Australia’s biggest locally-owned media company, Nine Entertainment, has signed a deal with Google worth a reported $30m a year to feature its news in Google products, on the eve of the historic news media laws being debated in parliament.
The deal with the largest Australian media company so far comes as treasurer Josh Frydenberg said the government has “held the line and held it strongly” against the threats of Google and Facebook to pull their services from Australia if the news media bargaining code was implemented.
“The digital giants have been left in no doubt about the Morrison government’s resolve,” Frydenberg told journalists in Canberra.
“The first thing to say is none of these deals would be happening if we didn’t have the legislation before the parliament.”
Frydenberg said minor amendments to the code that would force Google and Facebook to negotiate fair payment for news outlets’ content, did not change key elements including that it would be mandatory and include a final-offer arbitration model.
“This code has succeeded where others have tried and failed,” he said.
Nine is believed to have signed a letter of understanding with Google, two days after Seven West Media became the first big media company to agree to terms with the search giant.
Another small media company, Junkee Media, has also signed a letter of intent to curate news content for Google’s News Showcase product.
Junkee Media CEO Neil Ackland said the revenue would be spent on public interest journalism for the youth news outlet.
“This is a significant investment that will allow us to set up a content infrastructure that will ensure Junkee’s sustainability well into the future,” Ackland said.
Although media executives are making deals outside the news media bargaining code they still want the laws passed to ensure Facebook and Google will be required to pay them for featuring news content in their products in the future.
The Greens have asked for an amendment to ensure the revenue from any deals will be used to fund original journalism.
Frydenberg said he will review the code in 12 months to see if parties were acting in good faith.
Nine, the publisher of the Sydney Morning Herald and the Age, has not publicly confirmed the Google deal but the news was reported by the SMH on Wednesday morning.
“We continue to have constructive discussions with the digital platforms and when we have anything to announce we will do so to the ASX, as is appropriate,” a spokesperson for Nine corporate affairs said.
News Corp is understood to be negotiating a global deal with the tech companies for its publications in Australia, the UK and the US.
It has not commented on the progress of those talks since its global chief executive, Robert Thomson, said in December he was working on global content licensing deals.
“It’s fair to say they’re at an advanced stage and it’s not in one particular country at the moment, these are global negotiations because we’re a global company,” Thomson said.
News Corp has numerous Australian publications, including the Australian, the Daily Telegraph, Courier Mail and Herald Sun, as well as the Times of London, the New York Post and the Wall Street Journal.
Nine has indicated it won’t confirm any deal with Google until a final commercial agreement is struck.
A fortnight ago Nine was dismissive about the Showcase product, insisting it would not negotiate with Google until the law was passed.
“This is what monopolies do, they put an offer, in the form of Google Showcase, but not offer to negotiate,” a Nine spokesperson said at the time.
“It has to be all on their terms and that is not an approach we will participate in. We support the legislation the government is proposing as the best way to secure a fair payment for our content.”
The managing director of Google Australia, Mel Silva, said the partnership with Junkee Media will build on those with Seven News, The Newcastle Herald, The Saturday Paper, Crikey and The New Daily.
“There are now almost 50 Australian media titles signed onto Showcase, with a total of 500 worldwide,” Silva said.
“We’re excited about the early performance of Showcase with Australian partners receiving a million views on their content in just over a week, and we look forward to building on that in the months ahead.”
Facebook has been approached for comment.
MEAA media federal president Marcus Strom said the laws were essential because smaller publishers and broadcasters did not have the same ability to negotiate outside the code like Nine and Seven.
“The deals which have been reported in the past 48 hours only came about because of the threat of arbitration under the proposed news bargaining code,” Strom said.
“Media companies have a moral obligation to demonstrate that the millions they will receive from Google will be spent on news gathering and not on share dividends.”