Don’t expect social media to save the news industry

WHEN Australia set up its arrangement in 2021 to have social media giant Meta pay for news content on its Facebook and Instagram platforms, it was seen as a lifeline for struggling local publishers. A “world first”, it was seen as a way to even out the power imbalance between modest-sized news businesses and the huge US-based social media giants that had sucked away advertising revenue from news outlets.

Canada followed suit with a similar deal. For a year, everything went according to plan. Meta duly entered into agreements with news publishers’ collectives and paid a fee for their content. But the period of relief for impoverished news organisations is coming to an end. The California-based tech giant has indicated that it is no longer interested in news of any kind and that it will end the payments.

Its decision came in the wake of Canadian legislation that would have forced IT companies to pay for hosting news content. Meta has now decided that news is not a significant factor in drawing users to its platform. So far, the evidence is that blocking news items from appearing on Meta platforms is not hurting its own bottom line; a news ban does not affect the time spent on Facebook or Instagram. The number of daily active users has remained stable.

Australia had a foretaste of Meta’s reach and power when in 2021 it suddenly turned off all local news media content from its platform during the height of the Covid-19 pandemic. Even links to hospitals, charities, emergency and other government services were not spared.

Although that ban was lifted a short while later, the social media giant is again indicating that it might do the same again. Australian news publishers are aghast. Some of the money that Meta paid was used to hire journalists after a long dry spell which saw huge retrenchments in the newspaper and TV industry and the closure of many outlets.

Australian media outlets argue that Facebook and Instagram would be in danger of becoming toxic with misinformation. There is talk of a new phenomenon called “information insecurity” – stories and claims that no one has bothered to fact-check. This is clearly a case of pleading in their own cause. Even if it is assumed that their forecasts turn out to be correct, that cannot hide the fact that neither news organisations nor any government can compel private social media firms to host unwanted content.

The reality today is that news organisations have become hugely dependent on social media to reach their audience; social media platforms do not need news links to get to their users. To think otherwise is to fundamentally invert the relationship between social media platforms and publishers who use them to offer their news.

A recent survey tried to quantify the potential financial impact on Australian news organisations if Meta’s news ban takes effect. It turns out that some publishers have built their businesses on Facebook and Instagram platforms and thus may lose up to 80 per cent of their revenue if they lose access. On the other hand, there are publishers who have refused to use any social media and are thus well insulated.

The hard lesson from this all is that news organisations should always stand on their own and not expect anyone else to help them reach readers and viewers.