Google flexes muscle on local news

Google has warned it could stop promoting local news in searches and scrap its current deals with local media if the government goes ahead with legislation compelling it to pay for news. What could this mean for journalism here?

In its submission on the Fair Digital News Bargaining Bill, Google said it was "so unworkable ... we would have to reassess the manner in which (Google) operates in New Zealand".

Google does around $1 billion worth of business here and returns most of the revenue to the United States. It is unlikely that it would pull out of New Zealand altogether or scrap lucrative services.

But its objection to the Bill was plain.

Google said it wanted to discuss "better ways to support sustainable, quality public interest journalism" further with the government.

But last week, Google went very public with its opposition - and issued a more direct warning which sent shivers through the media.

"We'd be forced to stop linking to news content on Google Search, Google News, or Discover surfaces in New Zealand - and discontinue our current commercial agreements and ecosystem support with New Zealand news publishers," Google's New Zealand country director Caroline Rainsford said in a statement on Google's own site.

Google wouldn't be forced into this. It's a choice which would damage our news media and push our government into a corner.

In other countries where governments have used the law to compel Google and Facebook to pay for news - like Australia and Canada - the tech titans have also pushed back and followed through on threats to some extent.

Shutting the Showcase?

Google has done financial deals with 47 local news publishers, big and small, to use their news in its Showcase service in Google News.

"(It's) our commitment to continuing to play a part in what we see as a very important shared responsibility to ensure the long term sustainability of public interest journalism in New Zealand," Rainsford told RNZ when it launched in 2022.

The deals are confidential. In 2022 it wouldn't even give RNZ business editor Gyles Beckford a ballpark figure - just a global figure of US$1 billion over two years for news.

But if the Fair Digital News Bargaining Bill passes, Google would be meeting that "shared responsibility" by doing deals with New Zealand news publishers instead.

In 2022, news producers represented by the umbrella group the News Publishers Association secured Commerce Commission approval to bargain collectively with Google and Meta (the owner of Facebook).

"New Zealanders should be thankful that Google has finally shown its hand," NPA spokesperson Andrew Holden, a former editor of The Press and The Age in Melbourne, said in response to Google's warning last week.

"Its statement about the Fair Digital News Bargaining Bill deliberately misrepresents the legislation - and demonstrates the kind of pressure that it has been applying to the government and news media companies.

"The government of New Zealand should be able to make laws to strengthen democracy in this country without being subjected to this kind of corporate bullying."

Breaking the links

The part of Google's warning that caused most concern was the possibility of dropping links to local news content from Google searches and Google's own online news section.

"You're talking about the potential end-of-days of journalism in New Zealand ... if that was to become a reality," Glen Kyne, the former CEO of Warner Brothers Discovery NZ (owner of TV channel Three) said on The Spinoff's podcast The Fold.

Having recently presided over the death of Newshub on his watch, Kyne wouldn't say that lightly.

And it's not only commercial media companies that would be affected.

"Of the 12.7 million people that came to ABC News digital last month, 50 percent of that traffic came through both Facebook and Google. So there is a referral co-dependency in that space," the managing director of Australia's public broadcaster the ABC, David Anderson, told Mediawatch last month.

But why would Google's referrals coming to an end be catastrophic?

Anna Rawhiti-Connell has witnessed the rise of digital media first as a marketer, then a journalist at online start-up Newsroom.

Now she's a senior writer at The Spinoff, where she is also its head of audience - a role that in itself shows how important Google and other tech companies are to modern digital media.

"A very big shift occurred as soon as media started going online, where we went from having one product - like a newspaper - and the audience was the people that bought the newspaper," she told Mediawatch.

"The way in which we consume news and information and entertainment now is so fragmented because of the internet - and because of these platforms - that media companies need somebody whose job is to understand that complex landscape and people's preferences and behaviours.

"How we put things in front of people has really changed, and the onus is on us to understand what it is that audiences want from us and also increasingly, and how they would like that delivered."

Google's algorithm-powered products are very good at tracking that.

"It's often about revenue now as well. So we are managing subscriptions or membership programmes and donations."

If Google stopped linking to local news would that cause the 'end of days' of journalism here?

"(Kyne) is correctly referring to the volume of eyeballs that we derive through search. So the minute there's a drop-off on that, there's implications for the sizes of our audience - and then has an impact on the number of journalists that have jobs.

"On average, for example, Google Search accounts for about 25 percent of all of our referral traffic.

"Our combo of search and social media is about 37 to 40 percent on average. We are more of an online magazine. It would be larger for big news organisations, because they are publishing far more frequently.

"If you're a regular visitor to the Spinoff, you type 'Spinoff' into your browser bar, and it will probably take you straight to the homepage. For so many people, it's the front door to the internet - and entrenched in most people's understanding and experience of the internet."

The more traffic, the more revenue from advertising - usually.

But media often complain that Google and Facebook hoover up the vast bulk of the revenue from digital ads themselves. So does it make much difference if Google breaks the links to local news?

"There's an awful lot of money spent on advertising, so there's still advertising revenue to play for. Google have also invested in journalism in New Zealand and a lot of publishers have diversified ways of generating revenue - subscriptions, membership, donations or premium podcasts and that kind of stuff."

On a recent episode of The Fold asking What the hell happened to traffic?, The Spinoff's founder Duncan Greive and Rawhiti -Connell said traffic trends have been changing lately.

They said The Spinoff is now seeing more people visiting its homepage and roaming around and reading more stories.

Is that a throwback to the online times before the likes of Google and Facebook got so good at understanding our habits and directing us?

"There's a lot that is a bit 'back to the future' about how people are engaging with news and information these days. Direct visits are the largest source of traffic for us then the next biggest people coming to us to read one thing and then reading something else," Rawhiti-Connell told Mediawatch.

"I think part of it is a response to people feeling really overloaded and overwhelmed on social media platforms where there's a lot of misinformation and there's a lot of AI 'slop'."

So does that mean Google turning its back on news might not be as damaging as some reckon?

"Media all over New Zealand have to work really, really hard to get people to come and visit us directly. It's not just Google for search. For most people it's also their email platform and if you have an Android phone, it's your operating system.

"It's fairly ubiquitous and entrenched behavior that is so closely tied to people's experience of the internet that even if we didn't just talk about it in terms of search, it would be a very dramatic change and a loss."

Resisting the big beast

Google's control of search and online advertising tools has been challenged in court in the United States.

The NPA cited this in its statement hitting back at Google, and noted a recent court case prompted US Attorney General Merrick Garland to say: "No company - no matter how large or influential - is above the law."

In his weekly column The Knightly Views, a former editor of the New Zealand Herald, Gavin Ellis, urged national resistance here.

"Let's show our utter disdain for American corporate bullying by telling Google to sod off. New Zealanders should switch now to the likes of Yahoo! and Microsoft's Bing," he wrote

Microsoft is not exactly a cuddly corporate either. But could that work?

"Nobody says I'm going to 'Bing' something. And nobody says I'm going to 'Yahoo' something. I would love to think that New Zealand media had the power to say to audiences; 'Please use Bing or Yahoo. The answers are just as good,'" Rawhiti-Connell told Mediawatch.

"But when you think about the millions that get spent on getting people to even think about switching banks, or buying a different brand of butter, it would be no small feat to try and convince millions of people to use a different front door to the internet."