House of Lords wants UK to copy Aussie media code

The largely superfluous second house of UK Parliament reckons journalists need more help than ever and has some bright ideas on what to do about it.

The House of Lords quite rightly observes the massive decline in news media revenues since the internet became a thing. Most media are primarily funded by the advertiser model, in which third parties pay for access to an audience. By far the largest audiences on the internet are controlled by Google, Facebook and other content aggregators, so advertisers have moved from individual media to those companies.

There’s no question that this is a problem. Chasing raw traffic has led many media, most conspicuously in the US, to resort to ‘click bait’ journalism that deprioritises balance and accuracy in favour of crude appeals to emotion and partisan rabble rousing. Additionally the steep decline in revenues has meant there are fewer journalists employed to create ever more content. It’s inevitable that quality will suffer.

What to do about it is less straightforward. The Lords have decided the online ad market is dysfunctional – a subjective judgment, but nonetheless one they are treating as a call to action. The reason it’s dysfunctional is that too much of the cash is going to Google and Facebook, so it follows that the solution must be to redirect some of it to journalistic organizations.

“Journalism is important to a healthy democracy,” said Lord Gilbert of Panteg, Chair of the Communications and Digital Committee. “There’s an opportunity for the government and organisations to come together, step up and support journalism – now and in future.

“Online advertising is crucial to news publishers’ success, but there’s a fundamental imbalance of power between them and platforms such as Facebook and Google whose overwhelming market dominance means they dictate the terms on which they use publishers’ content, including whether and how much they pay for it.

“Publishers need platforms far more than the platforms need them and are disadvantaged by a dysfunctional online advertising market. It’s essential that the government acts swiftly to remedy this and sets up the Digital Markets Unit as a matter of urgency. The possibility that it could be delayed until 2022 or later is unacceptable – the news industry can’t afford to wait that long.”

Why do publishers need platforms far more than the platforms need them, Lord Gilbert? Is it to drive traffic to their content, which they then monetize? If so, then any state intervention which reduces the traffic they derive from internet platforms is bad, surely.

Nonetheless Lord Gilbert and his fellow digital economy experts reckon Australia is barking up the right tree with its plan to force platforms to pay publishers every time a piece of their content is shared by them. Whenever the state tries to intervene in markets, however, the law of unintended consequences gets involved.

First Google opined that this move could end up harming smaller media and independent producers. Then Facebook threatened to simply ban the sharing of news media on its platform if the government wants to play hard ball. What was that about publishers needing platforms far more than the platforms need them, my Lord?

The Digital Markets Unit is a broader initiative the UK government is also unveiling today that’s designed to keep an eye on the Silicon Valley giants that dominate the digital economy. It seems similar to a recent announcement from the European Union, that seeks to take on big tech by favouring European data somehow.

You can read the full report, complete with a long list of recommended tweaks, prods and nit-picks here. The House of Lords is right to say that journalism is in peril, but wrong to think that the answer lies in greater state intervention. Many media and individual journalists have simply switched to a subscription model that is no less reliant on internet platforms to ensure its success. As ever, before the state intervenes, it should ensure the cure isn’t worse than the disease.