing players without allowing new players to come through, that’s a big flaw in my opinion.
Tony:
I guess we’re circling a bit.
(laughter)
Tony:
But yeah, to wrap up I guess the proposed law was not what it’s being said it is. It is way too biased to benefit a very small large media demographic and we don’t have to worry about Google leaving, they’re gonna negotiate their way out of this.
Andrew:
Mhm.
Tony:
Facebook just did what they’re gonna do, so Facebook won’t leave they’re just doing what y’know, they’re just like, ‘Well we’ll just remove it then.’ So we’ll figure out what happens there. But it is a very interesting thing and the one thing I like to highlight - Because if Google did have to leave, we said last time, it’d be devastating for small business. So this is something, it brings up the conversation that if you are a small business, or any size really, you need to diversify where your customers come from and unfortunately a lot of it is usually small *
Andrew:
Yeah.
Tony:
But it’s always been like that! Y’know before Google it was probably all from TV or radio but, it just reminds us that it’s going from one big beast to another and we have to make sure we’re always keeping on track of where we are relying on. Where all our eggs are in what basket.
Tony:
So, I don’t want to keep going cause I have no idea how long that’s gone for. But hopefully that helped, if you have any questions pop them in the comments below, we look forward to hearing what you guys have to say. Thank you!
Andrew:
Thanks guys!
