Hey Google! Show us the money

Comment from Peter Saxon. 

The way Google Australia CEO, Mel Silva tells it, Australian news media owes the global behemoth a great debt of gratitude for the way her company has added tremendous value to its meagre capabilities.

If that’s the case, why are news sources sacking more journalists than they’re hiring?

Please don’t misunderstand me, the Google search engine, and others like it, is a marvellous thing. Without it, the internet would be about as useful as a fax machine or teletext.

And I’m all for putting the consumer first. But as I commented earlier this year, services such as Menu Log and Uber Eats have brought many in the casual dining end of the restaurant business to their knees because, while taking up to a 40 percent cut from the menu price for delivery, the sector hasn’t experienced a similar level of market growth.

Admittedly, established food delivery services have been a great help during the pandemic. That aside, owners of my local food haunts in Surry Hills tell me that any increase in diner numbers has been negligible, at best. It’s just that, now, more of their existing customers have shifted to home delivery, rather than eat on the premises. And that change, driven by the delivery giants and helped by the pandemic, is costing the people who provide the actual product – the food – dearly. 

Some of these restaurants have long offered their own delivery by engaging a young local or two to do it. But because Uber Eats has enormous overheads to cover, including a large infrastructure along with sophisticated IT and national advertising, on top of paying the delivery person, the costs are way overblown for a service that was already there at a fraction of the cost.

In any case, ultimately, it’s the food, not the delivery that is the essential ingredient.

In news media, the essential ingredient is the news content itself. When people use a search engine they’re using it to find content. Without content there’d be no reason to search.

Radio is no stranger to this kind of dilemma. In 1970 radio was joined in pitch battle with the record (music) industry. Except the shoe was on the other foot. It was the record industry that owned the content and radio accused of using it without paying. They argued that without their product, there would be no music stations. And that argument hasn’t changed since the 1950’s. 

The difference between radio then and Google now was that radio could (and still can) demonstrate that airplay sold records. Between the ‘50s and ‘70s in the U.S. not only were record companies happy to allow radio free access to their music, they were known to pay bribes, called “payola,” to influential announcers to have their songs played on their shows.

Back in Australia, the row between the radio and record industries got so heated that in 1970 commercial radio refused to play Australian and British acts represented by the six major record companies of the time.

The music ban, which lasted six months, meant that the public had limited free access to British music by the likes of The Beatles, Stones, Tom Jones and The Who. But the worst of it was the devastation it caused major Australian artists including: Normie Rowe, Max Meritt, John Williamson, Liv Maessen, Russell Morris, Ronnie Burns, Masters Apprentices, Blackfeather  and John Farnham.

The dispute was settled through the Copyright Tribunal when both industries finally realised they were interdependent in the way that car makers are dependent on tyre manufacturers.

Since then a blue would erupt every now and again with records wanting more and radio willing to pay less but in 2020, the radio and music industries have never gotten on better.

In the present case of the Search and Social giants versus News media, Google believes that it has increased the consumption of Radio, Television and online News because it drives traffic to more outlets globally than ever before.

While it may seem that way, in reality it is more akin to how the food delivery giants have affected the restaurant industry than how radio has affected the music industry.

The fact is that search engines, like Google, and social media outlets, like Facebook, use news and opinion content created by others to draw traffic to themselves and sell that traffic to advertisers – which is not unlike radio’s use of records to attract listeners… except that we know that radio airplay actually promotes music and concert ticket sales. 

And, of course, radio has sat down with the music industry and gone through the Copyright Tribunal and pays a mutually agreed royalty for the music they play. 

It would save everyone a lot of time and legal fees if the search and social giants could do the same through the ACCC.

Peter Saxon


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