Future of Public Interest Journalism inquiry report released: Detailed analysis

The Senate inquiry into the Future of Public Interest Journalism has reported its finding this week.
The committee made seven recommendations about funding and supporting good journalism, but did not make any recommendations about internet giants Facebook and Google.
Since the inquiry began, the two most ‘entertaining’ committee members, Senators Dastyari and Xenophon have left federal parliament. See our previous coverage of the committee’s activities here
The report makes recommendations for better funding to Australia’s national broadcasters, more money for the community broadcasting sector, improved media literacy education, tax deductability for donations to non-profit news organizations, making subscriptions to news sites available to every Australian not just those claiming subscriptions for work purposes, and better legal protections for journalists and publishers. As well as the formal recommendations, the 150 page report provides a good summary of all the issues teased out during the inquiry.
Let’s look at the formal recommendations first:

Recommendation 1: that the ABC and SBS be funded adequately, so that they can deliver on their charter obligations, support rural and regional service
provision and have a strong fact checking capacity.
Recommendation 2: that the Commonwealth provide additional surety in future funding for the community broadcasting sector… for training and
education, and ensure that the sector is fully consulted in the national rollout of digital services. See our exclusive earlier coverage of the CBAA session at the Inquiry here.
Recommendation 3: that the Commonwealth work with the states and territories… to determine how areas of the Australian Curriculum may be improved regarding digital media awareness and media literacy.
Recommendation 4: that the Commonwealth develop and implement a framework for extending deductible gift recipient (DGR) status to not-for-profit news media organisations in Australia that adhere to appropriate standards of practice for public interest journalism.
Recommendation 5: that the Treasury undertake cost-benefit modelling on extending the tax deductible status of news media subscriptions to all Australians… [for publications that] practice public interest journalism.
Recommendation 6: that the Australian Law Reform Commission conduct an audit of current laws that impact on journalists reporting on matters that touch on or focus on national security and border protection, to identify and analyse unjustifiably harsh or draconian laws
Recommendation 7: that the Commonwealth work with state and territory jurisdictions to complete a review of Australian defamation laws…
Recommendation 8: that the Commonwealth look at ways to expand whistleblower and shield law protections, and to harmonise those laws between the Commonwealth and state and territory jurisdictions…

As well as the formal recommendations, the report summarized the 75 written submissions and the public hearings, touching on a range of subjects relevant to our changing media landscape. Here are key points from radioinfo’s viewpoint:
Chapter 2 of the report, titled Challenges for news media in the digital agecovered the historical decline of traditional news media, especially print, as a result of the internet. Some submitters were critical of Google and Facebook for taking revenue from traditional media, but others pointed out that the disruption of traditional media began before these companies started, telling the inquiry that audience fragmentation and lower costs of production and publication were also a factor to consider when assessing the challenges to journalism in the new media age.
Whatever the complex matrix of reasons for the decline of traditional media, the impact on revenues was clear, as outlined in this section submitted by Schwartz Media:

In Australia, newspaper advertising revenue has dropped 40 per cent in just five years, to $2.4 billion, according to PricewaterhouseCoopers. By contrast, the online advertising market is growing at 25 per cent a year and on various estimates will be worth $6 billion this year. According to Morgan Stanley, Google and Facebook generated the lion’s share of this, between $4 and $5 billion–around 40 per cent of our total advertising market and rising fast.
Globally, it’s widely accepted that these two tech companies are picking up 80–90 per cent of all new digital advertising. The leak of advertising to the tech giants seems inexorable. It’s not that readers are deserting the mastheads: the number of people who read them either in print or online has never been higher. It’s simply that ‘print dollars turned into digital cents’.

The MEAA reported roughly the same trends, also noting the huge growth of advertising revenues in the foreseeable future: In Australia, internet advertising revenues are scheduled to grow from $3.93 billion in 2013 to $7.25 billion in 2018, but that revenue is not going direct to news organisations that produce journalistic and other content. In increasing amounts, it is going to intermediaries.
The Fake News phenomenon was also discussed in this chapter.
‘Fake news’ is a phenomenon that has been increasingly debated in public policy over the last few years, especially since the Brexit campaign in the UK and the United States Presidential elections of 2016. These elections saw misleading news stories circulated about political issues and candidates with the aim of spreading misinformation and uncertainty, and to disrupt the political process more generally.
The US campaign, in particular, saw frequent accusations made by the then-candidate Mr Donald Trump that mainstream news organisations published ‘fake news’ about him, as they were ‘crooked’ or intentionally biased against him.
In his submission, UTS Professor Fray identified two kinds of ‘fake news’. One is misleading content resembling legitimate commentary, which is intentionally designed to spread misinformation for political capital or to drive users to sites to increase advertising revenues.
The other kind of fake news highlighted by Professor Fray was the use of the term as a pejorative to cast doubt on accurate reporting:

I think it is really important when we talk about fake news to think of the two things: one is, lies and propaganda dressed up as news by people who may or may not wish to change political discourse or make money from it—we saw that in the US election; and then the other is, in a sense, I think even more troubling and, that is, essentially, people using the term fake news to denigrate the role and the work of journalists.

The committee understands that Facebook now uses the term ‘false news’ to define misleading news online, and to distinguish this from the highly charged ‘fake news’ used to disparage mainstream news media.
Mr Paul Wallbank also added that some ‘fake news’ content was designed to reinforce people’s prejudices in online communities where their existing beliefs were not challenged, termed ‘filter bubbles’ or ‘echo chambers’:
The submission made by SBS highlighted the BBC’s definition of fake news, drawing the committee’s attention to its relationship with social media platforms, whether or not it is designed for profit or political gain:

The BBC defines Fake News as false information deliberately circulated by hoax news sites to misinform, usually for political or commercial purposes. Social media, and particularly Facebook, amplify these stories and can enable their authors to make large sums from online advertising. The role of social media in this phenomenon means that the audiences for Fake News tend to be younger than users of traditional news output.

Both Google and Facebook noted (in Chapter 4) the work they were undertaking to combat the availability and spread of ‘fake news’, or misleading content, on their platforms.  Facebook submitted to the committee that the bulk of ‘fake’–or ‘false’–news was financially motivated, and so reducing the profitability of generating fake news would stem its production. Facebook submitted:

In terms of disrupting the economic incentives, we believe one of the most effective approaches is removing the economic incentives for traffickers of misinformation. We have found that a lot of fake news is financially motivated. Spammers make money by masquerading as legitimate news publishers, and posting hoaxes that get people to visit to their sites, which are often mostly ads.

The positive benefits of new technology were also explored in Chapter 3 of the report, New opportunities, new audiences and innovative approaches.
Mrs Alice Almeida, an experienced digital advertising strategy professional, spoke extremely positively about the opportunities offered by aggregators to publishers and consumers:

I think that a lot of publishers wouldn’t be where they are without the support of the likes of Google. Just to highlight that: last year Google contributed 35.5 per cent of traffic to the news and media industry…This behaviour we are starting to see across all different Australians–from young to old. Publishers need Google to work with them for that reason.
The other thing is that a lot of the traffic is being driven from social, as we have touched on before. Facebook is not just a social network where you hear about what your family and friends are doing and all the thousands of baby pictures that seem to be coming in a newsfeed; it is now also becoming a news and content feed. A lot of publishers are now tapping into audiences by putting their news and articles within Facebook. I know that a lot of the time I visit certain websites that I wouldn’t have visited purely because I saw an article on Facebook or Google.

Professor Michael West, the Principal of Westpub, spoke of the power of social media to communicate with the audience he established during prior employment with a masthead publication, as well as to connect with a large and engaged new readership:

I already had a rusted-on audience at Fairfax and I had a redundancy cheque to put into this thing. I could not have done it without those two things and the public support of people on social media. That is an advantage, because social media is free and it is quite a good distribution model, provided you have enough Twitter and Facebook followers, and so on. There are a lot of variables. I think it would be very hard for other people to do it successfully.

Mr Crerar told the committee he considered aggregators to be distribution platforms that were particularly suited to offer innovative approaches to new organisations:

In some ways, we see Facebook and Google as newsagents. Newspaper businesses have always built their business on the distribution method. Our distribution method is social networks, search engines…But future opportunities for businesses like ours, which are unencumbered by the existing way of doing things, are gigantic. Yes, traditional businesses are going to shrink down the line. This is an epochal moment that will take a decade or two to pan out, but there are tremendous opportunities for us and businesses that are native to these platforms and are building their business on them.

The examples of other countries to new media business models and their effect on public interest journalism were detailed in Chapter 5 of the report. Experiences ranged from Spain, where the government forced Google to pay a levy for indexing articles from Spanish news media and so Google News pulled out of the country, to Europe, where legislation has been enacted to ensure that false information is removed quickly from search engines and social media.
While the report has recommended nothing unexpected, it does provide an excellent summary of the challenges facing news media in the disrupted digital age, and put on record the many viewpoints about the changes.
The full report can be downloaded here.

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