News Corp is the largest media company to sign agreement with Facebook following the passing into law a requirement for Facebook to pay content owners.
This is a three-year agreement between Facebook and News Corp to pay for the company’s Australian content. This is likely to transform the terms of trade for the field of journalism. Further, Facebook has also signed an agreement with Nine Entertainment, one of the largest locally owned media giant in Australia.
The Age and The Sydney Morning Herald and their Publisher, Nine, had also signed their intention to pay for content following weeks of serious negotiations. The company said that they will inform the public after an agreement is signed and the stock exchange is informed.
Robert Thomson, News Corp Chief executive, said that the deal would have a “material and meaningful impact” on its Australian business.
“Rupert and Lachlan Murdoch led a global debate while others in our industry were silent or supine as digital dysfunctionality threatened to turn journalism into a mendicant order,” Robert Thomson stated.
Last year, Google made $4.3 billion from advertising in Australia while Facebook made $700 million according to documentation filed at the Australian Securities and Investments Commission.
Under the new law Facebook and Google would be required to negotiate with media houses for payment.
This situation at some point made Facebook at the start to remove all Australian news from its platform for 8 days and this ended after high-level talks with the federal government.
For a fortnight all negotiations stalled after Facebook signed Private Media, Solstice Media, Schwartz and Seven West Media.
Mark Zuckerberg and his team have to be given credit for shaping the future of journalism.
Under the deal, Facebook will now display articles from Australian newspaper news.com.au, Daily Telegraph, Courier-Mail and Herald Sun among others under the Facebook news.
“We are grateful to the Australian prime minister Scott Morrison, treasurer Josh Frydenberg and the Australian Competition and Consumer Commission chair Rod Sims and his team for taking a principled stand for publishers, small and large, rural and urban, and for Australia,” Robert Thomson said.
The news media law has made it possible for media companies to avoid loss of advertising revenue to the social media platforms and search engines such as Google. This means that for every $100 spent on advertising, $53 goes to Google, $28 to Facebook and $19 to everyone else.
This additional revenue from Facebook and Google will make it possible for media houses to recruit more journalists to provide more content under the public interest stories in Australia.
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